UAE Law and Practice Contributed by: Yann Mrazek, Kath Zagatti, Hermione Harrison and Keerthi Voodimudi, M/HQ Corporate Services Ltd
State-Level and Treaty Point UAE taxation is primarily federal, and there is no separate emirate/state-level estate tax regime. While the UAE does not tax succession transfers and its withholding tax is currently applied at 0%, double tax treaties remain relevant in cross-border succession structures mainly to manage foreign withholding tax on overseas investment and for residency/PE posi- tioning in cross-border structures.
CT where they conduct a business or business activity in the UAE and their total turnover from such activity exceeds AED1 million in a Gregorian calendar year (as explained above). Income from real estate in the UAE, personal investments and salaries/wages, is generally not regarded as business income. Juridical Person UAE tax considerations arise where family wealth is held through UAE entities (including free zone entities), so gains/income may be taxed at the entity level. For non-UAE entities, exposure may arise where there is a UAE permanent establishment, state-sourced income or UAE nexus. Where free zone structures are used, outcomes depend on whether the entity qualifies as a qualifying free zone person and satisfies the rele- vant free zone conditions (including substance, IFRS based audited financial statements, transfer pricing/ arm’s length compliance, qualifying income and the de minimis requirement).
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