Ministerial Decision No. 83 of 2023

Article 14, Clause 7 of the UAE Corporate Tax law talks about when a non-resident person’s temporary presence in the UAE won’t create a Permanent Establishment (PE). This means that they won’t be considered as having a fixed business presence here for tax purposes. A Cabinet decision provides more details on these conditions.

Article 2 – Conditions for Temporary and Exceptional Presence in the UAE

1. What Makes a Presence Temporary and Exceptional:

• When a natural person (an individual) is in the UAE temporarily due to special circumstances.
• To qualify, all these conditions must be met:

a) The person is here because of unusual public or private situations.

b) These situations couldn’t have been predicted.

c) The person didn’t plan to stay after these situations end.

d) The non-resident person didn’t have a Permanent Establishment here before these situations happened.

e) The non-resident person didn’t think that the person’s presence would lead to a Permanent Establishment or income in the UAE according to tax laws in other places.

Read about Determination of Non-Resident person Nexus in the State

2. What are Exceptional Circumstances:

• These are events beyond a person’s control while they’re in the UAE, and they prevent them from leaving as planned.
• These events include:

a) Public events like: – Public health rules set by UAE or other authorities. – Travel restrictions by UAE or other authorities. – Legal penalties stopping the person from leaving the UAE. – Acts of war or terrorist attacks. – Natural disasters or situations out of human control. – Other events stated by the Authority.

b) Private events like: – Sudden health problems for the person or their close relatives up to the fourth degree (even through adoption or guardianship). – Other events stated by the Authority.

The goal of these conditions is to make sure that when someone is in the UAE for a short time due to unusual situations, it doesn’t mean they’ve set up a permanent business presence here for tax purposes.