Corporate Tax · Foreign Branches
UAE Branch of a Foreign Company: Corporate Tax Registration and Filing
Last reviewed by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.
A branch is taxed as if it stood on its own
A foreign company that opens a UAE branch has not created a new company. For Corporate Tax, though, the branch is usually a permanent establishment, and its UAE profit is taxed here. The first deadline is registration, six months after the permanent establishment comes into existence. Corporate tax registration for branches is usually where most foreign parents need help first.
Foreign parents often assume their home-country accountants have this fully covered. They usually do not, because the UAE return is built on the branch's own figures and UAE rules. This guide covers the registration deadline, when a branch is a permanent establishment, profit attribution and head office charges. It also explains which reliefs and thresholds apply to a UAE branch.
When must a foreign company's UAE branch register for Corporate Tax?
Within six months of the date its permanent establishment exists, under FTA Decision No. 3 of 2024. That applies to non-resident juridical persons becoming taxable on or after 1 March 2024. A non-resident with only a nexus in the UAE registers within three months.
Late registration costs a fixed AED 10,000, however small the branch. The licence date is often the evidence of when the permanent establishment began. If staff were operating earlier, whether the branch was profitable or still making losses, that earlier date may start the six-month clock.
Quick Answer
A foreign company's UAE branch must register for Corporate Tax within six months of its permanent establishment existing. Late registration carries a fixed AED 10,000 administrative penalty from the FTA.
When is a UAE branch a permanent establishment?
Usually from the moment it operates, because a registered branch with an office, staff and a licence is a fixed place of business. That fixed place of business is the textbook example of a permanent establishment. The branch's UAE profit then falls within UAE Corporate Tax from that date.
A permanent establishment can also arise without any registered branch or local office. A dependent agent who habitually concludes contracts for the foreign company can create one. Our guide to permanent establishment and withholding tax explains the legal tests in detail.
Quick Answer
A UAE branch with an office, staff and licence is normally a permanent establishment of its foreign parent. Dependent agents concluding contracts can create one even without a registered branch.
How is a branch's taxable income worked out?
By attributing the profit it would earn as a separate, independent business. That depends on what the branch does, the assets it uses and the risks it carries. The UAE rate is 0% up to AED 375,000 and 9% above.
Take an illustrative Singapore company whose Dubai branch opens on 1 February 2026, so registration is due by 1 August 2026. The branch earns AED 1,100,000 before an arm's length AED 200,000 head office charge. Taxable income is AED 900,000, and tax is 9% of AED 525,000, or AED 47,250.
Quick Answer
A UAE branch is taxed on the profit it would earn as a separate, independent business. That profit is taxed at 0% up to AED 375,000 and 9% above that.
Can head office charges be deducted by a UAE branch?
Yes, where they meet the arm's length standard under the UAE Corporate Tax Law. The branch needs a written charging agreement and a documented allocation method. Charges above an arm's length level can be adjusted by the FTA.
In reverse, a branch doing regional sales or back-office work for head office should be paid for it. A branch booking only local costs while head office invoices every sale looks loss-making on paper. How much central overhead can fairly be charged is unsettled, so choose an allocation key reflecting real use.
Quick Answer
Head office charges to a UAE branch are deductible when they meet the arm's length standard. Keep a written charging agreement and documented allocation method, prepared before the financial year-end.
Can a UAE branch claim Small Business Relief?
No, Small Business Relief is not available, because it applies only to resident persons. Such a UAE branch is a non-resident with a permanent establishment, so it cannot elect the relief. The 0% band on the first AED 375,000 of taxable income still applies.
For the AED 50 million audit threshold in Ministerial Decision No. 84 of 2025, only revenue attributable to the UAE permanent establishment counts. The parent's worldwide turnover is ignored for that test. VAT is separate, and the branch tests its own UAE supplies against AED 375,000.
Quick Answer
UAE branches of foreign companies cannot claim Small Business Relief, but still keep the 0% tax band. Only its UAE revenue counts for the AED 50 million audit threshold test.
Register the Branch Before the Deadline
Exiloz confirms the registration deadline, registers the branch on EmaraTax and sets up the profit attribution the return relies on. Ask about corporate tax registration for branches.
Frequently Asked Questions
Is a UAE branch taxed on the foreign parent's worldwide profit?
No, only the profit attributable to the UAE permanent establishment is taxed in the UAE. The parent's other profits remain subject to its home country's rules and any applicable treaty.
When is the branch's Corporate Tax return due?
The return is due within nine months of the end of the branch's tax period, the same deadline as UAE companies. The parent then reports that profit at home separately.
Does a branch have its own legal personality?
No, a branch is licensed in the UAE but remains part of the foreign company. Contracts are signed by the parent, and the branch manager acts under power of attorney.
Can the parent get credit at home for UAE tax paid by the branch?
That depends on the home country's rules and any tax treaty with the UAE. Some countries give a credit for UAE tax paid, while others exempt foreign branch profits entirely.
What records should a UAE branch keep?
Separate branch accounts recording its own sales and costs, the head office charging agreement and the allocation method. Corporate Tax records must be kept for seven years after each period.
Is a nexus the same as a permanent establishment?
No, a nexus is a separate connection defined in the Corporate Tax rules, such as income from UAE real estate. A non-resident with only a nexus registers within three months.
Do dealings between the branch and head office carry VAT?
The branch and head office are one legal person, so their dealings are treated differently from third-party supplies. The VAT position depends on where each supply is made and received.
What if the branch operated before its licence was issued?
The permanent establishment may have started when staff began working, not when the licence arrived. That earlier date could start the six-month registration clock, so document the start date carefully.
Can a loss-making branch skip Corporate Tax registration?
No, profit is irrelevant to the registration duty. A loss-making branch with a UAE permanent establishment must still register within six months and file a return for each tax period.
Can Exiloz register a foreign company's UAE branch?
Yes, Exiloz registers branches for Corporate Tax, sets up separate branch accounts and documents head office charges. Exiloz also prepares the annual Corporate Tax return from the branch's own figures.
Main Takeaways
A foreign company's UAE branch must register for Corporate Tax within six months of its permanent establishment existing. Only profit attributable to the branch is taxed, at 0% up to AED 375,000 and 9% above. Head office charges must meet the arm's length standard and be documented in writing. The branch cannot claim Small Business Relief, however small its revenue.
Register the Branch Before Anything Else
A UAE branch is legally part of its foreign parent but taxed as a separate business here. Registration within six months comes first, and the start date may precede the licence. Profit attribution and arm's length head office charges then decide the tax bill. The absence of Small Business Relief means even very small branches file full Corporate Tax returns.
Fix the date the branch came into existence and count six months from it. Set up separate branch accounts that record its own sales, not only its local costs. Put a written head office charging agreement and method in place before the financial year-end. Exiloz can register the branch, set up its accounts and prepare its annual Corporate Tax return.
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