Permanent Establishment (PE)

When a non-resident creates a taxable presence in the UAE.

Questions : How to determine the PE of a Entity ?

Conditions of PE:

1. Have Fixed and Permanent Place of Business.

2. Exercise an authority to conduct a Business.

3. Nexus in the state (UAE)

Examples of PE

• Place of management where management and commercial decision taken
• Branch
• Office
• Factory
• Workshop
• Land ,Building ,Other Real Estate Property
• Installation or Structure for the exploration of renewable and non –renewable Natural Resources
• Mine, Oil or Gas Well.
• Vessel and structure used for extraction of such resources
• Building sites, Construction Projects, Place of Assembly or Installation.

PE test for Non Resident Investment Manager (Exemption)

• Acting independently.
• Providing investment management or brokerage service
• Transactions are carried out in ordinary course of business
• Transaction are at ALP and received remuneration for service rendered
• Investment manager is not the Non Resident Person’s Representative in the state where such income is subject to Corporate Tax for the same period.

Exclusions:

• Storing, Displaying or delivering of goods or merchandise belonging to that person.
• Goods kept for the purpose of processing by another person
• Purchasing Good or Collecting data for a non-resident
• Conducting other activity of a preparatory or auxiliary nature for the Non-Resident Person.