By promulgating Cabinet Decision No. 35 of 2025 on 27 March 2025, the UAE Cabinet has expressly delineated the circumstances under which a non‑resident juridical person may be regarded as possessing a taxable nexus within the United Arab Emirates, in accordance with Federal Decree‑Law No. 47 of 2022 on Corporate Taxation. Superseding Cabinet Decision No. 56 of 2023 for all tax periods commencing on or after 1 January 2025, the new Decision articulates following principal criteria for establishing such nexus.
Nexus in the State
Under paragraph (c) of Clause (4) of Article 11 of the Corporate Tax Law, a foreign juridical person will have a taxable nexus in the UAE in any of the following circumstances:
- Income from Immovable Property
Deriving income from Immovable Property in the State—through right in rem, sale, disposal, assignment, letting (including sub‑letting), or any other exploitation. - Income Adjustments under Decision 34 of 2025
When its income is adjusted pursuant to Clause (2) of Article 3 of Cabinet Decision No. 34 of 2025. - Investment Fund Distributions or Acquisitions
- If an investment fund distributes ≥ 80 percent of its Immovable Property income within nine months of its financial year end; or
- On acquiring an ownership interest in a fund that fails to distribute that threshold within the timeline.
Nexus arises on the distribution date or acquisition date, respectively.
By promulgating Cabinet Decision No. 35 of 2025 on 27 March 2025, the UAE Cabinet has expressly delineated the circumstances under which a non‑resident juridical person may be regarded as possessing a taxable nexus within the United Arab Emirates, in accordance with Federal Decree‑Law No. 47 of 2022 on Corporate Taxation. Superseding Cabinet Decision No. 56 of 2023 for all tax periods commencing on or after 1 January 2025, the new Decision articulates following principal criteria for establishing such nexus.
Artificial Transfers
Any artificial transfer or disposal of a right in rem over UAE Immovable Property—i.e., lacking valid commercial or non fiscal rationale and economic reality—will be treated as a corporate tax avoidance arrangement under Clause (1) of Article 50 of the Corporate Tax Law.
Registration Requirement
A Non Resident Person with a nexus as per Article 2 must register for Corporate Tax with the Federal Tax Authority in accordance with Article 51 of the Corporate Tax Law.
Repeals, Application, and Effective Date
Repeals
- Repeal of Decision No. 56 of 2023:
That Decision is repealed for tax periods commencing on or after 1 January 2025 but remains effective for earlier periods.
- Conflictual Provisions:
Any provisions conflicting with this Decision are repealed.
Application
- This Decision applies to all corporate tax periods beginning on or after 1 January 2025
Publication and Effective Date
- It shall be published in the Official Gazette and took effect upon issuance on 27 March
Partner with RVG
RVG Chartered Accountants offers comprehensive, end‑to‑end tax advisory and compliance solutions designed for the UAE’s dynamic regulatory environment. Our experts simplify intricate rules—such as Cabinet Decision No. 35 of 2025 on non‑resident nexus—into pragmatic, step‑by‑step plans, so your offshore property holdings and investment vehicles are fully compliant.
With RVG, you’ll avoid penalties, eliminate confusion, and focus on growth.
📞 Connect with RVG today. Your tax peace starts here.
