From the Inside Out.
"International tax is not just a large-company concern. Any UAE business that pays management fees to a foreign parent, borrows from an overseas shareholder, or sells services across borders has international tax exposure that needs to be managed."
— Finerio International Tax Practice
Doing Business Across Borders Has a Tax Dimension
Every time your business crosses an international border — selling to overseas customers, buying from foreign suppliers, paying a foreign parent company, lending money to a subsidiary abroad, or expanding into a new country — there are international tax consequences. Which country has the right to tax that income? What rate applies? Does a tax treaty reduce or eliminate withholding tax? Is your group structure creating an unintended tax liability in a jurisdiction you barely operate in?
International tax is the body of rules — domestic tax laws, bilateral tax treaties, and OECD guidelines — that determines how cross-border transactions are taxed. It is one of the most complex areas of tax practice, and one where the cost of getting it wrong is highest. Tax authorities around the world are sharing information, coordinating audits, and implementing the OECD's BEPS (Base Erosion and Profit Shifting) framework with increasing rigour.
The UAE is now part of this global framework — with Corporate Tax, Transfer Pricing rules, Country-by-Country Reporting, and the global minimum tax framework all bringing the UAE's tax regime into alignment with international standards. Finerio's International Tax practice helps UAE businesses navigate this landscape — structuring operations correctly, managing cross-border tax risk, and meeting the growing compliance obligations of operating internationally.
International tax — by the terms your advisors and regulators use
Cross-border tax advisory encompasses a wide range of disciplines — all relating to the tax consequences of international business activities and group structures.
Key Concepts Every UAE Business Must Understand
International tax has its own vocabulary. Here is a plain-language introduction to the concepts that matter most for UAE businesses operating globally.
1. Transfer Pricing
When two related companies (for example, a UAE subsidiary and its UK parent) transact with each other — charging management fees, interest, royalties, or buying/selling goods — those prices must reflect what unrelated parties would pay. This is the arm's length principle. Transfer pricing rules, now embedded in UAE CT law, ensure group companies cannot shift profits to low-tax jurisdictions by charging artificial prices.
2. Permanent Establishment
A "Permanent Establishment" (PE) is a taxable presence in a country other than where a company is incorporated. If your UAE business has a fixed place of business abroad — an office, a warehouse, a construction project — or has an agent signing contracts on your behalf in another country, you may have created a PE there and owe corporate tax in that jurisdiction, potentially without realising it.
3. Withholding Tax
Many countries impose a withholding tax on payments made to non-residents — deducting a percentage from dividends, interest, royalties, or service fees before the payment leaves the country. The UAE imposes a 0% withholding tax under its CT regime, but foreign countries may withhold tax on payments they make to your UAE business. Tax treaties can reduce or eliminate this withholding tax.
4. Double Tax Treaties
The UAE has signed tax treaties with over 90 countries — agreements that determine which country has taxing rights when a business or income straddles two jurisdictions, and that reduce or eliminate withholding taxes on cross-border payments. Accessing treaty benefits requires meeting specific conditions — including being a genuine UAE tax resident, not just incorporated here.
5. Country-by-Country Reporting
Multinational groups with annual consolidated revenues above AED 3.15 billion (approximately EUR 750 million) must file Country-by-Country Reports — disclosing revenue, profit, tax paid, employees, and assets in each country they operate. This data is shared between tax authorities worldwide and is used to identify groups whose profit allocation does not match their economic activity.
6. Pillar Two / Global Minimum Tax
The OECD's Pillar Two framework establishes a global minimum tax rate of 15% for large multinational groups (EUR 750 million+ revenue). The UAE has enacted a Domestic Minimum Top-up Tax (DMTT) at 15% for qualifying groups. UAE entities in scope may owe additional tax even on income that is otherwise exempt or zero-rated under the standard CT regime. This is the most significant new international tax development for large UAE-based multinationals.
What We Do For You
Comprehensive international tax advisory — covering transfer pricing, treaty planning, permanent establishment, cross-border structuring, and global compliance obligations for UAE businesses operating internationally.
International Tax Questions UAE Businesses Face
The most common cross-border tax situations our clients bring to us — and the advisory we provide.
Our UAE company pays management fees to our UK parent. Is there a UAE tax issue?
Under UAE CT, management fees paid to related parties must be at arm's length — reflecting the genuine value of services received. If fees are excessive, the FTA can disallow the excess as a deduction. Additionally, the recipient country may impose withholding tax on inbound service fees from the UAE — we assess both the deductibility and the withholding tax position.
We are expanding into Saudi Arabia. Do we need a separate entity or can we use our UAE company?
Operating in Saudi Arabia through your UAE company without a registered Saudi presence may create a Permanent Establishment in KSA — making your UAE company liable to Saudi Corporate Income Tax on profits attributable to that PE. We assess the nature of activities proposed in KSA, the PE risk, and advise on the optimal legal and tax structure for the expansion.
Our overseas subsidiary wants to pay a dividend to our UAE holding company. Is there tax?
Dividends received by a UAE company from a foreign subsidiary may be eligible for the Participation Exemption under UAE CT — exempt from UAE CT if the conditions are met. However, the source country may impose a dividend withholding tax before the funds reach the UAE. We analyse the applicable tax treaty and advise on the net after-tax cash repatriation.
We lend money between group companies. What are the transfer pricing rules?
Intercompany loans must carry an arm's length interest rate — the rate that would apply between unrelated lenders and borrowers with comparable credit characteristics. Both the interest rate and the loan terms (tenor, security, currency) must be benchmarked. We prepare TP documentation for intercompany financing and advise on structures that meet arm's length requirements while managing interest deductibility limitations.
A foreign company is performing services in the UAE. Do they owe UAE tax?
Foreign companies providing services in the UAE may create a UAE Domestic PE — becoming subject to UAE Corporate Tax on profits attributable to their UAE activities. We assess the nature and duration of the UAE activities, apply the applicable tax treaty (if any), and advise on the PE risk — including structural options to manage it.
Our group is considering a UAE holding company. What are the tax advantages?
The UAE offers several features that make it an attractive holding company jurisdiction — 0% withholding tax on outbound payments, an extensive treaty network, the Participation Exemption on qualifying dividends and capital gains, and a stable regulatory environment. We design and implement UAE holding company structures that are commercially genuine, meet economic substance requirements, and deliver the intended tax efficiency.
We receive royalties from overseas licensees. How are they taxed in the UAE?
Royalties received by a UAE company are subject to UAE CT as income. The withholding tax that the source country deducts before remitting the royalty can be credited against UAE CT — reducing or eliminating double taxation. We review the applicable tax treaty, optimise the royalty structure for UAE and source-country tax efficiency, and ensure TP documentation supports the royalty rate charged.
Does Pillar Two apply to our group?
Pillar Two applies to multinational groups with annual consolidated revenue of EUR 750 million or more. If your group meets this threshold, you must assess whether any UAE or foreign entities have an effective tax rate below 15% — and whether a Top-up Tax is owed. We conduct a Pillar Two impact assessment, identify entities at risk, and advise on the compliance steps required under the UAE DMTT regulations.
Questions we hear from clients every week.
Plain-language answers to the most common questions about international tax and cross-border advisory for UAE businesses.
BEPS stands for Base Erosion and Profit Shifting — the OECD's initiative to prevent multinational groups from using artificial structures to shift profits to low-tax jurisdictions and erode the tax base of countries where they genuinely operate. The OECD has developed 15 action points under the BEPS framework, covering transfer pricing, permanent establishment, hybrid mismatches, treaty abuse, and reporting transparency. The UAE has implemented several BEPS measures directly into its CT regime — including the arm's length principle for transfer pricing, transfer pricing documentation requirements, Country-by-Country Reporting, and the Domestic Minimum Top-up Tax under Pillar Two. UAE businesses that are part of international groups or have cross-border transactions need to understand how BEPS rules affect their structures.
A Tax Residency Certificate (TRC) is an official document issued by the UAE FTA confirming that a company or individual is a resident of the UAE for tax purposes. It is required to access the reduced withholding tax rates available under UAE double tax treaties — without a TRC, foreign tax authorities may not accept that your UAE company is entitled to treaty benefits. TRCs are also increasingly required by foreign banks, regulators, and counterparties as evidence of UAE tax residency. We manage the TRC application process — preparing the required documentation and liaising with the FTA throughout.
Yes — Transfer Pricing rules are embedded in the UAE Corporate Tax law (Federal Decree-Law No. 47 of 2022) and the accompanying TP Ministerial Decision. The arm's length principle applies to all UAE CT taxpayers that transact with related parties or connected persons — not just large multinationals. Documentation requirements apply to taxpayers whose transactions with related parties exceed specified thresholds. The FTA has the power to adjust transfer prices that do not reflect arm's length conditions — potentially increasing taxable income and imposing penalties. Any UAE business with intercompany transactions — management fees, intercompany loans, shared services, IP licensing — needs to consider its TP position.
A Permanent Establishment risk arises when a company's activities in a foreign country are significant enough for that country to claim taxing rights over the profits attributable to those activities. Common triggers include: having a fixed place of business in the foreign country (an office, a warehouse, a factory); having employees regularly working in that country; having a dependent agent who habitually exercises authority to conclude contracts on your behalf in that country; or carrying on a construction or installation project that exceeds a specified duration (typically 6 or 12 months under tax treaties). We conduct PE risk reviews for UAE companies with international operations — assessing fact patterns against applicable treaty and domestic law definitions.
The holding company jurisdiction determines: the tax treatment of dividends flowing up from subsidiaries; the withholding tax rates imposed by source countries on those dividends (influenced heavily by the available tax treaties); the treatment of capital gains on disposal of subsidiary shares; whether economic substance requirements apply; and the credibility of the structure from a BEPS and anti-avoidance perspective. A UAE holding company offers specific advantages — particularly the Participation Exemption for qualifying dividends and capital gains, 0% UAE withholding tax on outbound distributions, and access to the UAE's extensive treaty network. But the structure must have genuine commercial substance — a UAE holding company that exists purely on paper, with no real management or control exercised in the UAE, is unlikely to be respected by foreign tax authorities or to access treaty benefits.
Under UAE CT, TP documentation requirements are triggered based on the value of related party transactions in the tax period. A Disclosure Form (a summary of related party transactions) must be submitted with the CT return by all taxpayers who have related party transactions. A Local File (a detailed analysis of UAE-specific intercompany transactions) must be maintained if the total value of related party transactions in a tax period exceeds AED 40 million. A Master File (a group-level overview) must be maintained if the group's consolidated revenue exceeds AED 3.15 billion. We assess your documentation obligations and prepare the required documents to the standard expected by the FTA.
Navigating a cross-border tax question?
Whether you are structuring a new international investment, reviewing your transfer pricing, managing a PE risk, or preparing for CbCR obligations — our international tax team is ready to help.