Application of corporate tax on the manufacturing companies in the UAE

Application of corporate tax on the manufacturing companies in the UAE

UAE - The corporate tax law (the law) in the UAE applies to the companies involved in the manufacturing, toll manufacturing, contract manufacturing and processing of goods and material (hereinafter referred as manufacturing and processing companies, or MnPC), unless they qualify for exemptions or operate as natural persons with an annual income of less than Dh1 million.

Contact manufacturing means outsourcing the full-fledged manufacturing including the sourcing of material while in the toll manufacturing, material and design are provided to the manufacturer and manufacturing is outsourced. Processing of goods and material means the preparation, treatment, transformation or conversion of goods and materials into another form of material for further commercial or industrial use or sale. If the goods and materials are not being processed for sale or further commercial/industrial use, it will not fall under the qualifying activities.

These manufacturing and processing companies can be categorised as either resident MnPC or nonresident MnPC. The resident juridical MnPC are established in the UAE or established out of the UAE but controlled and managed from UAE, are subject to CT on their worldwide taxable income, while a sole establishment, civil company or individual having a freelance manufacturing business in the UAE, is liable to