Accounting Income: The accounting net profit or loss for the relevant Tax Period as per the Financial Statements prepared in accordance with the provisions of Article 20 of the Corporate Tax Law.
Accounting Standards: The accounting standards specified in Ministerial Decision No. 114 of 2023.
Administrative Penalties: Amounts imposed and collected under the Corporate Tax Law or the Tax Procedures Law.
AED: The United Arab Emirates dirham.
Authority: Federal Tax Authority.
Business: Any activity conducted regularly, on an ongoing and independent basis by any Person and in any location, such as industrial, commercial, agricultural, vocational, professional, service or excavation activities or any other activity related to the use of tangible or intangible properties.
Business Activity: Any transaction or activity, or series of transactions or series of activities conducted by a Person in the course of its Business.
Cash Basis of Accounting: An accounting method under which the Taxable Person recognises income and expenditure when cash payments are received and paid.
Connected Person: Any Person affiliated with a Taxable Person as determined in Article 36(2) of the Corporate Tax Law.
Control: The direction and influence over one Person by another Person in accordance with the conditions of Article 35(2) of the Corporate Tax Law.
Corporate Tax: The tax imposed by the Corporate Tax Law on juridical persons and Business income.
Corporate Tax Law: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
Corporate Tax Payable: Corporate Tax that has or will become due for payment to the FTA in respect of one or more Tax Periods.
Dividend: Any payments or distributions that are declared or paid on or in respect of shares or other rights participating in the profits of the issuer of such shares or rights which do not constitute a return on capital or a return on debt claims, whether such payments or distributions are in cash, securities, or other properties, and whether payable out of profits or retained earnings or from any account or legal reserve or from capital reserve or revenue. This will include any payment or benefit which in substance or effect constitutes a distribution of profits made in connection with the acquisition or redemption or cancellation of shares or termination of other ownership interests or rights or any transaction or arrangement with a Related Party or Connected Person which does not comply with Article 34 of the Corporate Tax Law.
Double Taxation Agreement: An international agreement signed by two or more countries for the avoidance of double taxation and the prevention of fiscal evasion on income and capital.
Exempt Income: Any income exempt from Corporate Tax under the Corporate Tax Law.
Family Foundation: Any foundation, trust or similar entity that meets the conditions of Article 17 of the Corporate Tax Law.
Financial Statements: A complete set of statements as specified under the Accounting Standards applied by the Taxable Person, which includes, but is not limited to, statement of income, statement of other comprehensive income, balance sheet, statement of changes in equity and cash flow statement.
FTA: Federal Tax Authority, being the Authority in charge of administration, collection and enforcement of federal taxes in the UAE.
General Interest Deduction Limitation Rule: The limitation provided under Article 30 of the Corporate Tax Law.
Government Entity: The federal government, local governments, ministries, government departments, government agencies, authorities and public institutions of the Federal Government or Local Governments.
IFRS: International Financial Reporting Standards.
IFRS for SMEs: International Financial Reporting Standard for small and medium-sized entities.
Interest: Any amount accrued or paid for the use of money or credit, including discounts, premiums and profit paid in respect of an Islamic financial instrument and other payments economically equivalent to Interest, and any other amounts incurred in connection with the raising of finance, excluding payments of the principal amount.
Legal Representative: The guardian or custodian of an incapacitated person or minor, or the bankruptcy trustee appointed by the court for a company that is in bankruptcy, or any other Person legally appointed to represent another Person.
License: A document issued by a Licensing Authority under which a Business or Business Activity is conducted in the UAE.
Local Government: Any of the governments of the Member Emirates of the Federation.
Market Value: The price which could be agreed in an arm’s-length free market transaction between Persons who are not Related Parties or Connected Persons in similar circumstances.
Non-Resident Person: The Taxable Person specified in Article 11(4) of the Corporate Tax Law.
Permanent Establishment: A place of Business or other form of presence in the UAE of a Non-Resident Person in accordance with Article 14 of the Corporate Tax Law.
Person: Any natural person or juridical person.
Personal Investment: Investment activity that a natural person conducts for their personal account that is neither conducted through a Licence or requiring a Licence from a Licensing Authority in the UAE, nor considered as a commercial business in accordance with the Federal Decree-Law No. 50 of 2022 issuing the Commercial Transactions Law.
Preferred Shares: The category of capital stock or equity interest which gives its owner priority entitlement to profits and liquidation proceeds ahead of owners of Ordinary Shares.
Real Estate Investment: Any investment activity conducted by a natural person related to, directly or indirectly, the sale, leasing, sub-leasing, and renting of land or real estate property in the UAE that is not conducted, or does not require to be conducted through a Licence from a Licensing Authority.
Related Party: Any Person associated with a Taxable Person as determined in Article 35(1) of the Corporate Tax Law.