Our parent company is based outside the UAE and we have a branch here — how does Corporate Tax treat that branch?

The first question to settle is whether the branch actually meets the "permanent establishment" test under Article 14 of the Corporate Tax Law. If you maintain a fixed place in the UAE — an office, a workshop, an ongoing construction site — through which the foreign company's business is genuinely carried on, rather than pure storage, display of goods, or purely preparatory activity, that's enough to establish a permanent establishment. The same result can arise even without any fixed place at all, if a person in the UAE habitually acts as a dependent agent, concluding or negotiating contracts on the parent's behalf.

Once a permanent establishment exists, the branch is assessed on the "separate enterprise" principle — treated as if it were an independent business dealing with its head office at arm's length, not simply an administrative extension. The 9% rate applies only to income actually attributable to the branch's UAE activity above the AED 375,000 threshold, with no bearing whatsoever on the parent's profits in its home country or anywhere else — the test is strictly the income sourced and generated inside the UAE.

In practice, the branch itself must register for Corporate Tax within its assigned deadline, keep clear records that separate its own income and expenses from anything belonging to the head office, and document dealings with the head office at arm's-length pricing, just as it would for any related-party transaction. RASEEKH works with foreign companies to define exactly what income falls within scope and to get the internal pricing with the head office right from day one, so the branch isn't caught in an avoidable dispute with the Authority later.