UAE Withholding Tax: 0% Rate on State-Sourced Income

The Corporate Tax Law also recognizes State-Sourced Income, but merely earning UAE-sourced income does not by itself necessarily require a foreign entity to register and file a normal UAE Corporate Tax Return.

For example, foreign banks would be subject to CT if they follow the conditions.

Separately, the law provides for withholding tax at a 0% rate on relevant State-Sourced Income categories unless a different rate is specified.

Because the filing and registration analysis for non-residents depends heavily on the precise fact pattern, businesses should avoid treating “UAE-sourced income” as an automatic filing trigger.