The Dimensions of Economic Substance

The Oath
September 2026

Economic substance has various dimensions in the United Arab Emirates (“UAE”). At the domestic level, it manifests mainly under the Qualifying Free Zone Person (“QFZP”) concept, wherein businesses may claim a special 0 per cent Corporate Tax (“CT”) rate under certain conditions, rather than the standard 9 per cent. One of the conditions that QFZPs need to fulfil is to “maintain adequate substance”, failing which the benefit is lost for at least 5 years.

R&D Tax Incentives

The Oath
Juli 2026

The UAE has been making multiple updates to its legal framework relating to technological updates and technology-based governances. These include e-Invoicing, the Federal Virtual Assets Framework, the Personal Data Protection Law, etc. Following the same direction, the UAE recently introduced the so-called Research & Development Tax Credit regime (“R&D Tax Credit Regime”) under its Corporate Tax Law framework. This was meant to offer a higher credit rate for those taxpayers making substantial investment in R&D and hiring staff for this purpose.

Trapped by Tender

The Oath
Juni 2026

Principals in the medical equipment sector — manufacturers and exclusive suppliers whose Gulf distributors hold long-term government supply tenders at fixed prices — face acute margin pressure as Strait of Hormuz disruption and surging polymer and medical-grade raw material costs push freight up 25 to 40 per cent in a single quarter. This article assesses whether UAE contract law permits a principal to reprice or suspend supply, and maps the hardship (Article 224), force majeure (Article 236), and coordinated-variation remedies actually available under the new Civil Transactions Code (Federal Decree-Law No. 25 of 2025).

India’s PE Rules Shift

The Oath
April 2026

The Indian Supreme Court’s Hyatt ruling redraws the line between permissible strategic oversight and taxable operational control. For multinationals delivering cross-border services through related parties, the judgment demands urgent reconsideration of contract design, personnel deployment, and contemporaneous documentation.

MD Compensation Rules

The Oath
März 2026

The introduction of Corporate Income Tax (“CIT”) in the UAE in 2023 marked a fundamental shift in the country’s tax landscape. Unlike many jurisdictions, UAE CIT applies exclusively to business income, creating unique considerations for payments to “Connected Persons” – typically senior management and controlling shareholders. For managing directors who often wear multiple hats as both employees and owners, determining appropriate compensation levels has become a complex exercise in transfer pricing compliance. The stakes are significant. Excessive compensation risks deduction denial under the UAE CIT, Connected Persons and Transfer Pricing rules. Further, it may, depending on the shareholder position and applicable domestic tax law, be recharacterised as a constructive dividend, particularly relevant for expatriate managing directors operating UAE entities.tax planning.

Substance or bust?

The Oath
Februar 2026

Corporate structures designed to minimise tax exposure face unprecedented scrutiny in today’s global tax environment. The Indian Supreme Court’s recent Tiger Global judgment demonstrates how aggressively tax authorities will challenge arrangements perceived as lacking commercial substance, even when technical treaty requirements appear satisfied. This landmark ruling carries implications far beyond India’s borders, providing critical lessons for international tax planning.

Fly-In Fly-Out operations in KSA

The Oath
Januar 2026

The Kingdom of Saudi Arabia (“KSA”) has emerged as one of the most dynamic economies globally, driven by large-scale public and private initiatives under Vision 2030. As a result, international consulting and professional services firms increasingly support Saudi projects on a cross-border basis. While many services are delivered remotely, it is common for foreign consultants to travel to the Kingdom for short, task-specific visits. This operating pattern is commonly referred to as the Flyin-Fly-out (“FIFO”) model. Although commercially attractive, FIFO arrangements involve material legal and tax risks, most notably in relation to permanent establishment (“PE”) exposure, withholding taxes (“WHT”), licensing requirements, and immigration compliance. These risks apply regardless of the short duration of physical presence and require careful advance assessment.

Virtual Service PE impact in KSA

The Oath
November 2024

The Kingdom of Saudi Arabia's (KSA) hybrid taxation system combines Income Tax and Zakat, with its Income Tax regime governed by Royal Decree No. M1/1425 (Related to the Income Tax Law) and Cabinet Decision No. 278/1424 (On the Approval of the Income Tax Law). For capital companies incorporated in KSA, income tax applies exclusively to shares owned, directly or indirectly, by non-GCC nationals. This aligns with KSA's classical taxation framework, which imposes income tax on non-residents engaging in activities within the Kingdom through a Permanent Establishment (PE). Dr. Constantin Frank-Fahle and Marcel Trost, LL.M., LL.M. of emltc examine the Kingdom of Saudi Arabia's taxation system, focusing on the legal and tax implications of Virtual Service Permanent Establishments.

Fachbeiträge

Unsere Fachbeiträge sind überwiegend in deutscher Sprache vorhanden.