Can a UAE company claim the benefits of the India–UAE tax treaty?

Only if it is resident under the treaty and passes the anti-abuse tests in the treaty and in each country's domestic law. Substance in the UAE, meaning people, premises and decisions, is what those tests examine.

Do both countries test the same intercompany transaction?

Yes. Each administration tests the price from its own side. Different conclusions lead to double taxation, which is why one consistent functional analysis matters.

Does the UAE minimum tax apply to an Indian-parented group?

It can. Under Article 1.1.1 of Cabinet Decision No. 142 of 2024 the test is the group's consolidated revenue, wherever the parent sits. Article 2.1 makes the UAE Constituent Entities liable.

01Taxation

One adviser for both ends of the corridor

Tax for groups that run between India and the UAE, with transfer pricing tested on both sides.

Written by Ajit Jain, founder of Averise. Last reviewed 13 November 2026.

Groups that operate between India and the UAE face two tax administrations testing the same transactions.

Averise works both ends. Ajit Jain is a Chartered Accountant of ICAI and ICAEW. The work covers transfer pricing on both sides, permanent establishment exposure, treaty access and the substance of UAE hubs.

At a glanceOne group, two tax systems

United Arab Emirates

Tax treaty
Residence
Permanent establishment
Withholding tax
Transfer pricing

India

Where corridor groups get exposed

Each of these is tested by one country against the position the group takes in the other.

Transfer pricing of services, royalties, financing and distribution between India and the UAE
Permanent establishment exposure when people from one country work for an entity in the other
Where a company is effectively managed, and so where it is resident
Treaty access for UAE entities, and the substance it requires
Withholding on cross-border payments and the credit for it

Consistency on both sides

The most expensive corridor outcome is inconsistency: one functional story in Mumbai and another in Dubai. We draft one set of facts and test it against both countries' rules before either file is filed.

Where both countries tax the same profit, we map the treaty route to relief and the evidence it needs.

Large groups and the UAE minimum tax

An Indian-parented group with UAE entities can be in scope of the UAE minimum tax. Article 1.1.1 of Cabinet Decision No. 142 of 2024 tests the whole group's consolidated revenue, and Article 2.1 places the liability on the Constituent Entities located in the UAE.

Questions clients ask

Can a UAE company claim the benefits of the India–UAE tax treaty?: Only if it is resident under the treaty and passes the anti-abuse tests in the treaty and in each country's domestic law. Substance in the UAE, meaning people, premises and decisions, is what those tests examine.
Do both countries test the same intercompany transaction?: Yes. Each administration tests the price from its own side. Different conclusions lead to double taxation, which is why one consistent functional analysis matters.
Does the UAE minimum tax apply to an Indian-parented group?: It can. Under Article 1.1.1 of Cabinet Decision No. 142 of 2024 the test is the group's consolidated revenue, wherever the parent sits. Article 2.1 makes the UAE Constituent Entities liable.

Sources

Cabinet Decision No. 142 of 2024 on the Imposition of Top-up Tax on Multinational Enterprises, Articles 1.1.1 and 2.1. Official Gazette text.

General information, not advice on your facts.

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