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Tax Residency in the UAE

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The UAE government published Cabinet Resolution No. 85 of 2022 on September 2nd, 2022, which established tax residency in the nation. It establishes guidelines that specify when a person, natural or legal, may be regarded as a UAE tax resident. The regulations, which were created in accordance with criteria acknowledged globally, are scheduled to take effect on March 1, 2023.
In order to be designated a tax resident of the UAE for the purposes of any UAE tax law or Double Tax Treaty, an individual or a legal company must meet new domestic conditions set forth in Decision No. 85 of the UAE Cabinet of Ministers for 2022.

In the UAE, tax residency is determined by the Federal Tax Authority (FTA) based on the UAE's tax laws and regulations. According to the FTA, an individual is considered a tax resident in the UAE if they meet one or more of the following conditions:
  • They spend at least 183 days in the UAE in a calendar year.
  • They have a permanent home in the UAE.
  • They have an employment contract or own a business in the UAE.
If an individual meets any of these conditions, they are required to register for tax purposes with the FTA and file their tax returns accordingly.

Following Article 6 of the Cabinet Decision, the terms of a tax treaty that specifies the tax residency requirements for a tax resident in the UAE will continue to apply in special cases where such a treaty exists. The format and procedure for issuing residency certificates for such agreements will be decided by the Ministry of Finance.
If a person falls under one of the aforementioned definitions of tax residency, they must apply to the Federal Tax Authority (FTA) for a Tax Domicile Certificate (TDC) in accordance with Article 5 of the Decision No. 85, if they want to take advantage of the benefits and reliefs that come with it.
More explanations relating Cabinet Decision No. 85 of 2022 are to be provided by the FTA. Additionally, it will develop guidelines for gathering the pertinent data needed to apply the Decision's requirements.
This article's information is meant to serve as a general introduction to the topic. You should seek specialized guidance regarding your unique circumstances.

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