| NEW UAE TAX RESIDENCY CRITERIA A natural person is regarded as a UAE Tax Resident if they meet the following criteria: 1) resides in the UAE regularly or as their primary residence and where they have their primary financial and personal interests. 2) was physically present in the UAE for 183 days or more over the course of a single 12-month period: or 3) was physically present in the UAE for 90 days or more in a 12-month period that followed, and the person is a national of the UAE, has a valid residency permit in the UAE, or is a citizen of any GCC Member State. Where (i) he or she maintains a permanent address in the UAE; or (ii) he or she works or operates a business there. What does the new UAE Tax Resident definition mean for people? ➝ Individuals will not be subject to personal income tax in the UAE as a result of the new UAE tax residency criteria being implemented. ➝ The personal income of individuals, whether from employment or other sources, is not taxed in the UAE. As a result, if a person satisfies the requirements listed above to be classified as a UAE Tax Resident, they would ordinarily not be subject to taxation on their personal income in the UAE. ➝ According to bilateral tax agreements the UAE has signed with other territories, many of which refer to UAE domestic laws for determining whether a person is a resident of the UAE for purposes of the treaty, the new Tax Resident definition provides individuals with additional clarity regarding their UAE tax residency position. ➝ The Decision does not change the fact that, for purposes of determining whether a person’s business income is subject to UAE taxation, the UAE Corporate Tax Law will treat foreign natural persons conducting business in the UAE as “Resident Persons” (as defined in the Corporate Tax Law). Whether or not the natural person is regarded as a tax resident in the UAE for other tax purposes has no bearing on this corporate tax law concept. ➝ The new definition of a juridical person generally refers to an entity that was established or otherwise recognized in accordance with UAE law or the laws of another country and that has a separate legal personality from its creators, owners, and directors. Limited liability companies, foundations, public or private joint stock companies, and other entity types that have distinct legal personalities under the relevant UAE mainland legislation or the rules of a free zone are examples of UAE juridical persons. |
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UAE TAX RESIDENCY: New Update
