CD 85/2022 — Who is a UAE tax resident

Factual summary

Sets when a person is a UAE Tax Resident for federal taxes. A juridical person is resident if it was incorporated, formed or recognised in the UAE (not a branch of a foreign company) or is resident under a tax law; a natural person is resident on the basis of his usual place of residence and centre of interests, 183 days' presence in 12 consecutive months, or 90 days' presence combined with nationality or residence and a permanent home or work in the UAE. Tax Residents may apply to the FTA for a Tax Residency Certificate, and International Agreements keep their own residency tests.

What it means in practice Professional insight

Who: individuals and companies that need to prove UAE residency, including under a tax treaty. What to check: days of physical presence in the relevant 12 months, the permanent home or work link for the 90-day test, and the certificate application to the FTA.

Key provisions

• Art. 3 A juridical person is a Tax Resident in the State if it was incorporated, formed or recognised under the legislation in force in the State (not including a branch registered in the State by a foreign juridical person), or if it is a Tax Resident under the Tax Law in force in the State.
• Art. 4(1) A natural person is a Tax Resident if his usual or primary place of residence and the centre of his financial and personal interests are in the State, or if he meets the conditions and criteria set by a decision of the Minister.
• Art. 4(2) A natural person is also a Tax Resident if he has been physically present in the State for 183 days or more within the relevant 12 consecutive months.
• Art. 4(3) A natural person present in the State for 90 days or more within the relevant 12 consecutive months is a Tax Resident if he is a UAE national, holds a valid Residence Permit or holds the nationality of a Gulf Cooperation Council member state, and either has a Permanent Place of Residence in the State or carries on an employment or Business in the State.
• Art. 5 A Tax Resident under Art. 3 or Art. 4 may apply to the Federal Tax Authority, in the form and manner it specifies, for a Tax Residency Certificate; the Authority may approve the application and issue the certificate.
• Art. 6 Where an International Agreement sets conditions for determining tax residency, those conditions apply for the purposes of that agreement; the Minister issues a decision on the form and manner of the certificates for the purposes of the International Agreement.
• Arts. 7–9 The Authority may request information, data and documents on any Person from all government entities, which must cooperate fully; the Minister issues the implementing decisions and the Authority issues clarifications and directives; effective from 01 March 2023.