How To Get Tax Residency in Dubai?
Table of Contents
Introduction
The United Arab Emirates (UAE) Ministry of Finance (MoF) recently issued Ministerial Decision No.27 of 2023 which provides additional clarifications regarding certain provisions of Cabinet Decision No. 85 of 2022 on determining tax residency.
Additional details have been introduced regarding the conditions needed for a natural person to qualify as a UAE tax resident. At Genzone, we understand the complexities of these changes and are here to guide individuals through the process of company setup, residency acquisition, and banking in Dubai.
Understanding the Essentials
The new guidelines, effective from March 1, 2023, define three situations in which a natural person can qualify as a tax resident in the UAE. Let’s break down these scenarios and explore the additional details provided by Ministerial Decision No. 27 of 2023.
Principal Place of Residence and Financial Interests:
- Requirements: The individual’s primary residence must be in the UAE, where they habitually or normally reside.
- Financial and Personal Interests: The UAE must be the state where personal and economic interests are of significant importance to the individual.
Physical Presence for 90 Days or More:
- Requirements: The individual must be physically present in the UAE for 90 days or more over a consecutive 12-month period.
- Supporting Documents: Entry and exit reports, proof of income, or evidence of business in the UAE.
Physical Presence for 183 Days or More:
- Requirements: The individual must be physically present in the UAE for 183 days or more in a consecutive 12-month period.
- Documentation: Entry and exit reports to be submitted.
Additional Clarifications
All days or parts of a day in which an individual is physically present in the UAE count as UAE days. Non-consecutive days are acceptable, and any day spent in the UAE due to exceptional circumstances may be disregarded.
Application Process for Tax Residency Certificates (TRC):
Individuals can apply for TRCs online through the Federal Tax Authority portal. The application fee is AED 50, with additional fees based on tax registration status.
Implications and Considerations:
Individuals and businesses must review the conditions to determine UAE tax residency. Attention should be given to the days of physical presence, and applicable individuals should ensure they meet the relevant requirements.
Tax Residency Certificates
Individuals can apply for a Tax Residency Certificate, an official document establishing their tax residency in the UAE. There are two types:
Domestic Tax Residency Certificate: This certificate aligns with local tax laws, primarily serving to comply with domestic tax obligations and regulatory requirements.
International Treaty Tax Residency Certificate: This certificate verifies residency for the purpose of claiming benefits under the double tax agreement (DTA). The DTA aims to prevent double taxation of income between the UAE and another country
Conclusion
Whether you are looking to establish a company, become a resident, or open personal and business bank accounts in the UAE, Genzone is ready to assist you. Book a call with us, and let’s navigate the evolving landscape of tax residency together.
