UAE New Tax Residency Rules:

 

 1. On September 2nd, 2022, the UAE government issued the Cabinet Decision No. 85 of 2022, determining tax residency in the country.

 2. Definition of a Juristic Person: A juristic person is a non-human legal entity which is capable of suing and being sued. Examples of juristic persons in the UAE include Limited Liability Companies, public joint stock companies, foundations etc.

 3. Clarification on personal and economic interests: UAE shall be the state where the personal and economic interests are the closest or of the greatest significance to the individual.

 4. As per Article 3 of the Cabinet Decision, a legal or juristic person is to be considered a tax resident if:
 • It is established, formed or recognized according to the legislation in force in the country (does not apply to a branch registered by a foreign juristic person), or
 • It is a tax resident as under the prevailing tax law in the country

 5. A natural person will be considered a tax resident under Article 4 if:
 • They have their usual or primary place of residence and the center of financial and personal interests in the UAE, or
 • They were physically present in the UAE for 183 days or more during a consecutive 12-month period, or
 • They were physically present in the UAE for 90 days or more during a consecutive 12-month period, and they are either a UAE national, or have a valid residence permit in the UAE, or are a GCC national, as well as
 • Having permanent residence in the country
 • Carrying out employment or business in the country

 6. The new Corporate Tax regime: Juristic persons falling under the ambit of UAE Tax Residency may be liable to the new Corporate Tax to be introduced from June 1, 2023 onwards, i.e., under Federal Decree Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

 7. International Agreements: Under a special case where an international agreement, i.e. a tax treaty determines tax residency conditions for a tax resident in the UAE, the provisions of such treaty will continue to apply, following Article 6 of the Cabinet Decision. Thus for example, where Article 4 of the India- UAE Double Taxation Avoidance Agreement provides that an individual shall be regarded as a resident of UAE, if he is present in UAE for atleast 183 days in a calendar year, such a condition, shall take overrule the cabinet decision mentioned above.