UAE Implements New Tax Residency Rules 2023
The Ministry of Finance made a decision yesterday that affects people living in the Emirates. Basically, if you live in the UAE for a long period of time, then your ‘usual place of residence’ will be considered here in UAE for tax purposes.
This decision is really important as it was included in ministerial decision no. 27 of 2023, which is all about implementing certain provisions of cabinet decision no. 85 of 2022 on determination of tax residency. Further, this new decision basically clarifies some of the rules that were set out in Cabinet Decision No. 85 which was made back in September 2022. For example, it says that if someone’s work, personal relationships, economic ties or other connections are strongest in the UAE, then that will be considered their ‘centre of financial and personal interests’ for tax purposes.
Tax Residency Threshold
It also specifies that any day someone spends physically present in the UAE will be counted towards the 183-day or 90-day thresholds for tax residency. And even if someone doesn’t own a permanent place of residence in the UAE, as long as they have one that is continuously available to them, it will be considered in determining their tax residency.
According to Younis Haji Al Khouri, the Undersecretary of the Ministry of Finance, this new decision is vital because it gives people more clarity about when they will be considered tax residents under UAE tax laws.
The UAE Cabinet Decision No. 85 of 2022 came into effect on March 1st, 2023 and it basically lays out some guidelines for determining if someone or a legal entity should be considered a tax resident of the UAE. These are all rules that will be applied within the UAE itself.
So, for investors planning to do Business Setup in UAE and want to permanently relocate in the country, feel free to reach out to us. We can help with not just business setup services in UAE, but on any tax related services as well. You may send us an email email@example.com or send us a message online for a live chat with one of our consultants. We will be happy to provide you with additional helpful information.