UAE Ministry issues guidelines on 'tax residency'

The UAE's Ministry of Finance (MoF) has issued guidelines clarifying the rules on determining tax residency.

The Ministerial decision states that an individual’s 'usual place of residence' will be in the UAE if this is where he/she normally or habitually resides.

An individual’s 'centre of financial and personal interests' will be in the UAE if this is where their work, personal, economic relationships or other connections are the strongest.

The Decision also specifies that all days or parts of a day in which an individual is physically present in the UAE will be counted in determining whether the 183-day or 90-day thresholds are met.

In addition, an individual does not need to own his/her 'permanent place of residence', but such place must be continuously available to them.

“The Ministerial Decision on implementing domestic tax residency rules is important as it gives additional clarity to individuals in respect of when they are considered as Tax Residents under UAE taxation laws," said Younis Haji Al Khouri, MoF Undersecretary.

The UAE Cabinet Decision No. 85 of 2022, which comes into force on March 1 2023, provides domestic definitions and rules for determining whether an individual or a legal entity may be considered a Tax Resident of the UAE.

The UAE Ministry of Finance issues Ministerial Decision No. 27 of 2023 on Implementation of Certain Provisions of Cabinet Decision No. 85 of 2022 on Determination of Tax Residency

Here are the key features of the decision.

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