New Criteria for Tax Residency in the UAE from2023
In September 2022, the government of the United Arab Emirates (UAE) approved new conditions for tax residency, which will come into effect on March 1, 2023. In this article, we will examine the criteria for tax residency for both individuals and legal entities, as well as the process for obtaining a tax residency certificate.
1. "The Concept of Tax Residency"
A tax resident of a country is considered to be an individual or organization registered with the tax authority of that country and paying taxes in accordance with its legislation. If recognized as a tax resident of the UAE, that person's income is taxed in the UAE, regardless of its origin.
2. "Criteria for Tax Residency in the UAE for Individuals"
For individuals, tax residency in the UAE is established based on the following conditions:
- The primary residence and area of interest are in the UAE.
- Staying in the UAE for more than 183 days in the last 12 months.
- Staying in the UAE for more than 90 days in the last 12 months with UAE citizenship, a residence permit, or citizenship of another Gulf state, and having permanent housing or employment in the UAE.
3.
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A legal entity is considered a tax resident of the UAE if it:
- Created or registered in accordance with the laws of the UAE.
- Falls under the definition of a tax resident according to the tax legislation of another state.
4. "Tax Agreements between Russia and the UAE"
Russia and the UAE signed an agreement to avoid double taxation in 2011; however, it only came into effect in 2013 and has limited applicability. The benefits of this agreement apply only to the government of the UAE and its agencies, excluding private capital companies.
5. "The Process of Obtaining a Tax Resident Certificate in the UAE"
To obtain a tax residency certificate in the UAE, the following documents are required:
- For individuals: passport, residence permit, Emirates ID, copy of the housing rental agreement, income statement, bank account statement, entry and exit report.
- For legal entities: trade license, organization establishment agreement, financial statements, bank account statement, copy of the founding agreement.
The entire application process is conducted online through the tax service portal, and the administrative fee is 500 dirhams (approximately 137 US dollars). The certificate is valid for one financial year.
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