UAE Ministry of Finance has issued guidelines clarifying tax residency for individuals residing in the nation. According to the guidelines, an individual’s presence in the UAE, even for parts of a day, will be counted in determining whether they meet the 183-day or 90-day thresholds for tax residency. Read on to know all the details:
What Are The New UAE Taxation Guidelines?
The UAE taxation guidelines state that an individual’s usual place of residence will be considered in the UAE if they normally or habitually reside there, and their ‘centre of financial and personal interests’ is in the UAE due to their work, personal, economic relationships, or other connections. It is not necessary for an individual to own their permanent place of residence, but such a place must be continuously available to them. This latest decision provides additional clarity to individuals regarding when they are considered tax residents under UAE taxation laws. As part of the new guidelines, those who are in the UAE for 183 days or more are tax residents.
Tax Residency Certificates
In addition, UAE residents can now obtain their Tax Residency Certificates (TRCs) via the Federal Tax Authority (FTA) website and benefit from Double Tax Avoidance Agreements (DTAA) signed by the UAE. The application process takes about 45 minutes, and the estimated time to complete an application by the FTA is 3 business days from the date the completed application was received. However, applicants must first register themselves on the TRC platform, and the required documents vary depending on three categories: natural person, legal person, or legal person of a government entity.
The cost for the TRC application varies based on the applicant’s status, with a fee of AED50 for submission, AED500 for all tax registrants, AED1,000 for non-tax registrant natural persons, and AED1,750 for non-tax registrant legal persons.
This new decision by the UAE Ministry of Finance is a significant move to provide additional clarity to individuals regarding when they are considered tax residents under UAE taxation laws.