Galadari Alerts: The UAE Ministry of Finance Issues Guidelines for Tax Residency Determination in the Country

The UAE Ministry of Finance (MoF) have issued guidelines to determine an individual’s tax residency status. As of Wednesday, March 1, 2023, the regulations have been implemented with the aim of providing a clear definition to determine the tax residency status of individuals and legal entities.

The MoF announced that all days or partial days of physical presence in the country will be counted towards meeting the 183-day or 90-day thresholds. Owning a ‘permanent place of residence’ is not a requirement but must be continuously available to the individual. The decision by the MoF also indicates an individuals ‘usual place of residence’ will be considered in the UAE if it is where they normally or habitually reside. An individual’s ‘centre of financial and personal interests’ will also be in the UAE if their strongest work, personal, economic relationships, or other connections are within the country.

This Ministerial Decision provides clarification on specific regulations outlined in Cabinet Decision No.85 of 2022 on the Determination of Tax Residency for both individuals and companies issued in September 2022 which aims to bring the Emirates in line with other countries with similar legislation.

Galadari Advocates & Legal Consultants’ market-leading Banking and Finance team have lawyers dedicated to providing tailored and sensitive legal advice on tax matters in the UAE.  We will be happy to discuss any queries you may have.