A Guide to the New UAE Law for Determining Tax Residency

A Guide to the New UAE Law for Determining Tax Residency

The criteria for determining tax residency in the UAE is set to change with the issuance of the Cabinet Decision No. 85 of 2022. Even though issued on September 2nd 2022, the Decision will become effective from March 1st 2023. Tax consultants and or SPANCOM in Dubai advise you to understand each provision of the new law.
The new Decision effectively provides us with guidelines on determining the tax residency for both natural persons and legal persons. The Decision also outlines the requirements and conditions for identifying a Person as a Tax Resident in the UAE. Let’s have a look at the major provisions of the new law for determining tax residency in the UAE:
Article 3: Juridical Person
A juridical person will be treated as a tax resident in the UAE if the person meets either of the following conditions:
• The Person was incorporated, formed or recognised in accordance with the legislation in force in the UAE, and that does not include the branch that is registered by a foreign juridical person in the UAE.
• The Person is treated as a Tax Resident in accordance with the Tax Law in force in the UAE