UAE Tax Residency

The United Arab Emirates does not tax any income of any kind.
By obtaining UAE Tax Residency, you will benefit from this advantage.

The UAE does not tax income of any kind and does not report UAE Tax Residents' bank accounts

UAE Tax Residency

Being a tax resident in a country with zero income tax and zero corporate tax is probably the dream of many. You may easily achieve this dream, as explained on these pages.

The United Arab Emirates does not tax any income of any kind. By obtaining UAE Tax Residency, you will benefit from this advantage.

The UAE does apply CRS (Common Reporting Standard) and (AEOI) Automated Exchange of Information, which means that passive income on bank accounts of non-tax residents are reported to the fiscal authorities of the country of tax residence of the non-tax resident bank account holder or of the non-tax resident beneficial owner in case where companies are bank account holders.

No CRS (AEOI) Reporting on behalf of UAE Tax Residents

However, as in all countries participating in CRS and AEOI, the above cross-border reporting applies only to bank accounts of non-tax residents and to bank accounts of companies with non-tax resident shareholders and beneficial owners.

Passive income on bank accounts of tax residents is not reported to any other country, as UAE Tax Residents, like in all countries, are tax subjects registered with the tax authorities of the country where they are tax resident, in this case the United Arab Emirates. However, the UAE does not raise any tax on any income at all.

Consequently, the banks in the United Arab Emirates do not report bank accounts of UAE Tax Residents to their own Ministry of Finance, which consequently does not exchange any data related to bank accounts of foreign UAE Tax Residents and their UAE companies to the home country of which a foreign UAE Tax Resident is a permanent resident.

The United Arab Emirates does not provide for a minimum stay per year in the country in order to maintain Tax Residency. Instead, it provides for not leaving the country for more than 180 days.

UAE Tax Residency – details to be considered:

  • The UAE does not require a foreign UAE Tax Resident to maintain owned or rented residential property for living in order to maintain Tax Residency. Instead, foreign UAE Tax Residents may stay in hotels; many hotels provide special rates and services for long-term guests.

    However, the tax authorities of the home country (country of permanent residence, if not UAE) of a foreign UAE Tax Resident may require the proof of owned or rented residential property. Maintaining a residential property in the UAE, either owned or rented, might therefore be highly recommended.

  • In case where a foreign UAE Tax Resident does not permanently (mainly) live in the UAE, it is important that the UAE Company maintains a proper permanent establishment (office) with resident director(s) and management.

    Otherwise, if the foreign UAE Tax Resident does mainly live in the country where s/he is a permanent resident of, the tax authorities may suspect the foreign UAE Tax Resident of managing the UAE Company’s business from that country (where he or she mainly lives). The majority of countries assumes the place of management as the place of taxation.

    Example: If you mainly live in the UK, are the shareholder of a UAE Company and are UAE Tax Resident but your UAE Company does not have substance (office and management appropriate for its scope of business) in the UAE, then the UK Inland Revenue (UK Tax Authorities) may judge that your UAE Company’s business is managed and carried out from the UK and thus its profit taxable in the UK.

Structured resiliently in the right way, UAE Tax Residency combined with a UAE Company can be the best solution globally, with peace of mind for long years to come.

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