ITC Accounting and Tax Consultancy

UAE issues resolution on Tax Residency

The UAE government has approved Cabinet Resolution No. 85 of 2022 providing guidelines to determine the tax residency for “natural and legal” persons and shall be effective from 01 March 2023.

Prior to such Cabinet Decision, no statutory definition was available on the procedure for applying for a Tax Residency Certificate (“TRC”) – except for the user guidelines provided by the UAE Federal Tax Authority (“FTA”).

Tax residence of persons

Corporate entities (legal persons)

Under the Resolution, a corporate entity (i.e., legal person) should be considered as a UAE tax resident where one of the following conditions is met:

  • The entity is established, formed or recognized in the UAE, excluding a UAE branch registered by a foreign entity.
  • The entity is considered a tax resident under the (applicable) tax law of the UAE.

The UAE corporate tax (CT) legislation has not yet been enacted to determine the requirements under the second point above. However, based on the public consultation document released by the Ministry of Finance (MoF) on 28 April 2022, a company established outside the UAE may still be treated as a UAE tax resident if it is effectively managed and controlled in the UAE.

Individuals (natural persons)

Article 4 of the Resolution defines natural persons as tax residents in the UAE if one of the following conditions is met:

  • The individual’s usual or principal place of residence is in the UAE, and the centre of their financial and personal interests are in the UAE or other conditions and criteria provided in a specific decision (to be) issued by the UAE MoF.
  • The individual has been physically present in the UAE for a period of 183 days or more in a consecutive 12-month period.
  • The individual has been physically present in the UAE for a period of 90 days or more over a consecutive 12-month period and is a UAE citizen, UAE resident or GCC national who either (i) has a permanent place of residence in the UAE or (ii) carries out a job or business in the UAE.

The definitions provided appear to align with internationally recognized best practices, albeit certain specific nuances (in particular, with respect to the concept of treaty residency in a double tax treaty context) have been introduced.

As the Resolution specifically refers to, inter alia, the concept of tax residence “under the applicable Tax Law in the State” (Article 3 (1) of the Resolution), the definition of “UAE tax residency” will need to be further reviewed upon the issuance and in light of the upcoming UAE CT Law.

Application of international agreements

Where an international agreement, such as a tax treaty, specifies certain conditions for determining tax residency, the Resolution provides that the international agreement shall continue to apply.

Consequently, when assessing their tax residence for the purposes of applying for an international agreement (including a double tax treaty), UAE persons would need to refer to the specific criteria set forth in the international agreement itself.


Where a person is considered a tax resident under either of the definitions outlined above, they may apply to the FTA to obtain a TRC, which is often a formal requirement for UAE residents wishing to claim benefits under the relevant tax treaty or other forms of tax relief (outside the UAE).

The FTA will approve the application and issue a TRC when it is satisfied the applicant meets the relevant conditions. The FTA will also be responsible for issuing clarifications and directives for the implementation of this Resolution.

Furthermore, the Resolution provides for specific rules facilitating the collaboration between the FTA and all government agencies in the UAE to allow the collection of all relevant information, data and documents by the FTA, to implement the provisions of the Resolution.


UAE businesses and individuals should refer to the provisions of the Resolution to adequately assess their UAE residency status for UAE tax purposes. UAE businesses that may be subject to UAE CT (after implementation of the announced UAE CT legislation) should consider these rules along with any other specific tax residency rules that may be included in the upcoming CT legislation.

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