News: Khaleej Times: Tax residency rules in UAE: All your questions answered

Who is a natural or juridical tax resident?

According to Libbie Burtinshaw, Head of Operations at PRO Partner Group, the Domestic Tax Residency regulation defines a UAE tax resident as either a natural person or a juridical person.

A natural person is defined as an individual with a permanent place of residence in the UAE, or one that is employed, or has a business in, the UAE. It also refers to individuals who:

• have spent 183 days or more in the UAE over a consecutive 12-month period
• primarily reside in the UAE
• are based out of the UAE for financial and personal interest.

• UAE nationals, valid Permanent Resident Permit holders, or GCC member of state nationalities must be physically present for 90 days, or more, over a 12-month period.

A juridical person refers to a business or entity which is legally separated from its owners. Tax residency applies to businesses or entities established or recognised in the UAE.

How will this impact investment decisions in the country?

Libbie explains that being a UAE Tax Resident does not make the individual subject to personal income tax, but will help individuals who meet the criteria understand their tax residency position.

The UAE's 9 per cent Corporate Tax (CT) will be active from June 2023. Marked against global corporate tax rates, the new CT policy is still very competitive. A 0 per cent CT rate for taxable income up to Dh375,000 should support small and medium businesses as well as startups.

Read the full article on Khaleej Times here