UAE unveils tax residency criteria

[Martin Everson]

Not sure why you quoted point 1 as your not a UAE national right? So it does not apply to you. So point 2 is irrelevant as it applies by reason of meeting point 1 🙄.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[ADROCK123]

Martin Everson said:
Not sure why you quoted point 1 as your not a UAE national right? So it does not apply to you. So point 2 is irrelevant as it applies by reason of meeting point 1 🙄.
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Hm I guess so, seems like for canadians you are screwed either way

 

[Martin Everson]

ADROCK123 said:
Hm I guess so, seems like for canadians you are screwed either way
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Yup...but no worries this is a good debate on the topic. Do things properly and 99.9% of people will be fine.

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[karishi]

Martin Everson said:
Not sure why you quoted point 1 as your not a UAE national right? So it does not apply to you. So point 2 is irrelevant as it applies by reason of meeting point 1 🙄.
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I don't see that being a uae national is a requirement for point 1, I see point 1 as more as what it is in UE countries, where you are considered resident if you have the center of your personal and/or economic interests in dubai and you are resident of Dubai.
A good example is that if you have wife and kids in europe, you can spend 365 days in Dubai, but when you re enter the country, you will be taxed as the center of personal interest was the EU country. This happened for lots of soccer players who went to dubai to play but had family in EU. Same would apply for dubai, if you stay in dubai less than 90 days because your work requires travelling abroad but you have your family in dubai and you have true business in dubai, you will be considered a tax resident in dubai, which could mean nothing if you also trigger residency in other places. It all depends on what your business is and how it is structured.
As often discussed, as a digital nomad, the most important thing is how you exit your home country and how you severe ties: most EU countries consider you as still resident in the country if you move to UAE unless proven contrary, for 2-3 years. so the tax authority will likely check on you, and you better have solid answers ( which if you don't have family or kids, means having at least a tax certificate in dubai and not spending too much time in your home country ). What matter most is whether the tax authority comes after you ( which is unlikely if you are 22-25 years old and never paid serious taxes, really likely if you are 40 ) and what you risk if it does, I mean if you risk prison, or a fine. After that, it's all risk/reward.

 

[Martin Everson]

karishi said:
I don't see that being a uae national is a requirement for point 1, I see point 1 as more as what it is in UE countries, where you are considered resident if you have the center of your personal and/or economic interests in dubai and you are resident of Dubai.
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What part of point 1 did you not understand?

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[karishi]

Martin Everson said:
What part of point 1 did you not understand?
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I mean this point:

Natural persons (individuals) are tax resident in the UAE if:

• 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 prescribed by the minister; or

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My understanding that you don't need to be a UAE national for this to apply, like you don't have to be a UAE national to be tax resident in the UAE ( or any EU state ) if you stay 182 days

 

[Martin Everson]

karishi said:
I mean this point:


My understanding that you don't need to be a UAE national for this to apply, like you don't have to be a UAE national to be tax resident in the UAE ( or any EU state ) if you stay 182 days
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Then why were you quoting my reply that was to another point? You do understand the point 1 I was talking about is the point 1 in the text quoted by ADROCK123 right?

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[MiddleEuroAsia]

Guys it's not that deep, your average south asian compliance officer in dubai won't give a s**t if you have a tax residency in the UAE or not.
He wants to see your EID, your proof of address (Ejari) and having a good case so he can open an account for you.
The tax residency cert is great if you want to have that assurance and which is indeed very helpful as some financial institutions in Switzerland, EU and USA require that cert to be able to open an account or trade with them, or will they request it later anyway if you have substantial amount of money going in and out of your account.
it's also great since you will be able to utilize DTTs and lots of other useful things.
but just don't be dumb and spend most of your time in Spain or Portugal thinking you are safe and ask what went wrong when the EU tax officer knocks at your door.
What happens on the Ground is verry different from what's written in the laws. the kafala system in qatar is a perfect example of this, they said that they get rid of that, but the reality is, well, you can see by yourself.

 

[Fred]

MiddleEuroAsia said:
Guys it's not that deep, your average south asian compliance officer in dubai won't give a s**t if you have a tax residency in the UAE or not.
He wants to see your EID, your proof of address (Ejari) and having a good case so he can open an account for you.
The tax residency cert is great if you want to have that assurance and which is indeed very helpful as some financial institutions in Switzerland, EU and USA require that cert to be able to open an account or trade with them, or will they request it later anyway if you have substantial amount of money going in and out of your account.
it's also great since you will be able to utilize DTTs and lots of other useful things.
but just don't be dumb and spend most of your time in Spain or Portugal thinking you are safe and ask what went wrong when the EU tax officer knocks at your door.
What happens on the Ground is verry different from what's written in the laws. the kafala system in qatar is a perfect example of this, they said that they get rid of that, but the reality is, well, you can see by yourself.
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Thanks for the reality approach from someone actually living in Dubai.

I don't want to blame or pushback any from the earlier mentioned theories but what @MiddleEuroAsia mentions here is actually the reality - nothing else.

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[ADROCK123]

karishi said:
I mean this point:


My understanding that you don't need to be a UAE national for this to apply, like you don't have to be a UAE national to be tax resident in the UAE ( or any EU state ) if you stay 182 days
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no he's correct, if you are canadian the official tax treaty doesn't recognize you as a uae tax resident unless you are uae national. im sure other countrie's don't have this but if you are canadian this is what it is

 

[Konstanz]

ADROCK123 said:
no he's correct, if you are canadian the official tax treaty doesn't recognize you as a uae tax resident unless you are uae national. im sure other countrie's don't have this but if you are canadian this is what it is
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in such case you must cut all ties to Canada because DTA is not useful.

 

[karishi]

Martin Everson said:
Then why were you quoting my reply that was to another point? You do understand the point 1 I was talking about is the point 1 in the text quoted by ADROCK123 right?
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sorry no I misunderstood 😀

MiddleEuroAsia said:
Guys it's not that deep, your average south asian compliance officer in dubai won't give a s**t if you have a tax residency in the UAE or not.
He wants to see your EID, your proof of address (Ejari) and having a good case so he can open an account for you.
The tax residency cert is great if you want to have that assurance and which is indeed very helpful as some financial institutions in Switzerland, EU and USA require that cert to be able to open an account or trade with them, or will they request it later anyway if you have substantial amount of money going in and out of your account.
it's also great since you will be able to utilize DTTs and lots of other useful things.
but just don't be dumb and spend most of your time in Spain or Portugal thinking you are safe and ask what went wrong when the EU tax officer knocks at your door.
What happens on the Ground is verry different from what's written in the laws. the kafala system in qatar is a perfect example of this, they said that they get rid of that, but the reality is, well, you can see by yourself.
Click to expand...

For me they didn't even need an Ejari, a PO BOX + EID + Residence Visa was enough ( although later on I provided them with an EJEARI as I had one and needed the address to be the same on Interactive brokers and My UAE bank ).
And I totally agree that there is a big difference between making a law / signing a treaty and enforcing the law / treaty. I mean, you don;t have to go to Dubai to see that, in part of the EU ( especially Italy/Greece ) that's the norm, laws are passed to please Germany, but then not enforced.
And yes in any case there is always the fact not to have ties with any country, especially your home country.

ADROCK123 said:
no he's correct, if you are canadian the official tax treaty doesn't recognize you as a uae tax resident unless you are uae national. im sure other countrie's don't have this but if you are canadian this is what it is
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ok I misunderstood the point he was talking about, I was making an example of what would get you a tax certificate. Becoming a UAE national is really hard, either 30 years of residency or special merit How to Get UAE Citizenship: Guide on Obtaining Emirati Passport

Last edited: Nov 27, 2022

 

[Martin Everson]

MiddleEuroAsia said:
Guys it's not that deep, your average south asian compliance officer in dubai won't give a s**t if you have a tax residency in the UAE or not.
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This may change with UAE's plans for new digital platform to share information between public and private sector. Pretty sure willful tax evasion will fall under money laundering sadly.

UAE announces new plans to stop money laundering, terror financing​

https://www.arabianbusiness.com/pol...ans-to-stop-money-laundering-terror-financing

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[MiddleEuroAsia]

Martin Everson said:
This may change with UAE's plans for new digital platform to share information between public and private sector. Pretty sure willful tax evasion will fall under money laundering sadly.

UAE announces new plans to stop money laundering, terror financing​

https://www.arabianbusiness.com/pol...ans-to-stop-money-laundering-terror-financing
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Martin, how many times did you hear that MENA countries plans to do this and that? a lot, how many times did you see these laws being made? a handful of times! how many times did you see these laws actually enforced? yeah, that's a different answer.
You can't rely on laws on a country whose political leaders can change these very laws on a whim if they feel like it. You need connections, you need to know what will pass and what won't! you need to actually see how things work on the ground!.

 

[Martin Everson]

MiddleEuroAsia said:
Martin, how many times did you hear that MENA countries plans to do this and that? a lot, how many times did you see these laws being made? a handful of times! how many times did you see these laws actually enforced? yeah, that's a different answer.
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Do you mind being more specific here about these plans you mention that are not followed through? I am talking in relation to fighting money laundering and terror financing not building some man made island in the water. UAE is trying to get off FATF grey list. You think they are not gonna follow through in this case then?

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[turtle]

MiddleEuroAsia said:
Martin, how many times did you hear that MENA countries plans to do this and that? a lot, how many times did you see these laws being made? a handful of times! how many times did you see these laws actually enforced? yeah, that's a different answer.
You can't rely on laws on a country whose political leaders can change these very laws on a whim if they feel like it. You need connections, you need to know what will pass and what won't! you need to actually see how things work on the ground!.
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Exactly. UAE plans to stop money laundering every 6 months but never happened.

 

[Nomade]

karishi said:
So my understanding is that we are making confusion between tax residency and residency. AFAIK if you are a resident in the UAE the bank will not report you by CRS. To be clear, to open a bank account you just need a residence visa and an emirates ID, so in case they could onnly report you to your country of citizenship through the passport linked to the EID. I've not read anywhere that the rule that you are a resident if you enter every six months will change. Being a resident is different from being a tax resident, and in my opinion here they relaxed the rules for tax residency. Basically having a house, living there for 3 months and then renting it on airbnb might be enough to qualify you as a Fiscal Resident, down from 180 days. At that point you just need to avoid triggering residency anywhere else and you are ok . I have no idea what banks will do, probably depends on a bank by bank basis, I hope that before reporting anything they will contact you.
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Fred said:
That's correct and how it's working in practice without getting lost in theory !
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Do you have many clients who spend 1-3 months in Dubai, and 6-9 months in Europe, even high tax hells like France Italy Spain Germany, manage their international businesses there, yet still comfortably avoid triggering PE or tax residence?

 

[Fred]

Nomade said:
Do you have many clients who spend 1-3 months in Dubai, and 6-9 months in Europe, even high tax hells like France Italy Spain Germany, manage their international businesses there, yet still comfortably avoid triggering PE or tax residence?
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Yes - Spain, Italy and South France - no further insights.

No one is bothering with Germany 😀

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[Nomade]

Haha yes Germany sucks. Sorry, by no further insights did you mean you don't know what they're doing to avoid these, just the fact that many are indeed doing so? Could you PM me?

 

[Fred]

Nomade said:
Haha yes Germany sucks. Sorry, by no further insights did you mean you don't know what they're doing to avoid these, just the fact that many are indeed doing so? Could you PM me?
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Yes once our service is provided and the Dubai Setup runs on Auto Pilot we have only communication about Banking, Renewals, Changes in Structures etc.

They are all doing well - the one or the other way around - otherwise they would have complained here already.

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