When was the New UAE Tax Resident definition introduced?

From 1st March 2023 a new definition of UAE tax resident was introduced by the UAE Cabinet of Ministers via Decision No. 85 of for 2022 of 9 September 2022 (“Decision 85”). The new definition will apply when considering UAE tax law and its wide range of bilateral tax treaties

As most legal novelties, Decision 85 was explained and clarified via Ministerial Decision No. 27 of 2023 on Implementation of Certain Provisions of Decision 85 of March 2023.

What is the new UAE Tax Resident definition?

The new UAE Tax Resident definition is reflected in Article 4 of Decision 85:

A physical person shall be deemed as a Tax Resident in the State, in case of meeting any of the following conditions:

  • 1- In case the habitual or primary place of residence and the place of fiscal and personal interests are located in the State and meet the conditions and standards determined in the decision of the Minister.
  • 2- In case of being physically present in the State for (183) days or more, within the relevant duration of (12) consecutive months.
  • 3- In case of being physically present in the State for (90) days or more, within the relevant duration of (12) consecutive months, and holding the nationality of the State or a valid Residence Permit, or the nationality of any of the GCC Countries, and meeting any of the following conditions:
    • a- Having a Place of Permanent Residence in the State.
    • b- Holding a position or exercising Activities in the State.

What is meant by ‘place of permanent residence’ and ‘holding a position or exercising activities’?

Decision 27 clarifies what is meant by permanent resident or holding a position or exercising activities:

Article 5 – Permanent Place of Residence

  1. The permanent place of residence is a house, apartment, furnished room or any other form of dwelling that is continuously available to a natural person.
  2. A permanent place of residence is considered available to a natural person as long as the natural person continuously has the right to occupy it at all times and regularly with a degree of permanence and stability and not just occasionally or for short term stay purposes.
  3. The permanent place of residence is not required to be owned by the natural person, but it can be a rented place or a place occupied by them in any other way as a dwelling.

Article 6 – Job

  1. A natural person is considered to be exercising a job in the State in any of the following two cases:
    • a. If they are a party to a contract with an employer that is incorporated, constituted or otherwise recognized in the State, whereby the natural person undertakes to provide a service to the employer under its management or supervision in exchange for a wage that the employer in the State undertakes to pay.
    • b. If they are in a continuous relationship from which the natural person earns all or a substantial part of their work income from one party, so that the income they receive is considered a wage for the work that they perform in the State.
  2. The nature of the job can be limited or unlimited and it can be performed on a full or part time basis.
  3. Voluntary roles, for which a natural person does not conclude a contract, are not considered a job.

When the above are met, individuals will be deemed as UAE tax resident and be subject to tax laws. This does not mean that they will be subject to personal income tax in the UAE, mainly because the UAE does not apply personal income tax on individuals. Important to note that as of June 2023 it does apply corporate tax on UAE based entities. We do invite you to revise our earlier publications in this respect in this link.

This being said, we strongly recommend obtaining a personal assessment by expert tax advisors as recent circulars seem to augur that free zones will also be subject to the new upcoming tax.

Decision 85, in its Article 3 also makes a reference to legal entities stressing that they will be deemed UAE tax residents:

  • 1- In case it is established, formed or recognised according to the legislation in force in the State; this does not apply to the branch registered by a foreign juristic person in the State.
  • 2- In case it is deemed as a Tax Resident by virtue of the Tax Law in force in the State.

Why are these definitions important?

This is important, these definitions are important because many bilateral tax agreements do make a reference to UAE law for the purposes of determining when a person is deemed a UAE resident and the new regulation does provide great light into what is and what is not a UAE tax resident.

Who Can Apply for a UAE Tax Certificate? How? What do I need to prepare?

Those – individuals or legal entities – that fall within the new tax resident definitions will be able to apply for tax certificates through the Federal Tax Authority.

It is important to stress that if you are currently looking to apply during 2023 you should be applying for the year 2022 when the 90 days rule does not still apply. As per Decision 85 the entry into force of the new regulation and new UAE Tax Resident definition is 1st March 2023.

The documents that you can expect to collect per year of application is the following:

  1. a)      Passport
  2. b)      Emirates ID and visa
  3. c)      Ejari or Title Deed
  4. d)      Banks Statements (mínimum 6 months per year of application)
  5. e)      Salary Certificate
  6. f) Entry and Exit report (issued by immigration) showing the 90 days or 180 days stay based on the application route.

Evidently all adjusted and base don the UAE tax resident definition under which one applies.


We trust that this publication will help you to understand the basics about the new UAE tax resident definition and we remain at your complete disposal for any questions regarding this publication of general application. We can expect slight modifications on above as the new regulation commences to be applied.

For more information about UAE law  you can visit all our publications in this link as well as the videos of our director Maria Rubert.