Tax residency in the UAE: New Cabinet Resolution No. 85 of 2022

Fidinam DMCC News

The U.A.E. Cabinet, that is the executive branch of the UAE Federation, handling the execution of all internal and external affairs as per the UAE Constitution and the federal laws has recently approved the Cabinet Resolution No. 85 of 2022 detailing guidelines for the tax residency of natural and legal person in the UAE as summarized here below.


A legal person shall be considered as a tax resident in the UAE if such entity was:
(a) established; or
(b) formed; or
(c) recognized
under the UAE laws.


A natural person shall be considered as a tax resident in the UAE if the following conditions are met:

  1. A person’s usual or principal place of residence, and his primary financial and personal interest are within the UAE or; the person fulfils the criteria specified by a decision of the Minister of Finance; or;
  2. A person can provide evidence of his physical presence within the State for a duration of 183 days or more during the relevant 12-month period; or
  3. A person can provide evidence of his physical presence within the State for a duration of 90 days or more, during a period of 12 months and holds the nationality of the State, or has a valid residence permit in the country, or is a national of any of the Member States of the Gulf Cooperation Council (“GCC”), and fulfils either of the following: i. He has a permanent place of residence in the State or;
    ii. He is doing a job or business in the State.


The provisions of double tax treaties signed by the UAE, whenever applicable, shall supersede the provisions of the Cabinet Resolution No. 85 of 2022.

What is coming next

Cabinet Resolution No. 85 of 2022 is one more piece of the puzzle related to direct taxation in the UAE. To have a complete understanding of direct taxation environment in the UAE we are now looking forward for the release of the below additional legislation that is expected to be published anytime soon:

  • Executive regulations pertaining the introduction of 9% corporation tax
  • Executive regulations pertaining the tax residency to be issued by Ministry of Finance
  • Directives and clarifications to be issued by the Federal Tax Authority for the issuance of tax residence certificates

Our Comment

With the introduction of 9% corporation tax (effective for financial years starting on or after 1st June 2023) a clear definition of tax residency brings more clarity to the tax legislative framework of the UAE for both internal and international perspective.

Until the approval of Cabinet Resolution No. 85 of 2022 there was no definition of tax residency and the release of Tax Residency Certificates (TRC) was managed initially by Ministry of Finance and later on by the Federal Tax Authority (FTA) based on practice and directives of such authorities upon request of the applicant for the purpose of taking advantage of a double tax treaty.

We will have to wait for the executive regulations, guidelines and clarification that will be issued by Ministry of Finance and FTA to have a better understanding of practical impact of the new legislation, however art. 4 of the Cabinet resolution seems to broaden the conditions to be fulfilled by individuals in order to obtain a TRC.

As per current situation a natural person willing to apply for a TRC has to submit an immigration report showing 180 days presence in the country while the new Cabinet Resolution sets a reduced threshold of 90 days for individuals with permanent place of residence in the state or doing a job or business in the state.

If confirmed by forthcoming executive regulations and directives the new Cabinet Resolution will facilitate the adoption of UAE as an elective place of (tax) residence for businessmen and high net worth individuals with economic interests spanning over different jurisdictions but not having in any of such other jurisdiction their primary financial and personal interests.

As far as concerns the concept of tax residency applicable to legal person, more information about the application of this Cabinet Resolution will be available alongside with clarifications regarding the 9% corporation tax.

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