Tax residency in the UAE

Tax residency in the UAE makes it possible to use the preferential tax regime. It is absolutely legal to maintain the complete confidentiality of banking services for both local and foreign accounts.

Comfortable tax system makes the UAE attractive to large international companies, holdings, trade and investment structures.

          For individuals, the UAE offers favorable tax conditions:

• There are no corporate taxes or personal income taxes in this country;
• The only tax is 5% VAT, applied when selling goods and services in the local territory.

The benefits can be used by companies and investors who have tax residency status in the country.

Tax residence means that the taxpayer belongs to a particular country. It also means the tax rate and benefits that the taxpayer can count on.

In order to avoid double taxation, countries sign special agreements. The UAE has such agreements with more than 60 countries. Both individuals and legal entities can obtain UAE tax resident status.

An important change in international law that must be considered when changing tax residency.

In 2018, an important addition to the Convention on Mutual Administrative Assistance in Tax Matters was adopted.
According to this amendment, financial institutions must take into consideration the reason for obtaining tax residency by the client.

• With the investment origin of the residency, the tax certificate cannot protect against information exchange with jurisdiction of origin. Information exchange will take place both with the country of tax residency and with the country of actual residence.
• The UAE remains one of the few jurisdictions in which the applicant can apply for a tax residency not only on investment grounds. Thus, the client can obtain tax residency as the owner or employee of his own business.

We draw your attention to the fact that this article is for informational purposes only. For more advice, contact us at the contacts listed on the site.