Legislation Details
- Full Title: Cabinet Resolution Concerning Determining the Tax Residence
- Law Type: Cabinet Resolution
- Law Number: No. (85) of 2022
- Issued Date: 02 Sep 2022
- Effective Date: 01 Mar 2023
- Official Gazette: No. 736
- Sector: Tax
- Status: Active
- Number of Articles: 18
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes the requirements and conditions for determining a person's tax residence in the United Arab Emirates. It defines the criteria for legal persons and natural persons to be considered tax residents, and outlines the process for obtaining a tax residence certificate from the Federal Tax Authority (FTA). The Resolution aims to provide clarity on tax residency status, which is important for businesses and individuals subject to UAE tax laws. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 1-2)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to define the requirements and conditions for determining a person as a tax resident in the United Arab Emirates. It applies to both legal persons and natural persons. The purpose is to provide clear criteria for establishing tax residency status, which is relevant for the application of UAE tax laws. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 2)
What are the key definitions under this law?
The Resolution provides the following key definitions:
- State: United Arab Emirates
- Minister: Minister of Finance
- FTA: The Federal Tax Authority
- Person: Natural or legal person
- Tax Resident: A person residing in the UAE as specified in Articles 3 and 4
- Business: Any regular, continuous, and independent activity practiced by a person
- Residence Permit: A permit issued by UAE authorities to grant a natural person the right to reside or work in the UAE
- Permanent Residence: A place located in the UAE and available to a natural person at all times
- International Agreement: Any bilateral or multilateral agreement to which the UAE is a party
- Tax Residence Certificate: A certificate issued by the FTA proving a person's tax residency in the UAE
- Tax: Any federal tax imposed under UAE tax law
- Tax Law: Any federal law under which a tax is imposed
(Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 1)
What are the main obligations and requirements?
The main obligations and requirements under this Resolution are: 1. Legal persons are considered UAE tax residents if they are established, formed, or recognized under UAE legislation (excluding foreign branches), or if they are considered tax residents under applicable UAE tax law. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 3) 2. Natural persons are considered UAE tax residents if: (a) their usual or main place of residence and the center of their financial and personal interests are in the UAE, or they meet criteria specified by the Minister; (b) they have been physically present in the UAE for 183 days or more in a 12-month period; or (c) they have been physically present in the UAE for 90 days or more in a 12-month period, hold UAE or GCC nationality/residency, and have a permanent place of residence or business in the UAE. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 4) 3. Persons considered UAE tax residents can apply to the FTA for a tax residence certificate. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 5)
Which authorities or bodies are responsible for enforcement?
The key authorities responsible for enforcement under this Resolution are: 1. The Federal Tax Authority (FTA): The FTA is responsible for issuing tax residence certificates to eligible applicants, and can request information from government agencies to implement the provisions of the Resolution. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 5, 7) 2. The Minister of Finance: The Minister is responsible for issuing decisions to determine the conditions, controls, and criteria for implementing the provisions of the Resolution. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 8)
What are the penalties for non-compliance?
The Resolution does not specify any penalties for non-compliance. The legislation does not provide details on penalties. (Cabinet Resolution Concerning Determining the Tax Residence, 2022)
How does this law interact with other UAE legislation?
The Resolution references the following related UAE legislation: - The Constitution of the UAE - Federal Law No. (1) of 1972, Concerning the Competences of Ministries and the Powers of Ministers, and its amendments - Federal Law by Decree No. (13) of 2016, Establishing the Federal Tax Authority (FTA), and its amendments - Federal Law No. (7) of 2017, Concerning Tax Procedures, and its amendments (Cabinet Resolution Concerning Determining the Tax Residence, 2022)
When did this law come into effect?
This Cabinet Resolution was issued on 02 September 2022 and will come into effect on 01 March 2023. (Cabinet Resolution Concerning Determining the Tax Residence, 2022, Art. 9)
Source Documents
This article analyses Cabinet Resolution Concerning Determining the Tax Residence for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.