The UAE has redefined the criteria of tax residency for individuals to qualify for a tax residence certificate (TRC) through Cabinet decision no 85 of 2022. According to this, any UAE national, a GCC national, or an expatriate having UAE residence permit who has been physically present in the UAE for a minimum of 90 days over a year, will be regarded as a tax resident in the UAE, provided they have a permanent place of residence, employment, or business in the UAE. Sometimes, one becomes a tax resident of any other country as well, during the same period and if so, he can review the benefits of the tax treaty between the two countries and determine the tax residency, considering the tie-breaker rule.
The resident is defined in different ways in different tax treaties. For instance, India, Ireland, Israel etc have certain days’ stay as a criterion, while countries like Saudi Arabia and the UK refer to the local laws to determine tax residency.
Determining your tax residency will play a vital role in deciding which country will be taxing your world income, and tax treaties can be a respite in many scenarios.