Authorities in the United Arab Emirates have privately indicated they will allow expats to spend more time abroad without losing their lucrative tax status as the country tries to incentivise residents who fled after the outbreak of the Iran conflict to return, reported Financial Times on Wednesday.
Authorities may ease rules requiring individuals to spend a minimum number of days in the UAE to qualify as tax residents for those who left after the war began, according to people familiar with the plans. The step is significant for Dubai, a regional financial hub that draws wealthy individuals with zero income tax, strong safety credentials, and access to capital.
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The UAE operates two tracks for expats seeking to benefit from tax residency. Individuals typically have to spend 183 days there within a consecutive 12-month period, or 90 days if they have significant ties to the country such as employment or a permanent home.
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Senior officials at the UAE’s Federal Tax Authority are reluctant to issue blanket exemptions but have advised that applications will be addressed on a case-by-case basis once the conflict has ended, according to two lawyers briefed by the FTA.
It is working on rule relaxations with the Federal Authority for Identity, Citizenship, Customs and Port Security. As well as day counts, the UAE has a “centre of life” clause which allows tax residency if a person’s “usual or primary residence and centre of financial and personal interests” are in the UAE. Force majeure may also be taken into account by authorities when determining residency, said FT.
Authorities may ease rules requiring individuals to spend a minimum number of days in the UAE to qualify as tax residents for those who left after the war began, according to people familiar with the plans. The step is significant for Dubai, a regional financial hub that draws wealthy individuals with zero income tax, strong safety credentials, and access to capital.
ALSO READ: US military says hit Iran missile sites near Strait of Hormuz with '5,000-pound bunker buster' bombs
The UAE operates two tracks for expats seeking to benefit from tax residency. Individuals typically have to spend 183 days there within a consecutive 12-month period, or 90 days if they have significant ties to the country such as employment or a permanent home.
(Join our ETNRI WhatsApp channel for all the latest updates)
Senior officials at the UAE’s Federal Tax Authority are reluctant to issue blanket exemptions but have advised that applications will be addressed on a case-by-case basis once the conflict has ended, according to two lawyers briefed by the FTA.
It is working on rule relaxations with the Federal Authority for Identity, Citizenship, Customs and Port Security. As well as day counts, the UAE has a “centre of life” clause which allows tax residency if a person’s “usual or primary residence and centre of financial and personal interests” are in the UAE. Force majeure may also be taken into account by authorities when determining residency, said FT.
