Understanding UAE Tax Residency for Individuals: A Step-by-Step Guide
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183-Day Residency Test
A natural person is classified as a UAE Tax Resident if they have been physically present in the UAE for at least 183 days within a continuous 12-month period. This classification applies regardless of the activities undertaken during this period.
For the purpose of this test, a “day” is considered a full calendar day, and a “month” is defined as a calendar month. Any partial day spent within UAE borders is counted as a full day. The days do not need to be consecutive, and any exceptional circumstances that prevent departure from the UAE may be excluded from the count.
With UAE’s evolving corporate tax law framework, understanding your personal tax residency status is now more important than ever.
Example: Days Spent in the UAE
Assume in 2025, Harry’s travel records indicate multiple visits to the UAE:
- Arrival: 3 January, 8 June, 23 August, 28 September
- Departure: 6 March, 9 August, 6 September, 11 November, 15 December
Since every part of a day spent in the UAE counts toward the residency threshold, Harry’s total presence amounts to 186 days. Thus, he qualifies as a UAE Tax Resident for the 12-month period from January to December 2025.
90-Day Residency Test
If a natural person has spent fewer than 183 days but at least 90 days in the UAE within a continuous 12-month period, they may still qualify as a Tax Resident if they meet both of the following conditions:
- They have the legal right to reside in the UAE as a UAE national, a citizen of another GCC country, or hold a valid UAE residence permit.
- They either maintain a Permanent Place of Residence in the UAE or conduct employment or business within the country.
The definition of a “day” in this test follows the same criteria as in the 183-day residency rule.
Permanent Place of Residence
A Permanent Place of Residence refers to a furnished dwelling—such as a house, apartment, or room—that is consistently available for the individual’s use. This property does not have to be owned; it can be rented or occupied under other legal arrangements, provided it offers continuous and stable availability. Temporary stays, such as accommodations for business trips, leisure, or short-term visits, do not qualify.
Employment Criteria
A natural person is deemed to be employed in the UAE if:
- They have a formal employment contract with an employer registered or recognized in the UAE.
- The employment is under the employer’s supervision, with remuneration provided for services rendered.
- A significant portion or the entirety of their income is derived from a single employer in the UAE.
- The work engagement is not voluntary but a paid occupation.
The nature of the contract—whether full-time, part-time, limited, or unlimited—is not a determining factor for this classification.
Business Activities
A business is considered any economic activity conducted on a regular, ongoing, and independent basis. This includes industrial, commercial, agricultural, professional, and vocational activities, as well as services and asset management.
Business operations may involve the development, production, marketing, or distribution of tangible and intangible assets. Vocational activities typically refer to skilled trades, whereas professional services include occupations such as consulting, teaching, legal, and medical professions.
Business activities do not necessarily need to generate profits and may be conducted for a short-term period or continuously over time.
Exceptional Circumstances Affecting Physical Presence
In some cases, an individual may be unable to leave the UAE due to unforeseen events beyond their control. Exceptional circumstances may include:
- National or local emergencies (e.g., natural disasters, border closures, war, civil unrest).
- Personal emergencies (e.g., sudden illness or injury requiring immediate medical attention).
In such situations, the additional days spent in the UAE due to these circumstances may be excluded from the residency calculation.
Usual or Primary Place of Residence & Financial/Personal Interests
A natural person can also be classified as a UAE Tax Resident if both their usual or primary place of residence and their financial and personal interests are centred in the UAE.
- Usual or Primary Place of Residence: The country where an individual habitually or regularly lives as part of their routine and where they spend the majority of their time.
- Centre of Financial and Personal Interests: This is determined by factors such as employment, business location, financial investments, family and social ties, memberships in organizations, and participation in cultural or recreational activities.
To qualify under this criterion, the UAE must be the most significant location for an individual’s financial and personal interests, even if they have connections in other countries. The depth and importance of these connections—such as close family residing in the UAE or business operations established in the country—carry more weight than minor affiliations, like club memberships in another country.
By understanding and applying these residency criteria, individuals can determine their tax obligations in the UAE and ensure compliance with local tax regulations.
Note:
- TRC can be applied on FTA portal for natural person once he/she completes 183 days in UAE.
For legal entities, check the eligibility and procedure to apply for TRC in the UAE for Legal Persons and ensure full compliance.
Conclusion
Understanding the UAE tax residency criteria for natural persons is essential for individuals to assess their tax obligations and ensure compliance with the country’s regulations. The classification as a UAE Tax Resident is primarily based on physical presence, legal residency status, and economic or personal ties to the UAE. By carefully considering the 183-day and 90-day tests, along with factors like permanent residence, employment, and business activities, individuals can determine their residency status with clarity. Furthermore, the significance of financial and personal interests in the UAE adds another layer of evaluation, ensuring a comprehensive approach to tax residency determination.
Given the evolving tax landscape in the UAE, individuals must remain informed about the applicable rules and seek expert guidance where necessary. Proper documentation and adherence to the residency criteria can help mitigate potential tax risks and provide a structured approach to compliance.
To complete your UAE Tax Residency journey, it’s essential to understand the process of obtaining a Tax Residency Certificate in the UAE to validate your status officially.
Why BCL Globiz?
At BCL Globiz, we specialize in providing expert tax advisory services tailored to the complexities of UAE tax residency and compliance. Our deep understanding of UAE tax laws, combined with our practical approach, allows us to offer comprehensive guidance to individuals and businesses navigating tax residency rules. Whether you require assistance in determining your tax residency status, structuring your business operations for optimal compliance, or understanding your tax obligations, BCL Globiz ensures that you receive clear, accurate, and strategic advice.
With a team of seasoned professionals, we help clients maintain compliance with UAE tax regulations while optimizing their tax position. Trust BCL Globiz to simplify the complexities of UAE tax residency and support your financial and business goals effectively.
For more details contact our expert at rakesh@bclglobiz.com and visit www.bcl.ae today.
