A Golden Visa Is Not Tax Residency

The UAE government portal describes the golden visa as long-term, renewable residence visas for the founding team valid for five or ten years, carrying the privilege of not needing a sponsor and the ability to stay outside the UAE for more than the usual period of six months needed to keep a residence visa valid.

That last point is worth reading twice. An ordinary residence visa lapses after a continuous absence beyond six months. A golden visa does not. So a golden visa holder can spend most of the year elsewhere and still hold a valid UAE residence permit — which is precisely the situation in which someone might believe themselves to be a UAE tax resident and be nothing of the kind. The golden visa renewal process is also a critical consideration for long-term planning, especially when considering which licensing jurisdiction suits the venture for business activities.

Article 4 of Cabinet Decision No. 85 of 2022 provides that a natural person is a Tax Resident in the State where any of three conditions are met. They are alternatives — meeting one is enough — and only the third has anything to do with holding a residence permit.

The Ministry of Finance has confirmed, through Ministerial Decision No. 27 of 2023, that all days or parts of a day in which an individual is physically present in the UAE are counted when working out whether either threshold is reached. A day of arrival and a day of departure both count. This is particularly relevant for those considering the golden visa property requirements as part of their residency strategy.

The Federal Tax Authority's guide on tax residency sets the 90-day route out as three things that must all be true: at least 90 days of physical presence, a legal right to reside — by UAE or GCC nationality or a valid Residence Permit — and, in addition, either a Permanent Place of Residence in the UAE or employment or a Business carried on here.

A golden visa gives you the second of those. It does not give you the first or the third. Someone who spends sixty days a year in Dubai on a golden visa has not met the test, and no amount of visa validity changes the arithmetic.

What counts as a Permanent Place of Residence is narrower than 'a property'. The Authority describes it as a furnished house, apartment, room or other dwelling that the person has arranged to have continuously available to them. It does not have to be owned — it can be rented or otherwise occupied — but it must be available at all times, continuously and on a regular basis, with some degree of permanence. A place occupied only occasionally, or temporarily for a short stay for business, leisure or education, does not qualify.

Being a Tax Resident under the Cabinet Decision and holding a Tax Residency Certificate are not the same event. Article 5 of the Decision provides that a person who is a Tax Resident may apply to the Federal Tax Authority for a certificate, in the form and manner the Authority specifies, and the Authority may approve the application if satisfied the requirements are met.

There are also two different certificates. One is issued for domestic purposes. The other is issued for the purposes of a specific Double Taxation Agreement, and it names that agreement. A foreign tax authority asking for proof of UAE residency under a treaty is asking for the second, and the Federal Tax Authority will only issue it where it is satisfied the applicant meets the conditions under that treaty. It can request supporting evidence, and passport entry and exit records are the ordinary evidence of a day count.

Nothing in UAE law can stop another country treating you as resident under its own rules. Most countries apply day counts, home tests, family tests or domicile rules of their own, and several of them can be satisfied simultaneously.

Where two countries both claim you, the relevant Double Taxation Agreement resolves it. Article 6 of Cabinet Decision No. 85 of 2022 states that where an international agreement sets out conditions for determining tax residency, those provisions apply for the purposes of that agreement. The tie-breakers in a typical treaty run in order: where is the permanent home, then where is the centre of vital interests, then where is the habitual abode, then nationality, and finally agreement between the two tax authorities.

This is the point at which a page like this one stops being useful and a qualified adviser in the other country becomes necessary. Whether you have ceased to be resident where you came from is a question about that country's law, and it is not a question the UAE answers.