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The United Arab Emirates is signaling a softer approach for expats worried about losing their tax residency, as the Iran conflict continues to disrupt travel and business in the Gulf. According to a report in the Financial Times today, authorities are reportedly ready to allow some residents to spend more time abroad without jeopardizing their lucrative zero-income-tax status.
Typically, expats must spend at least 183 days a year in the UAE, or 90 if they have strong ties like a home or job, to qualify as tax residents. But the UAE’s Federal Tax Authority plans to consider each case individually for people who left the country due to the conflict. Officials are also weighing “force majeure” circumstances, such as travel disruptions and infrastructure damage, when assessing residency.
For Dubai, which has built its reputation as a safe, tax-friendly hub for wealthy individuals, keeping these residents is a top priority. “It’s really important for its economy and image to retain these expats,” said Elsa Littlewood, a tax expert at BDO. The city’s financial district has already seen some residents leave temporarily, and cancelled flights and intermittent airspace closures have made timely returns difficult.
The UAE move provides relief for expats who might otherwise face big tax bills at home, especially in the UK, while encouraging them to maintain their ties to Dubai’s booming financial sector.
*Source: Financial Times
