Why a UAE Visa Isn’t Enough for Tax Protection

There is a common misconception that obtaining a UAE residence visa automatically makes you tax resident in the UAE. However, a visa gives you a legal right to live in the UAE whilst tax residence is a legal determination made under domestic tax law and, where relevant, under the terms of a double tax treaty. The two are entirely separate concepts and confusing them can potentially lead to serious planning mistakes.

Under UAE domestic tax regulations, an individual may be treated as tax resident if they meet certain criteria, including spending at least 90 days in the UAE within a 12-month period and satisfying additional conditions such as having a permanent place of residence or centre of interests in the UAE. This form of residence is primarily relevant for domestic administrative purposes – for example, complying with local tax rules, accessing local tax benefits, or obtaining a UAE Tax Residency Certificate for internal regulatory use.

However, when it comes to claiming protection under a double tax treaty, the threshold is generally higher. In practice, individuals usually need to demonstrate 183 days of physical presence in the UAE in a 12-month period to support treaty residence status. This distinction is crucial for those seeking to rely on UAE residence to mitigate tax exposure in another jurisdiction.

Even then, meeting the 183-day threshold in the UAE does not automatically mean you are no longer tax resident elsewhere. Each country applies its own domestic rules independently. Taking the UK as an example, the Statutory Residence Test can result in UK tax residence based on days spent in the UK and various connecting factors such as family, accommodation, and work ties. It is therefore entirely possible to be treated as tax resident in both the UAE and the UK in the same tax year.

When that happens, the relevant double tax treaty contains “tie-breaker” provisions to determine where you are treaty resident. If you have a permanent home available in both countries, the analysis moves to where your personal and economic relations are closer - your centre of vital interests. If that remains unclear, the treaty looks at your habitual abode.

Habitual abode is often misunderstood. It is not simply a matter of counting days and awarding residence to whichever country has the higher number. Tax authorities examine the pattern of your life over time to determine what is normal. Days present are important because they demonstrate that pattern, but they are not decisive on their own. In some cases, individuals can even be regarded as having a habitual abode in both countries if they regularly divide their time between them.

In dual residence situations, evidence becomes critical. Travel records, where you physically spend your nights, where you work, where your family lives, school enrolments, medical registrations, memberships and social connections all contribute to the overall picture. Authorities are looking at the substance of your everyday life –not simply the existence of a visa.

The key message is straightforward: a UAE visa does not in itself create tax residence. Proper analysis requires reviewing domestic residence rules in each relevant country, understanding treaty thresholds, and examining the factual pattern of your life. Without that analysis, assumptions about tax residence can potentially be both costly and incorrect.

‍How can Sanctuary help?

The reality is that holding a UAE visa and achieving genuine tax residency requires more than just a passport stamp. At Sanctuary, we specialise in the "substance" of residency, helping you move beyond the 183-day rule to navigate complex domestic laws and international tie-breaker provisions. Our expert team can audit your physical presence, assess your centre of vital interests, and help you compile the robust evidence needed to withstand cross-border scrutiny. With Sanctuary, you can stop making assumptions about your tax status and ensure your global footprint is protected by professional, evidence-based analysis.

Visit our Tax & Advisory service page to learn more about our tax & residency advisory, or contact us for a bespoke consultation via the contact form or email us at: hello@sanctuary.ae.