August 1, 2023Dated: | ByManish Kumar Manish Kumar | Remote work arrangements can have tax implications for employees and employers in the UAE. Here are some key points to consider: Employers who support remote working arrangements for their employees will inevitably face associated tax and immigration impacts on their employees. The UAE does not impose income tax on its residents, making it an attractive destination for remote workers. Residents of other countries wanting to earn a tax-free salary in the UAE would need to declare themselves a non-resident of their home country first, which isn’t possible while holding a full-time job there. The matter of double taxation then depends on tax agreements between each country. Nearly 140 countries have reciprocal taxation agreements with the UAE, to ensure individuals and businesses are only taxed once. A non-resident in the UAE who is employed by a non-UAE entity would still be taxed on their income in the state of their residence Remote workers and employers should consider tax implications before taking the plunge. Some tax considerations include the location where work is performed, individual, employer, and corporate tax risks, and double taxation. When crossing borders while remote working, individuals will be liable for tax within the country where they are situated when they earned an income from services, such as employment income. This can make it challenging for individuals to submit their personal income tax returns due to their freedom of movement, even though remote work makes them able to be more mobile than ever before. In conclusion, remote work arrangements in the UAE can have tax implications for both employees and employers. It is important to consider different factors before deciding to implement remote work arrangements for employees, including the location where work is performed, individual, employer, corporate tax risks and double taxation. It is important to note that obtaining a residency permit in the UAE can be a complex process, and it is recommended to seek professional advice before proceeding. Book a consultation with Flying Colour Tax Consultant now and get a one stop solution for all your Accounting, Bookkeeping, Tax, Compliance and Auditing requirements.