Dubai's new remote-working visa offers Brits who relocate opportunity to keep entire salary
Dubai is seeking to attract foreigners with a remote-working visa that would allow them to pay no tax on their salaries while enjoying life in the sun.
The city’s official media office announced the launch of a one-year programme that would allow international employees to keep their job and take advantage of the United Arab Emirates’ zero income tax policy.
Under the current regulations, foreigners cannot move to the UAE without a job offer from a UAE-based employer, with workplaces responsible for providing residence visas.
The initiative was unveiled alongside a social media campaign, featuring a video of an ex-pat being served a meal in front of the towering Burj Al Arab hotel while on a video call to his boss.
Remote working meanwhile has boomed across the world, with a quarter of the British population working exclusively from home.
However, tax experts said it would not be simple for any Brits to take advantage of the scheme, which requires applicants to earn a salary of $5,000 per month.
The scheme is open to all nationalities and 98 countries, including the UK, have double taxation agreements with the UAE that mean workers will not be simultaneously taxed in both countries.
British employees do not have to pay tax in the UK when they work abroad so long as they are gone for an entire tax year.
Steve Asher, of accountants Moore Kingston Smith, said ‘split year’ tax rules may cause issues for the UK employer in terms of payroll administrations.
David Daly, partner at the UAE-based Gulf Tax Accounting Group, said any British residents wanting to earn a tax-free salary would first need to resign from their role, preferably in March, the end of a tax year, and tie up their tax obligations in the UK using a P45 form. They would then fill out a P85 form to declare themselves a non-resident of the UK for tax purposes.
Then the would-be Dubai resident could export their services internationally, even, for example, to the company they’d just resigned from.
“The specific months noted ensure little to no time is spent in a tax year in the UK. Above a specific time threshold, an individual would still be considered UK tax resident and foreign earnings would be subject to UK tax, allowing for that paid in the new jurisdiction,” Mr Daly said.
While the scheme was promoted in Dubai, it has not yet been implemented by the General Directorate of Residency and Foreigner Affairs.