UAE Tax Question

LK_Dave

I’ve just been offered a job in the UAE, it’s a very good package with 4 week on 3 weeks off, including flights to and from Ireland. Salary will be paid in UAE. My question is about tax. I know that UAE is zero tax on income but what will the Irish Revenue’s view be on this? I currently submit a personal tax return annually here in Ireland as I have some agricultural and forestry enterprises here. And the fact that I’ll be home for almost half the year and therefore not really an non-resident. Do I have to declare these earnings - my guess is yes?

I realise that I’ll have to get some professional independent tax advice but does anybody have any insight from personal experience on this?

The Hill Billy

As your query has more to do with Irish Taxation I have moved it to the appropriate forum.

Moved from Living Abroad.

tHB

dbran

You will be resident in this year and also in next year under the 280 day rule which means you are taxed on your world wide income.

Regards


dbran

LK_Dave

dbran wrote: »

You will be resident in this year and also in next year under the 280 day rule which means you are taxed on your world wide income.

Thanks - I was thinking the same.
Ireland and the UAE have a double tax agreement signed but I'm trying to get my head around this 280 residency rule. I'll have a residence in UAE, I'll spend most of my time there. I won't have any residence in my name here - renting atm so will be giving that up. When I come home I'll stay at the brothers or the folks.
Guess I have a lot of reading to do http://www.revenue.ie/en/tax/it/leaflets/res1.html

dbran

It dosen't matter where you stay or what you do, if you stay with a friend, relative etc. If you set foot in the country for more then 30 days in the year then it will count as a residence day for the purpose of determining whether or not you are tax resident.

The tax treaty will determine which country has the primary taxing rights. If the tax rate is higher in Ireland then if you are tax resident in Ireland also they have the right to also tax with a credit for any tax suffered in UAE.

dbran

Marcusm

LK_Dave wrote: »

I’ve just been offered a job in the UAE, it’s a very good package with 4 week on 3 weeks off, including flights to and from Ireland. Salary will be paid in UAE. My question is about tax. I know that UAE is zero tax on income but what will the Irish Revenue’s view be on this? I currently submit a personal tax return annually here in Ireland as I have some agricultural and forestry enterprises here. And the fact that I’ll be home for almost half the year and therefore not really an non-resident. Do I have to declare these earnings - my guess is yes?

I realise that I’ll have to get some professional independent tax advice but does anybody have any insight from personal experience on this?

You need to get good professional advice from someone who can advise you based on what you want from a personal/family perspective and a financial one.

There is no income tax in the UAE and if you moved there on a multi year contract, it would, provide you limit your days spent in Ireland, mean that you would not be liable to Irish income tax. THis could be a substantial financial benefit and one you would need to balance against your family position.

The basic rule is >183 days in a calendar year in Ireland then Irish tax resident for that year. Over a 2 year period, more than 280 days in aggregate then still tax resident in Ireland. If you can spend more of your down weeks int he UAE or elsewhere than Ireland you may manage to escape both Irish and UAE tax (non existent) on your employment income from day 1 (split year treatment).

It needs to be carefully considered by a professional. Lots of people on FIFO (fly in fly out) employment have to manage it. It's generally easier if you arrange to have a number of significant non Irish holidays where your family can join you (incl some in NI perhaps) or if you stay in UAE or similar on your down time.

I have given you some guidance for you to discuss with your adviser.

Legend100

+1 to Marcusm's response OP - there is scope for "very big" savings for you if you manage it correctly.

Pay a tax adviser, even if it costs you a few hundred quid, it will be the best money you will ever spend!

LK_Dave

Thank you one and all for your valued advice. I will definitely be getting an appointment with a tax adviser – when I speak to such professionals I like to have some knowledge so I don’t get blown away by the terminology. No problem paying a couple hundred Euro or more if it saves me thousands.

Just doing simple maths in relation to the 180 day rule. I’ve worked out that I have 209 working days per year and 156 holiday days. I know I’ll probably get hammered this year as it is so late in the financial year but beginning the 1st Jan 2015 I could easily limit my days in Ireland to >140 and do the same the following year. Never intended to spend all my down time here anyway. As for showing a multi-year contract, not a problem it’s a 5 year with rolls and extensions.