Day: December 23, 2025

Aurifer welcomes the opportunity to contribute to the “Public Consultation Document: Global Mobility of Individuals” released by the Organisation for Economic Co-operation and Development (hereinafter: “OECD”) on 26 November 2025 and open for public comments until 22 December 2025 (hereinafter: the “Public Consultation Document”).

In what follows, we have aimed at sharing our views, hoping that these will be helpful in the consultation process.

1. Data and Trends of Mobility of Individuals in and across the GCC Countries

We welcome the OECD’s “Public Consultation Document: Global Mobility of Individuals” as timely, addressing issues relevant for practice in the context of increased cross-border remote work. We agree with the Public Consultation that evolving work patterns are testing existing international tax rules based on traditional concepts such as physical presence. In our comments below, we will focus on the reality of individual mobility within GCC countries.

GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia (“KSA”), United Arab Emirates (“UAE”)) are among the top destinations globally for international migrants, with foreign workers making up a large share of the population and labour force.[1] GCC states often rank among the world’s highest shares of foreign-born residents. In parts of the GCC (e.g., Qatar and the UAE), foreign residents constitute around 80–90% of the total population.[2] The six GCC countries hosted 10.1% of all migrants worldwide in 2024, up from 5% in 1990. KSA alone accounted for 4.5% of all migrants worldwide (down from 5% in 2015), while 2.7% were recorded in the UAE.[3]

Intra-regional mobility of GCC nationals is also significant. Under article 8 of the 1981 Economic Agreement between GCC States, GCC citizens are legally entitled to freedom of movement, residence, and employment across member states (Bahrain, Kuwait, Oman, Qatar, KSA, and the UAE). This includes the same treatment as local citizens in economic activities and labour markets across the GCC. In practice, GCC nationals can enter, reside, seek employment, and start economic or professional activities in other GCC states without the standard visa or work permit restrictions that typically apply to non-nationals.[4] This is reminiscent of the 1957 Treaty of Rome which established the European Economic Community (the predecessor of the European Union) and incorporated the free movement of people.

According to recent figures, more than 36.5 million Gulf citizens travelled, lived, or worked freely across other GCC member states last year, taking advantage of unified transport and residency systems. This marks a sharp rise from just over 14 million in 2007, underscoring how regional

policies have transformed cross-border movement into a routine part of Gulf life.[5] KSA registered 8.8 million entries of GCC nationals into its territory – a 5.8% increase compared with 2023. Entries originated from across GCC states (e.g., Bahrain, Qatar, UAE, Kuwait, and Oman).[6]

This data indicates that the Gulf Cooperation Council (GCC) countries are progressing towards a more integrated common market from that perspective, with millions of citizens now enjoying enhanced mobility, improved access to jobs, and broader economic opportunities throughout the region.

 2. Tax Issues of Global Mobility of Individuals in GCC Countries

For the GCC countries (Bahrain, Kuwait, Oman, Qatar, KSA, UAE), the taxation of individuals differs significantly from that in OECD member jurisdictions, as GCC countries – as of December 2025 – have not yet introduced a personal income tax (PIT). Therefore, certain tax challenges for globally mobile individuals, as detailed in the Public Consultation, do not arise to the same extent as they do in jurisdictions with established PIT systems, such as most OECD members.

However, these issues remain relevant to GCC countries regarding corporate and international tax matters. Notably, individual mobility raises important questions about the interpretation and application of key concepts, including tax residence of natural persons and legal entities, the counting day tests, permanent establishment (PE), profit attribution, and transfer pricing.

Recent regional developments are illustrative. The UAE introduced a CIT effective June 1, 2023.[7] While this regime excludes income earned by natural persons from wages, personal investment income, and real estate investment income, cross-border mobility may raise corporate-level tax questions for employers and related parties, including whether activities in the UAE could create a taxable presence therein. More pertinently, the UAE’s CIT functions as a business tax, applying not only to companies and legal entities but also to individuals engaged in business activities, provided their annual revenue exceeds AED 1M (approximately, USD 272,000).[8]

The UAE plays arguably the most important role when it comes to mobility of HNWIs. It has developed multiple (administrative) residency by investment and merit programmes to attract foreign individuals. While the other GCC States may also have similar programmes in place, the UAE’s programme is much more successful. The administrative residency is regretfully by applicants often confounded with tax residency.

The Public Consultation is also relevant for the interpretation of tax treaties, particularly regarding the definition of residence and the allocation of taxing rights between Contracting States. This matters for GCC jurisdictions as well, insofar as they rely on treaty networks for cross-border

investment and labour mobility. By way of example, the UAE has concluded 137 double taxation agreements with major trading partners, reflecting the importance of tax treaties in its strategy.[9]

The OECD’s work on global mobility will gain even greater significance as Oman implements its planned 5% personal income tax (PIT) for individuals earning over 42,000 OMR (approximately USD 109,000) starting January 1, 2028. The announced features of the Omani PIT suggest a modern design, with income above specified thresholds taxed, and exceptions for income. Issues such as residence determination, source rules, and treaty interaction will become critical, particularly for mobile individuals and expatriates. The Executive Regulations, which will outline procedures, timelines, tax return forms, and other specific matters for the implementation of the PIT Law, are expected to be issued by June 30, 2026, within one year of the PIT Law’s publication in the Official Gazette.[10]

More generally, international guidance on global mobility of individuals will be vital for jurisdictions introducing PIT, particularly guidance that establishes an approach which promotes coherence among domestic tax rules, corporate concepts, and treaty interpretation. Early alignment with international principles may reduce uncertainty and support compliance.

In our view, the OECD’s work in this field should support these broad goals:

• alignment between personal income tax rules, corporate tax concepts, and treaty interpretation;
• proportionate approaches for short-term presence; and
• administrative certainty, as uncertainty often hinders legitimate cross-border mobility.

We believe that the Public Consultation offers a unique opportunity to develop flexible guidance for jurisdictions at different development stages, including GCC countries, where PIT is not yet in force or only planned, but CIT and international tax implications of global mobility of individuals are already relevant.

 

 3. PIT and Global Mobility of Individuals in GCC Countries

Global mobility of individuals – driven by remote work, frequent travel, and regional commuting – has exposed weaknesses in PIT systems that rely on assumptions of stable residence and physical presence. These weaknesses may cause double taxation, double non-taxation, and excessive compliance burdens for individuals and businesses, while also complicating relationships with social security, pension regulations, labour, and migration law. In a GCC context, for non-GCC nationals, social security and pension regulations play a reduced role, given that these are attached to the employer, and therefore contributions are due in the country of employment. They are in any case comparatively substantially lower than in OECD countries. As to GCC nationals, the contributions are generally due to the country of citizenship, regardless of where they are employed, under an arrangement agreed to as part of the GCC framework.

The UAE tax residence framework demonstrates how residence rules can be modernized to address these challenges in a highly mobile business environment. The UAE’s social and economic model centres on high mobility. As a global aviation hub, it hosts:

• regional commuters operating across multiple continents;
• senior executives with multinational responsibilities, remote employees working for foreign employers; and
• mobile professionals with fragmented physical presence across jurisdictions.

In KSA, the other major jurisdiction where our firm operates, this is less the case as it less of a regional hub though efforts have been made to establish an HQ programme with associated tax benefits, and it is increasingly connected. Qatar presents similar challenges but shows less dynamic than the UAE.

In this environment, relying solely and exclusively on a physical presence threshold would likely lead to puzzling residence outcomes, creating multiple residence claims or leaving individuals outside residence taxation.

The UAE addresses these realities through a robust tax-residence framework for frequent travellers and mobile professionals (though some of its treaties are only applicable to citizens). This robustness derives from the UAE’s adoption of a multi-layered tax residence test rather than reliance on a single criterion. Notably, since 2022, UAE tax residence may be established through alternatively:

• a 183-day physical presence test;
• a 90-day physical presence test, where the individual: holds a legal right to reside in the UAE, and maintains ties such as a permanent home, employment, or business activity;
• a non-day-count test, requiring that both the individual’s usual residence and centre of financial and personal interests are in the UAE.[11]

This layered structure is meant to target the reality of highly mobile individuals who may be present briefly but remain economically anchored in the UAE.

The UAE has also ensured that the definition of tax residence for domestic tax purposes aligns with common definitions of residence under tax treaties. Notably, the residence test based on usual residence and centre of interests mirrors to a certain extent the corresponding tie-breaker rules laid down in Article 4(2) of the OECD Model Tax Convention. This alignment reduces friction between domestic residence determinations and treaty outcomes, particularly for executives with ties to multiple jurisdictions.[12]

Another relevant feature of the definition of tax residence under UAE tax law is the recognition of exceptional circumstances. Notably, the UAE excludes involuntary presence in the UAE due

to emergencies, border closures, or illness from the day count. This is relevant in a global hub economy like the UAE, where travel disruptions can have unintended tax consequences.[13]

Finally, another strength to be highlighted is that the UAE tax-residence definition relies on objective criteria. The multi-layered tax residence test is built on verifiable factors – i.e., legal residence status, housing, employment, and business activity – rather than the taxpayer’s subjective intention, facilitating compliance for both taxpayers and tax authorities.[14]

Through these features, the UAE’s tax residence test achieves the following goals:

• it reduces dual residence and double taxation risks for executives and mobile employees;
• limits residence gaps for remote workers and frequent travellers;
• lowers compliance burdens for employers managing globally mobile workforces; and,
• functions as an ex ante dispute-prevention mechanism, reducing reliance on mutual agreement procedures (MAPs).

As a global hub characterised by frequent travel and highly mobile talent, the UAE demonstrates that multi-factor, treaty-aligned residence rules can accommodate modern business realities without increasing disputes or undermining tax base integrity.

The experiences of other GCC countries may also be relevant. In KSA, another major country where our firm operates, a 183-day counting test is applied. Under this test, an individual becomes a tax resident of KSA if they have been present in the Kingdom for at least 183 days. However, KSA legislation offers an alternative test, whereby an individual with a permanent domicile in KSA is considered a resident if they have been present in the country for at least 30 days during the tax year. A permanent domicile is deemed to exist if a place of abode is made available to the taxpayer by any means (ownership, lease, etc.) for at least one year.[15]

In Qatar, where our firm also practices, domestic tax law defines an individual as a resident if they either i) have a permanent home in the State of Qatar, ii) have resided in the State of Qatar consecutively or intermittently for more than 183 days a year, or iii) hold Qatari nationality. Consequently, any individual holding Qatari nationality is considered a ‘resident’ in Qatar for tax purposes, regardless of their place of residence.[16]

The experience with determining tax residence for individuals in GCC countries may offer a relevant reference point for the OECD as it rethinks personal income taxation in an increasingly mobile world. More in detail, the UAE experience suggests that effective residence design in a mobility-driven economy should:

• move beyond 183-day tests;
• combine reduced physical presence thresholds with substantive legal and economic connections;
• embed as much as possible treaty tie-breaker concepts into domestic law;
• and codify exceptional-circumstance exclusions.

4. CIT and Global Mobility of Individuals in GCC Countries

Global mobility of directors and senior management, along with virtual and hybrid meetings, has placed significant pressure on traditional approaches to determining the place of effective management of companies and other legal entities (POEM). Corporate tax rules were developed under the assumption that key management decisions occur in a single physical location, which no longer reflects today’s business reality.

The UAE CIT guidance on POEM demonstrates how existing concepts can be applied coherently in virtual decision-making.[17] The UAE is a global aviation and business hub, characterized by frequent travel and a distributed governance structure. In practice, multinational enterprises (MNEs) operating in or through the UAE commonly have:

• boards whose members are rarely in the same jurisdiction;
• directors and executives who join meetings virtually from different countries;
• decision-making conducted via videoconferences, written resolutions or email exchanges; and,
• meetings organized in the UAE for logistical convenience rather than substantive management.

In such cases, focusing mechanically on formal board meeting locations risks producing POEM outcomes disconnected from where decisions are actually taken. The UAE tax framework, as a coherent response, addresses the challenges of virtual governance and remote decision-making by implementing a series of guidelines.[18]

First, the UAE domestic tax law acknowledges that board and management meetings may be held virtually, in whole or in part. Videoconferencing technology does not prevent decisions from being regarded as effective management decisions. The UAE Federal Tax Authority (FTA) guidance in this regard makes clear that the digital platform or hosting location is irrelevant for POEM purposes, and virtual meetings should not be treated differently from physical meetings due to format. This framework ensures modern governance practices are accommodated without altering the POEM concept.[19]

For virtual meetings, the UAE FTA guidance also shifts attention from where a meeting is convened to where decision-makers are physically located when decisions are made. This approach recognises that management decisions are, in general, taken where directors or executives exercise their authority, and the place of effective management follows the decision-makers, not the location in meeting records. This clarification is important in global hub

economies like the UAE, where meetings may be organised in one location while participants are geographically dispersed.[20]

The UAE FTA guidance further emphasises that POEM should be assessed on the basis of overall management patterns rather than isolated events. For virtual meetings, this includes:

• whether strategic decisions are consistently taken by individuals in a particular jurisdiction;
• the role of written resolutions and electronic approvals;
• whether meetings involve genuine deliberation or formal approval of decisions made elsewhere; and,
• whether authority is meaningfully exercised or delegated.[21]

This substance-based analysis prevents POEM outcomes driven by legal formalities that could be misleading or purposely tilted.

Another distinct element of the UAE approach to the POEM test is that virtual meetings may be used during temporary circumstances, such as travel disruptions that affect directors’ locations. In such cases, temporary changes in participant locations should not alter POEM outcomes. This reduces the risk of short-term disruptions that could lead to unintended consequences for residents.[22]

By focusing on observable factors – such as decision-makers’ physical location during meetings, documented processes and consistent decision patterns – the UAE approach provides administrable criteria for virtual meetings without relying on subjective intent. This enhances certainty for taxpayers and authorities in assessing POEM in a virtual environment.

Uncertainty around virtual meetings can expose businesses to unintended shifts in CIT residence, dual-residence claims under domestic law, and increased reliance on MAPs embedded in tax treaties. By clarifying the treatment of virtual meetings for POEM purposes, the UAE guidance serves as a dispute-prevention mechanism, reducing residence disputes arising from modern governance practices. The UAE’s guidance has been particularly helpful when it comes to addressing complexities associated with meeting the requirements under KSA’s HQ programme.

The UAE’s approach to virtual meetings, based on decision-makers’ physical presence and governance patterns, offers a reference point for the OECD in considering how residence rules operate in a mobile, digitally connected business environment.

More in detail, the UAE experience suggests that effective residence design in a mobility-driven economy should:

• explicitly recognise virtual and hybrid meetings as normal corporate decision-making;
• focus on decision-makers’ physical location when decisions are taken, rather than formal meeting locations;
• assess patterns and substance of decision-making, not isolated events; and,
• consider temporary circumstances affecting the cross-border mobility of individuals.

As to KSA and Qatar, guidance as to the interpretation of ZATCA, the Saudi tax authority, or the GTA, the Qatari tax authority, of the abovementioned concept is absent to date. That is particularly painful in a Qatari context, outside of the QFC. The authority competent for taxes in the QFC in its guidance on the place of effective management refers for its interpretation amongst others to OECD Guidance.[23]

In conclusion, we consider that the experience of GCC jurisdictions demonstrates that traditional, presence-based tax concepts require careful adaptation in an environment characterised by high individual mobility, remote work, and virtual governance. Multi-factor residence tests, treaty-aligned concepts, and substance-based approaches to corporate residence can provide administrable and dispute-preventive solutions without undermining tax base integrity. We believe that these experiences may offer useful reference points for the OECD’s work on global mobility of individuals, particularly for jurisdictions seeking to modernise their frameworks or introduce personal income taxation in the future. We would be pleased to engage further with the OECD and to provide any additional clarification that may be helpful.

References:

[1] International Labour Office (ILO), Labour Migration, https://www.ilo.org/regions-and-countries/ilo-arab-states/areas-work/labour-migration.

[2] Gulf Labour Markets and Migration (GLMM), GCC Total Population and Percentage of National and Non-Nationals in GCC Countries (National Statistics – mid-2022), https://gulfmigration.grc.net/gcc-total-population-and-percentage-of-nationals-and-non-nationals-in-gcc-countries-national-statistics-mid-2022/. 

[3] GLMM, National and Foreign Populations in GCC Countries, https://gulfmigration.grc.net/wp-content/uploads/2025/02/Francoise-De-Bel-Air-Factsheet-No.-13-GCC-Populations-2025-02-27.pdf.

[4] Later comprehensively revised by the 2001 GCC Economic Agreement Between the GCC States – see article 3 for the equivalent article.

[5] Zawya, Gulf Common Market Expands Opportunities for GCC Nationals, 19 September 2025, https://www.zawya.com/en/economy/gcc/gulf-common-market-expands-opportunities-for-gcc-nationals-sjjxx5pm.

[6] SA: General Authority for Statistics, Gulf Common Market in the Gulf Cooperation Council (GCC), https://gccstat.org/en/statistic/publications/indicator.

[7] UAE: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses [UAE Corporate Tax Law].

[8] UAE: Cabinet Decision No. 49 of 2023 Issued 8 May 2023 – (Effective from 1 Jun 2023). See also UAE Federal Tax Authority (FTA) Guide Corporate Tax Guide | Taxation of natural persons under the Corporate Tax Law | CTGTNP1 – November 2023.

[9] UAE: Ministry of Finance (MoF), Double Taxation Agreements (DTAs), https://mof.gov.ae/en/public-finance/international-relations/double-taxation-agreements/.

[10] OMN: Royal Decree No. 56 of 22 June 2025, published in the Official Gazette on 30 June 2025.

[11] UAE: Cabinet Decision No. 85 of 2022 – Issued 2 Sept 2022 (Effective 1 Mar 2023); Ministerial Decision No. 27 of 2023 – Issued 22 Feb 2023 (Effective 1 March 2023); Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1.   

[12] UAE: Ministerial Decision No. 27 of 2023 – Issued 22 Feb 2023 (Effective 1 March 2023), article 2.

[13] UAE: Ministerial Decision No. 27 of 2023 – Issued 22 Feb 2023 (Effective 1 March 2023), article 4.

[14] UAE: Ministerial Decision No. 27 of 2023 – Issued 22 Feb 2023 (Effective 1 March 2023), articles 5 and 6.

[15] KSA: Royal Decree No. M/1 of 6 March 2004 (Income Tax Law), Article 3.

[16] QAT: Law No. (11) of 2022 Amending Several Provisions of Income Tax Law Promulgated by Law No. (24) of 2018, article 1.

[17] UAE: Article 11(3)(b) of the UAE Corporate Tax Law. 

[18] UAE: Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1.   

[19] UAE: Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1, paragraph 4.1.6.1.

[20] UAE: Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1, paragraph 4.1.6.1.

[21] UAE: Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1, paragraph 4.1.6.

[22] UAE: Federal Tax Authority (FTA), Tax Procedures Guide | Tax Resident and Tax Residency Certificate | TPGTR1, paragraph 4.1.6.

[23] QAT: QFC Tax Manual, sections 2060 and 2080, pages 44 and following. The QFC also refers to guidance of the South African Revenue Service and a UK ruling.