This is a more widespread scenario than many people think, throughout the Gulf. An American citizen who married an Emirati and lived in Dubai or Abu Dhabi. A child born in the United States while his/her father or mother is studying in graduate school, and who is not only born and raised in Sharjah or Al Ain, but now exercises his/her profession, pays his/her bills, and lives entirely in an Emirati context, is no longer considered American. A child born in the United States during his/her father’s or mother’s graduate study, who is fully born and raised in Sharjah or Al Ain, and who is now working, paying his/her bills, and living entirely in an Emirati context, is no longer American. A person with two nationalities who has never truly felt American in any substantial sense of the word.

No matter how weak their bond with the United States may appear to be, all of them have a legal responsibility to the IRS.

The American Spouse in an Emirati Household

The US tax obligations continue when you marry a non-U.S. citizen. If anything, it is something that most couples only find out about a few years in.

A resident of the UAE living in his family’s city in the UAE, who raises children there and whose children attend UAE schools, who speaks Arabic at home — she is still required to complete a US federal tax return each year. Her husband is not. Her children, depending on their citizenship at birth, may be or may not be. She is, however, and even though the family is behaving as if it is all Emirati culture and Emirati finances, the IRS filing still exists in the background.

In practice, a joint bank account in the UAE where she holds a share in the account with her husband, say at Emirates NBD or First Abu Dhabi Bank, could be considered to be partially reportable in the US if she contributes over $10,000 to the total foreign account. If rental income or gains are generated in a jointly owned property in Dubai, it may have implications in the US for the tax reporting of the property. And if she works (in one of Dubai’s international schools, a healthcare facility, or a job in DIFC or Abu Dhabi Global Market), that income is reported to the IRS, even if it is not taxable in the UAE.

The IRS says that US citizens who live abroad are required to file federal returns every year on earnings from around the world, using the same tax filing thresholds that are used for people living in the United States. This remains the case even if you marry a foreign national or live in a foreign country.

The Person Born American But Raised Emirati

This is the one angle that is most likely to elicit a true surprise. A person who was born in the United States, returned to the UAE as a baby, and has lived there since.

They attended school in Dubai/Abu Dhabi. They studied at a local or regional university. They began to work, develop a career, and open accounts at local banks, and maybe even entered a property in one of Dubai’s freehold areas. They are completely defined by the lifestyle in the Emirates. The American passport (if they have one) is tucked away in a drawer since their childhood.

The IRS doesn’t have any record of the passport in the drawer. However, the responsibility remains. US citizenship by birth is obtained “by descent” (by the child’s birth), and the person must file US federal tax returns each year, disclose foreign financial accounts, and report any worldwide income, unless the person willfully renounces citizenship.

The compliance gap for this group is typically not one or two years. It may be a full career of a grownup. When it comes — often at the heels of a bank letter, a visa complication, or a conversation with a more informed peer — it can come as a shock, such an event that it is truly difficult to sit with.

What the UAE Adds to the Picture

In the UAE, there is no personal income tax, which dictates a particular approach to tax filing. In most cases, tax advice for expats is based on an assumption that they will be paying income tax in another jurisdiction within the country, which will then offset the tax bill in the United States. However, this idea is not correct in the UAE: there is no local income tax to offset anywhere.

For most Americans in the UAE, the key to avoiding US taxes is instead the Foreign Earned Income Exclusion, which offers qualifying Americans abroad a tax exemption of up to $130,000 for 2025 on foreign-earned income. It is the exclusion that often means no US taxes for a person who earns a typical UAE salary.

What people are stumped by is that reporting requirements are not linked to the payment of tax. As long as total balances in all local UAE bank accounts, investment accounts, and savings accounts are greater than $10,000 at any time during the year, they are subject to disclosure under the FBAR. In the UAE, where there are several accounts- one as an American and the other as an Emirati, and maybe even a savings account- these thresholds are crossed without the American realizing what’s happening.

What the Compliance Picture Actually Looks Like

The upside—usually lost in the fear—is that there is a clearly marked roadmap for the IRS for just these scenarios.

The Streamlined Foreign Offshore Procedures are for American citizens who live overseas but have simply not filed what they should have; that is, they did not intentionally avoid filing, they just didn’t know. The three-year delinquent return program and the six-year FBAR disclosure program generally offer reduced or even no penalties. Documenting the non-willful case is relatively easy for individuals who were born American but raised completely in the UAE: you didn’t have to actively seek it out, there wasn’t much tax infrastructure around you, and no employer or institution would have made you aware of the requirement.

 

The American spouse in an Emirati home is more likely to be dealing with a compliance issue of the past, rather than a huge problem. Most of these people are responsible, organised individuals who were never told that this was something that they needed to do: not by their husband’s family, not by the bank that gave them their account, not by their UAE employer’s HR department.

All the details of what is involved: the forms, the deadlines, the exclusion mechanism, and the catch-up process, peculiar to Americans in the Emirates, are explained in the  UAE expat tax guide, which is a very useful reference before trying to do it on your own.

The Question of Renunciation

At some point in these circumstances, the possibility of renunciation comes up, especially for those born in the U.S., who were raised completely in the UAE and have never thought of going back to the U.S. at all. The calculation begins to change if there is no practical application for the passport and the requirement to submit it and file accounts on an annual basis is perpetual.

Before it becomes the obvious solution, it’s important to get to know what renunciation is. It involves complete compliance with tax regulations over the last five years, appointment at a US embassy or consulate, a $2,350 fee, and — if wealth or income requirements are met — an exit tax on unrealized gains. Is permanent and cannot be undone.

Most people from mixed families (Emirati-American) tend to go the other way. After the compliance situation has been corrected and the continuous annual requirement is properly addressed, the effort required is significantly less than it is often thought to be. With a good structure and a person familiar with the UAE landscape, it’s a one-off annual procedure and shouldn’t be a burden.

People Also Ask

Does an American married to an Emirati national have to file US taxes?

Yes. There is no distinction if the other spouse is a U.S. citizen or where they reside. The responsibility remains until the person loses his U.S. citizenship.

What if an American was born in the US but has lived their entire life in the UAE?

They still have IRS filing requirements and are still considered to be a US citizen. There are special regulations for people in this position called the Streamlined Foreign Offshore Procedures, which permit the filing of unfiled returns without paying increased or any penalties.

Do joint UAE bank accounts with an Emirati spouse need to be reported to the IRS?

An American citizen with at least $10,000 in foreign financial accounts at any time during the year must file an FBAR, even if no tax is due.

Does the UAE’s tax-free status mean Americans there owe nothing to the IRS?

Not necessarily. The filing requirement does not depend on local tax status. While the Foreign Earned Income Exclusion may provide a significant tax benefit, the requirement to file and report foreign accounts does not go away.

Is renouncing US citizenship a realistic option for Americans raised in the UAE?

Legally, it can be done, but with an added expense, permanence, and full tax compliance. This is the easier path to take in the long-term for most people, as they need to handle the obligation at all times.

Frequently Asked Questions

What is the Foreign Earned Income Exclusion and how does it apply in the UAE?

It lets qualified US citizens living overseas exclude up to $130,000 of foreign earned income from U.S. tax each year. The UAE does not have an income tax, and as such, this is the main option to limit liability in the United States (not the Foreign Tax Credit, which can only be used to offset already paid income tax).

What happens if I’ve been living in the UAE for years and never filed?

The IRS Streamlined Foreign Offshore Procedures allow non-willful non-filers to also submit missing returns, including three years of income and six years of FBARs, at a reduced or no penalty. The earlier the better.

Does the UAE have a tax treaty with the United States?

No. Compared to many other expat destinations, there’s less built-in clarity with the absence of a bilateral tax treaty, so it’s important to have expert advice here.

Can children born in the UAE to an American parent hold US citizenship?

 It is possible, assuming citizenship was passed on or registered as such. Children born outside of the US to a US citizen parent may have US filing requirements if they are properly documented.

The situation is far easier for anyone who has crossed the line of American citizenship and yet has grown up and lived within the Emirates, whether through marriage or rearing or both. The gap between compliance and non-compliance can be bridged. The annual requirement can be planned. Once the paperwork is put aside around the passport, it lies quite a bit more restfully in the drawer than it does when it’s not.

Read Also:Hafilat Card Balance Check