Tax Residency Certificate in UAE

The UAE’s varied economy is attracting investment from all over the world. The UAE’s favorable tax climate is one of many factors attracting firms to the country. 

The UAE developed double taxation treaties with numerous nations across the world to ensure that taxes are not charged twice on the same taxpayer in two countries. Furthermore, the bulk of enterprises based in the UAE are exempt from income tax. The UAE currently has 137 double taxation treaties in force or pending.

Companies or individuals must hold a Tax Domicile Certificate (TDC), also known as a Tax Residency Certificate (TRC), in order to benefit from the UAE’s double taxation agreements.

What exactly is a Tax Resident Certificate (TRC)?

The Tax Residence Certificate (TRC) is a certificate provided by the UAE Federal Tax Authority (FTA) to a firm operating in the UAE to establish tax residency and benefit from double taxation avoidance agreements. The certificate, also known as a tax domicile certificate in the UAE, is for individuals residing in the UAE, organizations, or legal entities. 

Any company that has been operating in the UAE for at least a year on the mainland or in a Freezone is eligible for The Tax Residency Certificate. Offshore corporations, on the other hand, are disqualified and must get a tax exemption certificate instead of a Tax Residency Certificate. 

Individuals who have lived in the UAE for at least 183 days are also eligible for a Tax Residency Certificate. This is especially advantageous for persons whose home countries do not have a double taxation agreement with the UAE; to apply, individuals must hold a valid UAE resident visa for at least 183 days. 

Tax residency benefits in the UAE

• Separate UAE Tax Residency Certificates are available for individuals and corporations, allowing income to be covered at both the individual and corporate levels.
• As a resident of the UAE, you can avoid paying double taxes and benefit from tax incentives. 
• When establishing a firm in Dubai or Abu Dhabi, you have access to global markets. 

Why Do We Need a Tax Residence Certificate in the UAE? 

With a UAE tax residency certificate, you can benefit from Double Tax Avoidance Agreements (DTAAs) in other nations that have DTAA treaties with the UAE.  

• A document attesting to your status as a UAE tax resident.  

How to Obtain Tax Residency Certificate (TRC) in UAE? 

To qualify for the TRC as an individual, you must have lived in the United Arab Emirates for more than six months. There are numerous routes you can take to settle in the UAE, and Shuraa Tax can guide you through them all. Our corporate governance services may be of interest to you if your company has been around for more than a year and is successfully run out of the United Arab Emirates. In this case, you are also eligible for the Tax Residency Certificate.  

Steps needed to obtain a Tax Residency Certificate

• Register for an account on the website of the Federal Tax Authority (FTA).
• Fill out the application and attach the required documents in PDF or JPEG format.
• Make an online payment as soon as your application is accepted.  
• Certificate will be issued online.  
• That’s it, then!  
• You might not have a clear tax situation if you spend a significant amount of time abroad. Therefore, we always advise obtaining a Tax Residency Certificate in the UAE, if not permanently, then at least for the time frame in which you receive the majority of your income.  

Requirements for a company to get Tax Residency Certificate

• Trade License for the UAE that has been active for over a year (Mainland or Freezone)
• Copy of the company’s Memorandum of Association.
• Copy of a valid passport copy of shareholders and managers.
• Copy of each director’s, shareholder’s, or manager’s Emirates identification card.
• Audited Financial Statement for the requested Year 

• Six months Bank Statement from the requested Year 
• The UAE Federal Tax Authority will accept credit/debit Cards as payment 

Requirements for an individual to get Tax Domicile Certificate

• At least 183 days before the application, a copy of the applicant’s passport and current visa are both issued.  
• Copy of UAE Residence Visa Copy, Emirates ID copy and Passport Copy
• 6 months’ worth of personal UAE bank statements.
• An employment contract, a share certificate, or a salary certificate are examples of acceptable UAE proof of income.  
• Evidence of all entries and exits from the United Arab Emirates is provided in a report from the General Directorate of Residency and Foreign Affairs.  
• A certified lease that has been in force, in copy or as a title deed.  
• The UAE Federal Tax Authority will accept Debit/ credit Cards for payment   

Timeframe for UAE Tax Residency Certificate

• Pre-approval procedure: After filling out the application form and uploading all necessary documents, it will take the UAE Federal Tax Authority 4 to 5 working days to approve the application and confirm that all uploaded documents are accurate.
• Process for issuing certificates: 5 working days following approval and confirmation from the UAE Federal Tax Authority and payment of the application fees.
• Certificate validity: The Tax Residency Certificate / Tax Domicile Certificate is valid for one year, after which it may be renewed yearly with a new application.

Conclusion 

To maximize the benefits of the tax residency certificate in Dubai, effective tax planning utilizing a multidisciplinary approach supported by solid business acumen, accounting and finance structures, and current tax regulations is required.

Shuraa Tax Consultancy will help you put together the necessary paperwork for the UAE Tax Residency Certificate. Our tax accountants will offer business and individual clients’ advice on how to properly apply for a Tax Residence Certificate (TRC). Simply email us at info@shuraatax.com or give us a call on +971 508912062.