Tax Residency Certificate in the UAE is also recognized as the "Tax Domicile Certificate". It is issued by the Federal Tax Authority (FTA) in the UAE. Authorities and banks in the UAE and others outside find the UAE Tax Residence Certificates to be the adequate proof of tax residency in the UAE. You will benefit from the attractive market climate and preferential tax treatment under the tax residency status at the UAE.
Note - Earlier the issuance of Tax Residency Certificate (TRC) in the UAE was governed by the Ministry of Finance (MoF). As of 14th November 2020, the Federal Tax Authority (FTA) has begun receiving applications for the issuance of TRC via its e-services.
The present business world claims that company operations are conducted on a global platform. Cross-cultural trading practices are booming significantly. This enhances trade ties among nations but, at the same time, it faces a problem when it gets stuck in the tax webbing. Now the business entities are facing the issue of double taxation during the import-export process at this stage. The idea of overcoming this challenge has given rise to a tax residence certificate. Obtaining this credential is useful for both individuals and business organizations. The UAE Government has begun issuing this certificate for business purposes to take advantage of the Double Tax Treaty (DTT) and turn the hazard into a business opportunity. Let's understand what the double tax treaty actually entails before we move into the procedures and the eligibility requirements.
Double Tax Treaty (DTT)
A Double Tax Treaty is an arrangement that is negotiated between two countries to prevent the tax portion they need to pay when carrying on business activities during the import-export process. Many countries around the world have signed this deal with their business countries to escape a variety of taxes such as an import-export levy, income tax, inheritance tax, value-added tax, and so on. So we may find the certificate of domicile or tax residence certificate as a double tax avoidance agreement (DTAA).
Eligibility Criteria For TRC in Dubai
To take advantage of the double tax avoidance deals signed between the international jurisdictions and the UAE. These are the conditions for receiving a Tax Residence Certificate in the UAE.
- A company operating in UAE mainland
- Free Zone Company
- An individual investor/business owner
- An employed individual
- Branch of a foreign company
- Offshore company
- A non-employed individual (with a spouse visa)
Steps Involved to Obtain a Tax Residency Certificate in UAE
Once you have checked and verified that you meet the requirements that are needed to be fulfilled to ensure that you can indeed obtain a Tax Residency Certificate.
1. Fill the Application
You can go ahead and visit the Federal Tax Authority's portal. This is where you can find the application for the Tax Residency Certificate. It needs to be filled precisely with the correct information about you or your company. Along with the application, the website might ask for additional documents to support your application. This will be reviewed by the FTA and will be approved by them as well.
2. Make the Payment
Payment will not be made on the same day that you pass your request for Tax Residency Certificate. The applicant will only pay fees once the FTA has approved it. It then can be paid to the online payment portal.
3. Collect the Certificate
The individual who has applied for the tax domicile certificate can collect it from the Federal Tax Authority. In the same way, it can also be sent by the FTA through a courier that the applicant has given to the authority.
It should be noted that since the extensive review is done for each application, the whole process can take 2-4 weeks. You can submit the certificate 6 months after you become a resident of the UAE (obtain your residency visa). As for businesses – it is possible to implement in 12 months. It takes about one to two months to receive it from the date of the submission for all the papers. The certificate is valid for one year.
Documents Needed to Acquire a Certificate of Tax Residence
For Physical Persons Who Work at the UAE
- Application form.
- Passport copy, Emirates ID and residency visa
- Copy of the last six months' rental contract or utilities bill (to validate the reality of residence)
- Recent bank statement (the previous six months)
- certificate from the General Directorate for International Affairs and Residency showing the number of days a person spends in the UAE (must be at least six months)
- Documentation stating the fee payment (service costs 2000 dirhams)
For Specific Legal Organizations
- Application form from a legal body (signed by the director)
- Passport copy, Emirates ID and the director's residency permit
- Valid license (trade, operation, development or other forms of licence)
- MOA (Memorandum of Association)
- Lease arrangement for office, warehouse or other property, or land plot
- Latest bank statement (the last six months)
- Audit Report on the company's financial position (Copy)
- Documents verifying fee payment (the service costs 10,000 dirhams)
For Individuals – Real Estate Owners
- Residency visa
- Bank statement certifying the presence of a UAE bank account
- Proof of real-estate ownership
- Utility bill slips
Commitbiz is rendering a wide range of fiduciary and business services to our clientele. We are one of the leading business consultants in UAE for fast and reliable corporate services and helps investors in obtaining a Tax residency Certificate. If you want to start your business in Dubai, our dedicated advisors will be happy to support you on this matter. Feel free to contact us if you have any further inquiries.