Tax Residency Certificate in Dubai

Taxation in the United Arab Emirates

In an era of globalization, businesses are no longer restricted to a single geographical territory and are spread across the globe. As total income is contributed by different countries, each country wishes to tax the global income of its residents and the profits earned on its land. In order to curb double taxation and ensure that the business owners are not paying tax for the same income twice, countries like UAE have entered into Double Tax Avoidance Agreement (DTAA). Once DTAA is signed between two countries, it mandates tax authority to produce a tax residence certificate, which helps investors, individual residents claim the treaty benefits.

Double Tax Avoidance Agreement (DTAA)

UAE's Double Taxation Treaty (DTT) or DTAA is a bilateral agreement that preserves and upholds the interests of foreign investors and companies coming from other taxable jurisdictions, and investing in UAE. Any foreign company or national already paying taxes abroad for the profits earned in his/her business can mitigate any potential tax burden in the UAE as a result of this treaty. Investing in UAE is 100% tax-free, and the government does not impose any taxes through DTT on the business owners planning to set up their business in UAE.

Not just the Companies, but individuals who are fiscal resident in the UAE for more than 180 days and can provide the documents requested by the Federal Tax Authority (FTA) are eligible to use the advantages of the treaty.

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.

UAE has signed Double Taxation Avoidance Agreement or Double Taxation Treaty (DTT) with the following countries:

Albania Algeria Andorra Argentia
Armenia Austria Azerbaijan Bangladesh
Barbados Belarus Belgium Belize
Bosnia and Herzegovina Brunei Bulgaria Canada
China Comoros Croatia Cyprus
Czech Republic Egypt Estonia Ethiopia
Fiji Finland France Georgia
Germany Guinea Hellenic Republic Hongkong
Hungary India Indonesia Ireland
Italy Japan Jordan Kazakhstan
Kenya Korea Kyrgyzstan Latvia
Lebanon Lithuania Luxembourg Macedonia
Malaysia Maldives Malta Mauritius
Mexican States Montenegro Morocco Mozambique
Netherlands New Zealand Pakistan Panama
Philippines Poland Portugal Republic of Moldova
Romania Russia Senegal Serbia
Seychelles Singapore Slovak Slovenia
South Africa Spain Sri Lanka Sudan
Switzerland Syria Tajikistan Thailand
The Republic of Paraguay Tunisia Turkey Turkmenistan
Ukraine United Kingdom Uruguay Uzbekistan
Venezuela Vietnam    

How to Get a Tax Residency Certificate in Dubai/Abu Dhabi, UAE

Tax Residency Certificate in UAE is also known as “Tax Domicile Certificate”. It is issued by the Federal Tax Authority (FTA) the governing body, to take advantage of the double taxation avoidance agreements signed between the foreign jurisdictions and the UAE. The FTA, issues Commercial Activities Certificate to enable applicants to refund the VAT paid in advance outside the UAE, whether or not DTAAs are applicable.

There are certain criteria to obtain Tax Residence Certificate in UAE, these are:

Eligibility for Tax Residence Certificate in Dubai

Eligible

  • A company operating in UAE mainland
  • Free zone company
  • An individual investor/business owner
  • An employed individual

Not Eligible

  • Branch of a foreign company
  • Offshore company
  • A non-employed individual (with a spouse visa)

Requirements to Avail Tax Residence Certificate

For Companies

  • Copy of a valid trade license copy
  • Copy of a valid lease contract or tenancy contract
  • Copy of the passport and residence visa of the authorized signatory (Manager/Director/Owner)
  • Copy of Emirates ID for the authorized signatory (Manager/Director/Owner)
  • Certified bank statement of an AED account for the last 6 months
  • Audited financial statement

Individuals

  • A valid copy of passport and visa
  • Bank statement for the last 6 months
  • Certified tenancy contract with Ejari (RERA) attestation/title deed
  • Salary certificate
  • Immigration (entry and exit) report of residency

Validity

Corporate/Individual

The validity of a Tax Residence certificate is for 1 year.

Note: Dates can be chosen based on your requirement.

How Long Does the Process Take?

The process of issuing a tax residency certificate takes approximately 1 week to approve the application.

Obtaining TRC in UAE through Our Hassle-free Service | Commitbiz

Commitbiz has vast experience in offering professional tax planning and structuring services for international clients and also helps entrepreneurs and firms in starting a business in Dubai through company registration, incorporation, and legal consulting services... We can help you with the following:

  • Suggesting the right investment structure that adds value to your business
  • Incorporating ideal tax structure for your business (setting up offshore companies, trusts, and foundations, international business companies, hybrid entities, etc.) in any part of the UAE
  • Using the right jurisdiction and double taxation agreements to optimize your taxes and reduce withholding taxes on income, inheritance, capital gains, etc.
  • Processing all statutory filings
  • Meeting all regulatory tax requirements

If you need any help with tax residency certificate, feel free to contact us. We'll be glad to assist you.