Tax Residency Certificate in the UAE

In today’s world, businesses don’t just happen within a single place. Businessmen spread their work in many countries. People (both entities and individuals) started facing a revised plan in tax payments when the Trade Residency Certificate came into law. However, to get rid of the DTAA- Double Taxation Avoidance Agreement, people should apply and hold a TRC- Tax residency Certificate from the UAE Government’s tax offices. The Finance Ministry of the country issues the Tax Residency Certificate or the tax domicile certificate. According to the 2012 amendment of the Income-tax act of 1961, non-residents of the country cannot receive any tax treaties until and unless the person gets the TRC. Indeed, if the TRC is not given, proof about the residence should be given. Certain rules are framed in order to avoid people’s misuse of the DTAA.

Here, the person claiming for any relief under the DTAA of other countries. In short, if a UAE goes abroad, the host country should allow tax exemptions for him/her. In order to avoid paying double taxes, TRC is helpful. For instance, a person who runs a business in UAE who is a resident of some other country need not pay double tax in the UAE and in the other country. Moreover,the International Tax Affairs Division (ITAD) helps to receive and process the documents. Those filed with any office other than ITAD are deemed not filed. However, the UAE has signed the DTAA with nearly 91 countries across the world.

Requirements:

For individuals:

  • A valid passport and visa
  • Bank statement for last 6 months
  • Certified tenancy contract with RERA attestation
  • Salary Certificate
  • Immigration certificate

For Corporate:

  • Trade license copy
  • Lease contract
  • Passport and visa of authorized signatory
  • Emirates ID of owner
  • The organizational structure of the company
  • Bank statements of the last 6 months
  • Audited financial statements

For legal entities:

  • Application from a legal entity
  • Copy of passport, Emirates ID
  • A valid license of trade, service or production
  • Memorandum of Association
  • Bank statement
  • The financial condition of the company (audit report)

Who all can obtain a tax domicile certificate?

  • Any company in Dubai
  • Employed individuals
  • Free zone companies

Who cannot apply for a tax domicile certificate?

  • Foreign company branch
  • Company in offshore
  • A non-employed individual

Procedure:

  • Create an account in the online portal
  • Fill the application to receive the Tax Residency Certificate UAE
  • Finally, payment is done once the application is processed.

Benefits of tax residency in the UAE:

  • Use DTAA between UAE and your home town country
  • If you have double paid the taxes, you can claim back the tax paid
  • Taxpayers, companies or individuals fairness is shown
  • It confirms the status of a person or a company in the Emirates
  • Any person who has a tax residency certificate except the real income tax certificate, the tax is zero.
  • Exchange of information happens
  • It helps the countries to have a peaceful and good relationship in trade
  • The tax residency certificate, during import-export, collects double taxes
  • International trade is fostered for a great extent

UAE government has set certain rules to receive the Tax Residency Certificate as follows:

  • The applicant must be a resident in UAE for 183 days. A letter should be produced as a proof of residency from the Immigration Authority
  • The applicant should possess a resident visa and the UAE (Emirates) ID
  • Any tenancy contract in UAE can be shown
  • Income proof like bank statements must be submitted
  • If a company needs to apply for Tax residency certificate (TRC), they should’ve been in UAE for at least a year

FAQs:

1.  What is a TRC or Tax Domicile Certificate?

The UAE finance ministry issues it to the applicants in order to avoid double taxes (TDAA)

2.  What is the duration to get the TRC?

It takes two weeks for the document processing and another two weeks for the issuance.

3.  In the UAE, what is the duration of validity?

In the UAE, the TRC expires in 1 year.

4.  Can a corporate entity apply for a Tax Residency Certificate?

Yes, any corporate company can apply for a Tax Residency Certificate.

5.  Can an individual apply a tax domicile certificate?

Yes, indeed, even the individuals can apply for the tax domicile certificate.

6.      Who issues the tax residency certificate?

The UAE finance ministry provides the tax residency certificate

Why KGRN?

  • In Dubai, we are a multi-purpose accounting firm connected all over the world.
  • Our expert and legal team will lead you throughout the process
  • No hidden charges
  • On-time delivery
  • We provide instant updates about the process and guide you throughout the process


Leave a Reply

WhatsApp chat