Tax Residency Certificate
The UAE has transitioned itself into a broad economy that attracts investment from all over the world in a relatively short amount of time. They’ve earned a reputation as a worldwide financial hub that embraces cutting-edge technology, as well as becoming a popular tourist location and global financial hub. The UAE’s generous tax climate is one of the numerous advantages that lure firms to the country. The great majority of enterprises that have their headquarters in the UAE are tax-free. Acquiring a tax residency certificate in UAE as part of the Double Taxation Avoidance Agreements (DTAA) guarantees that the same taxpayer is not taxed twice in two different nations.
What is a Tax Residency Certificate?
Tax residency certificate, also known as Tax domicile certificate, is issued by Federal Tax Authority as per the provisions of avoidance of double taxation agreements. The certificate is valid for a year and is issued to individuals as well as companies. Companies or individuals must have a Tax Residency Certificate (TRC), in order to take advantage of the UAE’s double taxation avoidance agreements.
Eligibility for Tax Residency Certificate
People who live in the UAE and own mainland or free zone businesses are eligible to apply for a Tax Residency Certificate. Since offshore businesses may not have a physical presence in the UAE, they could be ineligible to request a tax residency certificate.
Tax Residency Certificate Objectives
- To prove that the applicant is a resident of UAE
- To avoid paying taxes in two countries
- Ease the process of cross-border trade and investment flows
- Encourage the development goals of UAE
- Economic diversification
Documents Required
Tax Residency Certificate for Individuals
A person applying for the Tax residency certificate in UAE(TRC) should have stayed in the UAE for at least 180 days; non-residents cannot apply.
- A copy of the passport and valid permit of residence
- A copy of the ID card
- A certified copy of the (residential) lease agreement
- Validated 6-month bank statement from a local bank
- Salary certificate
- A report from the General Directorate of Residency and Foreigners Affairs specifying the duration of stay
- Tax forms (if any) from the country where the certificate needs to be submitted
Tax Residency Certificate for Company
If a company needs to apply for Tax residency certificate (TRC), then they should have functioned in the UAE for minimum one year.
- A copy of the trade license and partners’ attachment
- Establishment contract certified by official authorities (if it is not a sole company)
- A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
- A certified copy of the audited financial accounts
- A validated 6-month bank statement
- A certified copy of the lease agreement
- The organizational structure of the company (if it is not a sole Company)
Procedure Involved in Acquiring Tax Residency Certificate
- Create an account on the official site
- Fill the application form
- Attach the necessary documents in PDF or JPEG format
Upon verification of the application and the documents, an email will be sent to the applicant, provided the criteria are met. Following this, fee payment will have to be done and the applicant will receive the certificate via express courier.
Days to Take Tax Residency Certificate
- The pre-approval process usually takes 4-5 working days, if all the relevant documents are in place.
- Once the pre-approval process is completed, it can take up to another 5 days to issue the tax residency certificate.
Change of Authority in issuing the Tax Residency Certificate
The Ministry of Finance was responsible for the issuance of tax residency certificate in UAE till November, 2020. It was then changed to Federal Tax authority as per the Cabinet Decision No. 65 of 2020. If you wish to avail tax domicile certificate in UAE or if you have any query related to it, contact Al Khat Al Aali Businessman Services. We have been in the field for quite a long time and have helped numerous clients obtain tax residency certificate.
Planning to Setup Business
Request a Call Back
Seek expert advice from our experienced professionals.