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A Quick Guide to Tax Residency Certificates

A Quick Guide to Tax Residency Certificates

UAE Tax Residency Certificates, or Tax Domicile Certificates, are used to take advantage of double taxation treaties signed by the UAE. An official document confirms a natural or legal person's eligibility to benefit from Double Tax Avoidance Agreements (DTAA) on income endorsed by the UAE.

The Ministry of Finance of UAE issues the certificate to either an organization for at least one year or an individual living permanently in the UAE for at least 180 days. Using this official certificate, you can take advantage of comprehensive double tax treaties and avoid double taxation in over 76 countries worldwide. This certificate is valid for one year.

Eligibility for Tax Residency Certificates

  • Natural persons: Applicants must reside in the United Arab Emirates for at least 180 days for the application process. Furthermore, the application must be accompanied by a lease agreement authorized by the competent authorities, such as EJARI or municipal authorities in different Emirates or free zone authorities.  
  • Legal persons: The legal entity applying for the TRC must have existed for at least one year. A certified audit firm must audit or prepare financial accounts and attach other required documentation. In addition to the application, there must be an audited financial report corresponding to the certificate year.

Note: The service is not available to offshore companies since they are not members of the Double Taxation Avoidance Agreements.

Validity

A tax residence certificate issued in Dubai is valid for one year from the issue date. Both corporations and individuals can take advantage of the Tax Residency Certificate, or TRC Dubai.  Individuals can also request additional certificates based on their circumstances.

Offshore corporations are not eligible for TRC; however, they can obtain a tax exemption certificate.

Procedures

In order to obtain the Certificate, the Applicants will have to create an Account on the FTA e-services portal, through which they can apply by uploading supporting documents. After the application is submitted and documents uploaded, FTA will review the submission and Approve/Reject accordingly. Additionally, you will be required to submit predefined vital records to obtain the certificate.

Benefits

The United Arab Emirates offers a great chance to start a business venture. Its competitive tax environment is one factor that attracts businesses to the UAE. Having established why a tax residence certificate in UAE is necessary, let's now examine why it is so essential to obtain one:

  • Corporations and individuals are both exempt from income taxes.
  • It Significantly promotes international trade.
  • It allows one or more parties to be legally recognized in the United Arab Emirates.
  • No extra taxes are incurred during the import-export process.
  • Bilateral business ties are strengthened as a result.
  • Being a UAE resident includes avoiding double taxation and taking advantage of tax breaks.
  • Individuals and corporations are permitted to obtain multiple certifications.

Why AMCA?

Incomplete paperwork and incorrect documentation can delay your application and, in some instances, result in rejection. Therefore, we recommend applying for your tax domicile certificate in the UAE with the help of AMCA's tax experts.

Our tax experts will make your job easier by handling all the hassles on your behalf. We will organize the application process for you, communicate with government bodies, and ensure it is in good order before submission.

09 Jun 2022

Akanksha Chandra

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