Tax Residency Certificate UAE

WHAT IS A TAX RESIDENCY CERTIFICATE?

A TRC is usually required to prove residency in another nation and tax liability there to qualify for a DTA. To benefit from agreements of double taxation avoidance on revenue to which the UAE is a party, the TRC is a certificate given to eligible government agencies, businesses, and people.

A firm operating in the UAE can obtain a Tax Residency Certificate (TRC), which establishes its tax residency and entitles it to benefits under double taxation avoidance agreements, from the UAE Federal Tax Authority (FTA).

The certificate is also known as a Tax Domicile Certificate in the UAE. It is for people who reside in the UAE as well as for organizations and legal entities. The TRC is available to any enterprise working in the UAE for at least a year, whether it is in a Free zone or on the mainland.

Offshore businesses must instead get a tax exemption certificate since they are not qualified for the tax residency certificate. Additionally, the Tax Residency Certificate is only available to people who have lived in the UAE for at least 180 days.

This is advantageous for people whose homeland does not have a double taxation agreement with the UAE. However, to apply, the person must have a valid UAE resident visa effective for longer than 180 days.

WHAT IS THE ELIGIBILITY REQUIREMENT FOR OBTAINING A TAX RESIDENCY CERTIFICATE?

FOR A NATURAL PERSON

The person must have resided in the UAE for at least 180 days. Additionally, the application must be accompanied by an annual leasing agreement that has been formally attested by the relevant authorities, such as EJARI in Dubai, municipalities in other Emirates, and free zone authorities.

FOR A LEGAL PERSON

The legal person must have established for at least a year to qualify to apply for a TRC. The application must also have financial accounts that have been audited or prepared by a certified audit company.

The auditing company's certification and stamp must appear on the report. The application's audited financial report must cover the year for which the certificate is requested. If a certificate for the prevailing year is requested, the audit report must cover the prior year.

NOTE: Due to their exclusion from the Double Taxation Avoidance agreements, offshore entities are not eligible to apply for the service.

WHAT ARE THE REQUIRED DOCUMENTS FOR TRC?

FOR A NATURAL PERSON:

• A bank statement from a local bank covering six months of the fiscal year in question.
• Entry and exit report from the local or federal authority with jurisdiction over citizenship and identity matters.
• A certified copy of the residential lease agreement.
• Source of income/salary certificate.
• Valid Residence Permit.
• Passport
• Emirates ID

FOR A LEGAL PERSON:

• Trade License.
• A certified copy of the audited financial accounts.
• Proof of authorization (Establishment Contract or the Power of Attorney).
• A bank statement from a local bank covering six months of the fiscal year is of concern.
• A certified copy of the Articles of Association (if applicable).

FOR LEGAL GOVERNMENT ENTITIES:

• A copy of the decree or the incorporation certificate.
• The individual's letter of request (the Government entity).

WHAT IS THE PROCEDURE TO AVAIL TAX RESIDENCY CERTIFICATE?

1. Create an account for a Tax Certificate.
2. Browse the dashboard for your Tax Certificate account.
3. Choose "Create Tax Residency Certificate" in step three.
4. Wrap up the creation procedure.
5. Pay certificate fees once FTA has given its clearance.
6. If a tax form needs the FTA's authentication, send it by mail with the return receipt requested (the applicant will bear fees for sending and returning the documents). The form must be completed and must cover the certificate's financial year.

WHAT IS THE TIMEFRAME ASSOCIATED WITH THE UAE TAX RESIDENCY CERTIFICATE?

PRE-APPROVAL PROCEDURE:

After filling out the application form and submitting all required documents, it will take 4 to 5 working days for the UAE Federal Tax Authority to approve the application and ensure that all provided documents are legitimate.

PROCESS FOR ISSUING CERTIFICATES

5 working days following approval and confirmation from the UAE Federal Tax Authority and payment of the application fees.

VALIDITY OF CERTIFICATE

The Tax Residency Certificate / Tax Domicile Certificate is valid for 1 year, after which it may be renewed yearly with a fresh application.

WHAT ARE THE BENEFITS OF A TAX RESIDENCY CERTIFICATE?

• It validates a person's or company's legal recognition in the United Arab Emirates.
• enables income to be covered at both the individual and corporate levels.
• enables residents of the UAE to avoid double taxation and receive tax incentives.
• It gives residents access to international markets and strengthens international trade relations.

Conclusion

Public and private companies, investment firms, air transport firms, and other companies operating in the UAE, as well as other types of UAE residents, may benefit from Avoidance of Double Taxation Agreements (DTA) by obtaining TRC.

The estimated Time to Submit an Application by an applicant will be 45 Minutes. However, the Estimated Time to Complete the Application by the FTA will be 3 business days from the date the completed application was received. Once issued, the TRC can be downloaded from the TRC platform. The TRC is valid for one year from the beginning of the financial year selected by the applicant.