Tax Residency Certificate
Individuals who spend 183 or more days in the UAE during a year are considered tax residents. They can obtain Tax Residency Certificates (TRCs) and benefit from Double Tax Avoidance Agreements (DTAA) signed by the UAE with a number of countries.
The Ministry of Finance recently issued a decision, clarifying rules on determination of tax residency.
What is Tax Residency Certificate (TRC)?
Tax Residency Certificate TRC UAE is also called as Tax Domicile Certificate to take advantage of double taxation avoidance agreements signed by UAE. A certificate issued for eligible natural and legal persons to benefit from Double Tax Avoidance Agreements (DTAA) on income signed by the UAE.
REQUIRED DOCUMENTS FOR TAX RESIDENCY CERTIFICATE (COMPANIES):
- Valid Company Trade License Copy
- Establishment contract certified by official authorities (if it is not a Sole Company).
- Shareholders & Manager Passport Copy
- Shareholders & Manager Residence Visa
- Shareholders & Manager Emirates ID
- Certified copy of the latest audited financial Statement/Audit Report
- Latest and validated 6-month Company bank statement (Stamped by the bank)
- Certified copy of Company lease agreement or Tenancy Contract
- Tax forms (if any) from the country in which the certificate is to be submitted.
REQUIRED DOCUMENTS FOR TAX RESIDENCY CERTIFICATE (INDIVIDUALS):
- Passport Copy
- UAE Residence Visa Copy
- Emirates ID Copy
- A certified copy of (residential) lease agreement or Tenancy Contract Copy
- Latest Salary certificate.
- Latest & validated 6-month bank statement (Stamped by the bank)
- Entry and exit report from Federal Authority of Identity and Citizenship or a local competent Government entity. (must be at least 180 days)
- Tax forms (if any) from the country in which the certificate is to be submitted.
How to apply for TRC in UAE?
To obtain a tax residency certificate, an online process needs to be followed by the applicant. The steps include:
- Create an online account in the Ministry of Finance (MoF) portal;
- Fill out the application to obtain UAE Tax Residence Certificate;
- Once the application is approved, payment needs to be done online.
Step-by-step process to get a TRC, costs
Applicants can follow this process to obtain a certificate:
- 1-Create an account on the Federal Tax Authority (FTA) website.
- 2-After logging in, click on the ‘Services’ tab.
- 3-Click on ‘Certificates’ in the drop-down menu.
- 4-Click on ‘Request for Tax Residency Certificate’.
- 5-This will open up an application form. Fill in all details such as name, Emirates ID number, tax registration number, contact details, etc.
- 6-Upload all required documents like copies of passport, Emirates ID, tenancy contract, and utility bill, to name a few.
- 7-It is crucial to review all the details in the application are accurate and up to date before submitting.
- 8-After clicking on ‘Submit’, the user will be directed to a payment gateway. A processing fee will be charged.
- 9-Upon receiving your application, the FTA will review it thoroughly. If they grant an approval, the individual will be issued a TRC within a few days.
- 10-This certificate will be sent by email but will also be available for download in the individual’s FTA account.
The cost is Dh50 for submission, Dh500 for all tax registrants, Dh1,000 for non-tax registrant natural persons and Dh1,750 for non-tax registrant legal persons.
Why do you need a Tax Residency Certificate?
Following are some of the reasons why you as an entity or individual need a TRC.
- To prove that the applicant is a resident of UAE
- To take advantage of Double taxation agreements or treaties between two countries
- To ease the process of cross-border trade and investment flows
- To encourage the development goals of UAE
- For economic diversification
- To avoid paying taxes in the two countries for the same income
AHG as registered Tax agents in Dubai provides creative tax consulting services to a broad range of individuals and businesses. Our strong technical understanding of the tax laws is backed by a solid understanding of your business dynamics, with more than 30+ years of Practical Experiences, Dealing thousands of times with Tax Inspectors & our Multilingual team we can give you the best tax advice.