TAX RESIDENCY CERTIFICATE UAE

TAX RESIDENCY CERTIFICATE UAE

A Tax Residency Certificate (TRC) also called as Tax Domicile Certificate is used to avoid getting taxed on the same income in two different countries by taking advantage of the Double Taxation Avoidance Agreement entered into between two countries.

As UAE is stepping into the new phase of Corporate Tax, the importance of obtaining Tax Residency Certificate UAE or TRC in UAE is also rising. Federal Tax Authority is responsible for issuing the Tax Residency Certificate in UAE.

Double Taxation Avoidance Agreement

The Double Tax Avoidance Agreement (DTAA) is a tax treaty signed between two or more countries to help taxpayers avoid paying double taxes on the same income. A DTAA becomes applicable in cases where an individual is a resident of one nation, but earns income in another. All the major countries in the world has entered into DTAA with their economic counterparts to foster international trade.

UAE also has entered into DTAA with around 140 countries thus broadening and liberalizing its trade route.

UAE-double-tax-agreements-map 2

Who are eligible to obtain TRC Dubai?

Natural persons: The applicant must have been a resident of the UAE for at least 180 days. EJARI or such other relevant documents showing tenancy is a basic requirement.
Legal persons: A Tax Residency Certificate is available to any company operating on the mainland or in a free zone which has been operating in the country for at least 1 year.
Offshore companies are not allowed to apply for the Tax Domicile Certificate UAE because they are not listed in the Double Taxation Avoidance agreements. They can get Tax Exemption Certificates instead.

Validity of TRC Dubai

The Tax Residency Certificate is valid for one year from the date of issue

Benefits of obtaining Tax Residency Certificate

• Avoids getting taxed for the same income in two different countries.
• Validates that the applicant is a resident in UAE
• Eases the process of cross border transactions
• Avoids double taxation during the import-export process
• Strengthens trade relationships between countries

Documents required for obtaining Tax Residency Certificate

Companies:

The following documents are required for companies to obtain TRC:

  • Valid Trade License Copy
  • Passport & Emirates ID Copy of Manager/Authorized Signatory
  • Vat Registration Number (TRN)-Subject to availability
  • Latest Audited Financial Statements
  • Bank statement for the previous six months of a local bank
  • Tenancy contract copy or any residence address of the Shareholder(s)/General Manager
  • Memorandum of Association or other relevant Documents.
  • Immigration In & Out statement of General Manager or Shareholder(s)

Individuals:

The following documents are required for individuals to obtain TRC:

  • A copy of Passport & residence permit
  • A copy of Emirates ID
  • Salary Certificate/Source of income/Labor Contract/3 months Salary slip
  • Bank statement for the previous six months of a local bank
  • Certified copy of residential lease agreement/Proof of residence

Approximate Government Fees for obtaining Tax Residency Certificate

Issuance of Different kind of TRCPrice in AED
Application SubmissionAED 50/Application
Issuance of TRC
Tax RegistrantAED 500
Non Registrant legal personsAED 1,750
Non Registrant natural personsAED 1,000

Note: –An additional fee of AED 250 will be charged for printed copy of the certificate.

Duration to obtain Tax Residency Certificate UAE

As per the Federal Tax Authority, the bare minimum period to approve the TRC application is 3 business days. Once the application is approved, 5-7 business days will be required for the final delivery of the certificate.

Why Elevate First Accounting & Auditing?

We have been in the industry for over a decade now. Dealing with clients from multiple business and background has given us an extensive experience in accounting, auditing and taxation around the world. We can help you in acquiring a Tax Residency Certification based on requirements of your business. We fulfill any TRC related services.

FAQs on Tax Residency Certificate in UAE

What is a UAE Tax Residency Certificate?

A UAE Tax Residency Certificate is a certificate issued by the Federal Tax Authority to a company or individual who has a place of residence in the UAE to use the benefit of double taxation avoidance agreements UAE has entered with various countries. Based on this tax certificate, UAE tax resident can be relieved from taxes in their home country as he is considered a tax resident in the UAE.

Should an individual home address in UAE to obtain TRC?

Yes. A UAE residential address is required for obtaining TRC in UAE.

Is Tax Domicile Certificate applicable for offshore companies?

Offshore companies are not allowed to apply for the Tax Domicile Certificate UAE because they are not listed in the Double Taxation Avoidance agreements. They can get Tax Exemption Certificates instead.

Are bank statements from other countries acceptable for TRC application?

No. A local bank account held for at least a period of six months is mandatory to apply for tax residency certificate.

Can we get a printed copy of Tax Certificate?

Yes. By paying an additional charge of AED 250, a printed certificate can be obtained.

Can we obtain a Tax Domicile Certificate from a previous date?

Yes. TRC from a previous date can be obtained by submitting a bank statement covering the relevant period and a home address proving your residence in the UAE during the time.