Your Ultimate Guide To Tax Residency Certificate in Dubai UAE

September 13, 2023

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Do you own a Tax Residency Certificate in Dubai UAE? Contemporary businesses are not confined by borders anymore, the business sector has become privy to global outreach. An increase in cross-culture business activities offers diverse gains and allows for enriching trade relations on an international scale. However, there’s a downside to becoming a universal marketer, you get taxed in different jurisdictions. As the total income is the revenue from independent countries, each state is inclined to tax the income profited off its land. This often results in double taxation. To safeguard businesses against capital loss, a resolution, the Double Tax Avoidance Agreement was made. DTAA commissions the tax authority to furnish a Tax Domicile Certificate allowing residents and investors to utilize the treaty’s exploits.

Your Safe Haven – Double Tax Avoidance Agreement

UAE is one of the 90 signatories of the Double Tax Avoidance Agreement. The mutual agreement protects and ratifies the stakes of foreign investors and companies who invest capital from across the globe to realize their dreams in the UAE. As a result, foreign nationals and investors who are already registered taxpayers overseas find liberation from hefty tax payment and business setup in UAE does not face the brunt. The advantages of the treaty are not only limited to companies and firms. Residents who have fiscal involvement in the UAE for more than 180 days also qualify to enjoy perks of the treaty by acquiring a Tax Residency Certificate.

Currently, 90 countries are in a coalition of the DTAA. Out of which 42 are European, 23 are Asian, 13 African, 4 Middle Eastern, 2 South American, 2 from Oceania, 2 Central American, and 1 each from the Caribbean and North America. Thirty-three nations are still pending on the list.

Acquire a Tax Residency Certificate in Dubai/Abu Dhabi, UAE

Companies operating in the UAE for at least one year can obtain a tax residency certificate in Dubai, which is an official government document issued by the Federal Tax Authority (UAE). The document, which is also known as the tax domicile certificate, can be issued to individuals with UAE residency visa and that are residing in the UAE for at least 180 days.

The tax residency certificate issued by the Federal Taxation Authority in UAE is valid for a period of one year and is being issued electronically. Holder of the certificate can apply for renewal of a certificate after the one-year period expires. The Federal Taxation Authority also issues Commercial Activities Certificate to allow Emirati businesses to recover VAT imposed in various countries. Before you start your tax residence certificate process and invest money, make sure to go through the list of countries with whom the UAE has signed Avoidance of double taxation treaty, so that you know whether your country is part of the list or not.

For all issues related to tax and tax residency certificates, the relevant government authorities have provided licenses to firms that are aware of the legalities and can help people through the process. The firms remain the primary point of contact throughout the whole process of you becoming a tax resident.

Who Qualifies for Tax Residency Certificate in Dubai?

  • Companies operational in UAE mainland
  • Business Owners or Investors
  • Free zone Companies
  • Individuals who have an active employment status

Offshore companies, branches of foreign companies, and unemployed Individuals residing on spousal visas disqualify for a tax residence certificate.

What You Require

To obtain the tax residency certificate, the government of the UAE has set some requirements that you need to fulfill. Given below is a list of things that you require before you can apply:

Taxation for Companies:

  • A valid company trade license
  • Contract of Establishment that is verified by official authorities
  • Passport copy of manager and shareholders
  • Residence visa of manager and shareholders
  • Emirates ID of manager and shareholders
  • A copy of the business’ latest audit report (verified)
  • Latest bank statement for the company account (last 6 months)
  • Company lease agreement/Tenancy Contract (Certified Copies)
  • Tax forms from the country where the tax residency certificate in UAE is to be submitted

Taxation for Individuals:

  • Passport copy
  • UAE Residence Visa copy
  • Emirates ID copy
  • Residential lease agreement/Tenancy Contract (Verified)
  • Latest pay slip
  • Latest bank statement for the company account (last 6 months)
  • Report from General Directorate of Residency and Foreigners Affairs verifying the number of days the applicant has stayed in the UAE
  • Tax forms from the country where the tax residency certificate UAE is to be submitted

Differentiating Reality from the Myths

1. A residential address in the UAE is not required to obtain a TRC.

A definite myth. It is mandatory for the applicant to have a residential address in the UAE and a tenancy contract in order to meet FTA’s application criteria.

2. It is compulsory to reside in the UAE for a consecutive of 180 days in order to meet FTA requirements.

Partially true. The individual applicants need to exhibit ‘strengthened ties’ with the application jurisdiction. Hence, they are required to have resided in the UAE for at least 180 days within the year proceeding applications. If the applicant is unable to fulfill this objective after application, they may re-apply.

3. Predation of TRCs is impossible.

Myth. FTA may issue backdated Tax Domicile Certificates as long as the applicant provides documented proof of having had a UAE residency visa, residential address and six months of UAE bank statements accounting for the specific time period.

4. International bank account statements may be attached along with my application.

Myth. The application requires stamped, UAE bank account statements of the last 6 months. International bank account statements or computer-generated statements are unacceptable.

5. A UAE resident qualifies for Tax Residence Certificate Process after six months.

Fact! A UAE tax resident qualifies for the certificate after six months (from the issuance date of a UAE resident visa). There also needs to be a 6-month bank statement and 6 months of a lease contract.

If you are interested in obtaining tax residence certificates for free zone companies, there’s nothing that you need to worry about. The process is clear and the only thing you need to make sure is that your documentation is complete. You already have the list of requirements above. Take your first step and obtain the certificate in no time. Whenever you hit a dead-end, experts at KWS Middle East will step in to steer you in the right direction.

We have done tons of these so it should not come as a surprise that the whole process is at our fingertips. We help because businesses and individuals do not have the time in such a fast-paced world to visit offices and submit applications. Why take the difficult path when we provide additional ease and complete processes on your behalf?

Contact us today and see why we should be your number one choice for all your business requirements.

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