What is a UAE Tax Residence Certificate?
A Tax Residency Certificate is a legal document that can be used to establish or prove the nation of tax residence. It is issued by the Federal Tax Authority (FTA) of the United Arab Emirates. The certificate has a one-year expiration date after which it must be renewed.
What is the UAE Tax Resident Certificate used for?
Avoidance of Double Taxation Agreements may be advantageous to both persons (such as UAE citizens) and legal entities (businesses) operating in the UAE (DTA). However, in order to qualify for such DTA, one must typically present a Tax Residence Certificate, which attests to the fact that the applicant is a resident of another nation (such as the UAE) and is therefore subject to taxation there.
In order to benefit from DTAs on income and prevent double taxes, the Tax Resident Certificate is given. Therefore, it aids the applicant in avoiding paying taxes in two or more nations and may also aid in establishing residency in the UAE. Additionally, making the procedure of cross-border commerce and investment easier might be beneficial.
Who is eligible to apply for and receive a UAE Tax Residence Certificate?
A UAE Tax Residence Certificate can be applied for and obtained by either an individual or a legal entity (business), provided they satisfy the criteria in effect at the time.
- Individual (Natural persons)
The applicant must have been a resident of the UAE for at least 180 days.
What prerequisites must individuals fulfill in order to obtain the UAE Tax Residence Certificate?
- Copy of a passport
- UAE residence permit (visa)
- Emirates ID
- A certified copy of a lease agreement for a residential property
- A tenancy contract copy, or title deed
- Income sources (eg: pay slip, a trade license, etc.);
- A six-month bank statement from a “local” UAE bank that has been authenticated and stamped
- A report from the General Directorate of Residency and Foreigners Affairs or Federal Authority for Identity and Citizenship (ICA) detailing the applicant’s duration of residency in the UAE (at least 180 days is required), and if relevant, any further information.
- An official tax form from the nation where the certificate is to be presented
- Business (Legal persons)
The legal person must have been established for a period of at least one year. Financial accounts must be audited or prepared by an accredited audit firm and attached with other required documents to the application.
What conditions must a legal entity (business) meet in order to obtain the UAE Tax Residence Certificate?
- A certified copy of the business license and, if necessary, the certifications of the directors and shareholders;
- Certification of the establishment contract by the appropriate authorities (if not a Sole Company);
- A duplicate of the passport of each owner, partner, and director of a legal entity; Emirates ID and a visa for permanent residence;
- A certified copy of the lease agreement or title deed, which must have been in effect for at least three months previous to the application’s submission (please note that a physical office is required to submit the application);
- A certified copy of the financial statements following an audit;
- A six-month bank statement that has been confirmed and stamped by a “local” UAE bank, and if applicable
- A tax form from the nation where the certificate will be submitted.
Is it possible to apply for an offshore UAE company?
Straight forward answer is no, a UAE offshore business cannot apply for and receive a UAE Tax Certificate since, in terms of taxation, the UAE views offshore companies as non-resident legal entities
Perks of having a TRC in UAE
- Proof to show that you are a Tax resident in the country
- Avail the benefit of double tax avoidance agreement
How do I get a UAE Tax Residence Certificate?
The applicant must register with the FTA in order to receive a certificate. An application is possible if the account was established. The application form must be completed and uploaded together with any necessary supporting files for review and approval. The applicants can handle the entire process, but it may take some time, particularly if the FTA requests further information or explanations.
- Sign-up for a Tax Certificate account by clicking here.
- Access the Tax Certificate account dashboard.
- Click on “Create Tax Residency Certificate”.
- Complete the creation process.
- Pay certificate fees after getting FTA’s approval
- If there is a Tax form that requires FTA’s attestation: send the form by mail with return service (the applicant will bear fees for sending and returning the documents). The form should be filled and covers the financial year of the certificate.
**The TRC is valid for one year from the beginning of the financial year selected by the applicant.
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