How to Get Declaration of Tax Residence in UAE

It has recently become popular to obtain a Tax Residency Certificate (TRC) in the United Arab Emirates (UAE). This certificate enables businesses or individuals to benefit from double taxation agreements that the UAE has signed with other countries. Simply put, a TRC allows one to avoid double taxation of the same income in different countries. This means that the TRC gives an opportunity to avoid double taxation.

This article presents information on how to get a TRC in the UAE, the documentation required, the procedure involved, and the advantages that come with it.

Understanding Tax Residency in UAE

A TRC is an official document issued by the Competent Authority in the UAE, which states that the person or company is a tax resident of the UAE for any specified period of taxation. It simply means the holder is a resident in the UAE for taxation purposes and may allow for benefits under double taxation avoidance agreements signed by the UAE and other countries to avoid imposing double taxation.

One of the prime objectives of a TRC is to avoid the possibility of double taxation, in which an individual or firm is potentially taxed twice for the same source of income: once in the UAE and secondly in another country where the same individual or firm may be operating or deriving the particular income. However, if a Double Taxation Avoidance Agreements (DTAA) is in place between the UAE and the other contracting country, the holder of a valid TRC can claim tax credit, exemption, or relief against double taxation for certain kinds of income earned outside of the UAE.

Read more about Declaration of Residency in UAE

Conditions for Natural Persons

In the case of natural persons, the following criteria shall be applied to determine the residency of the taxpayer in the UAE:

• If the individual resides or stays in the UAE by nature of their usual or primary place of residence, or the center of their financial and personal interests is in the UAE.
• The physical presence of the individual in the UAE is 183 days or more during any period of 12 consecutive months.
• The individual is remaining in the UAE for 90 consecutive days within 12 months in a row, with a valid UAE residence permit, the subject is a national of one of the Gulf Cooperation Council member states, and the subject meets further conditions.

Criteria for Legal Entities (Companies)

A company is considered a resident for tax purposes in the UAE if:

• It has been incorporated, established, organized, or recognized as an entity under UAE legislation.
• The tax residency of the company is based on the prevailing UAE tax law or any double taxation agreement between the UAE and other jurisdictions.

How to Apply for a Tax Residency Certificate

In the UAE, an individual or a company has to provide a set of documents to the concerned government department to issue a Tax Residency Certificate, although the requirements of the concerned department and the applicant’s category may vary.

Documents Required for a Company to apply for Tax Residency Certificate

• Certificate of incorporation
• Organizational structure of the company
• Copies of the passport and valid residency visa in the UAE of all directors, shareholders, or managers
• Copies of the current UAE trade license (whether mainland or free zone) and at least one year in full operation
• Memorandum of Association
• Audited financial statement or bank statement of the last six months, duly certified

List of documents required for Individual Applicants to apply for Tax Residency Certificate

• Copy of passport, UAE residence visa, Emirates ID
• Copy of a residential lease agreement or tenancy contract
• Latest salary certificate
• Bank statements for the last six months
• Detailed report from the General Directorate of Residency and Foreigners Affairs showing all entries and exits and days stayed in UAE

Documents Required by Investors as well as Housewives to apply for Tax Residence Certificate

• Business license
• Partner’s name and documents (if investor)
• Marriage certificate, passport, and residency permit (for housewives)
• Salary certificate of the partner and work contract (in the case of housewives)

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Step-by-Step Process for Obtaining a Tax Residency Certificate

The entire process for getting a Tax Residency Certificate in the UAE involves an online application, document submission, and payment of the applicable fee. Presented below is an elaborative step-by-step guide on this:

1. Log into or register for the Tax Certificate account on the portal of the Federal Tax Authority (FTA).
2. If you are already registered as a taxpayer, log in with your TRN and your email address, or otherwise as a new taxpayer.
3. Fill in the Application form for Tax Residency Certificate.
4. All documents should be uploaded in PDF or JPEG.
5. Pay an application fee to apply.
6. The tracking status of your application will be shown on the Dashboard. Pre-approval takes 4-5 working days.
7. In case of approval, make a final charge to download the Tax Residency Certificate.
8. Open a password-protected file of the certificate receipt through the username and the last four digits of the candidate’s registered mobile number.

What is the Fees and Validity of a Tax Residence Certificate?

The Tax Residency Certificate in Dubai is issued for one year from the date of issuance. It is also called TRC Dubai, and both businesses and individuals can use it. You may apply for any number of additional certificates subject to certain conditions, if any.

It is important to note that offshore companies are not eligible for Tax Residency Certificates. Instead, they can apply for a tax exemption certificate.

The cost for getting a Tax Residency Certificate from the UAE are as follows:

• 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.

What are the benefits of tax residency certificate in UAE?

Tax Residency Certificate in the UAE offers a lot of benefits to the individual or business. Some of these are as follows:

• It allows individuals and businesses to avoid paying any income tax.
• It makes international commerce easier and smoother.
• The legal status of the entity in the UAE can be easily verified.
• It provides exemptions from various taxes imposed during export and import activities.
• Resident can obtain tax exemption and avoid double taxation.
• More than one certificate in case of persons as well as companies will be issued.

We make your Tax Residency Certificate in UAE a hassle-free process through expert guidance and comprehensive support for the document verifications, followed up to the end that will make your application complete and compliant.

Call Notary Public Dubai today and take the first step towards claiming your tax benefits!