Tax Residency Certificate in UAE

Many of us do not find the idea of paying taxes a pleasant one; yet we are obliged to do so. We have certain responsibility towards the society and government and hence are expected to pay the necessary taxes to the government.

When you are a citizen of a particular country and reside in a different country, the issue of paying taxes in both the countries will arise. As a solution, many countries entered into an agreement to help taxpayers avoid paying double taxes on the same income.

The UAE has a large double tax treaty network in place. It has signed agreement with more than 120 countries and the list is still expanding.

 Benefits of double taxation avoidance agreements

To take advantage of the agreement, one must obtain a tax residency certificate, also known as tax domicile certificate. The certificate is issued by the UAE Ministry of Finance and to avail this, there are certain criteria for that must be fulfilled. All individuals and onshore and free zone companies can apply for TRC certificate, but offshore companies cannot.

Tax residency certificate for individuals

A person applying for the Tax residency certificate in UAE(TRC) should have stayed in the UAE for at least 180 days; non-residents cannot apply.

Documents required for Tax residency certificate:

  • A copy of the passport and valid permit of residence. 
  • A copy of ID card. 
  • A certified copy of (residential) lease agreement. 
  • Validated 6-month bank statement from a local bank. 
  • Salary certificate. 
  • A report from the General Directorate of Residency and Foreigners Affairs specifying the duration of stay. 
  • Tax forms (if any) from the country where the certificate needs to be submitted. 

Tax residency certificate for companies:

If a company needs to apply for Tax residency certificate (TRC), then they should have functioned in the UAE for minimum one year.

Documents required for Tax residency certificate:

  • A copy of the trade license and partners’ attachment. 
  • Establishment contract certified by official authorities (if it is not a sole company). 
  • A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence. 
  • A certified copy of the audited financial accounts. 
  • A validated 6-month bank statement. 
  • A certified copy of the lease agreement. 
  • The organisational structure of the company (if it is not a sole Company). 

  Process involves in obtaining a TRC certificate

  • Create a new account on MoF website ad apply via this
  • Review of the submitted documents by the department and adoption
  • Payment of fees

Following the payment, the certificate will be mailed.

Double taxation avoidance agreements help in the expansion goals of the country and in economic diversification.

 

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