TAX RESIDENCY CERTIFICATE DUBAI ? COMPLETE INFORMATION

Posted by sgycac on January 12th, 2019

Globalization has made it possible for different countries to perform international trade and exchange. This has led to expansion of businesses and each country implies tax to the global income of its residents and the profits earned on its land. In order to ensure that each business pays once for its income, different countries have signed Double Tax Avoidance Agreement (DTAA). UAE is one of the countries which have signed this agreement with multiple countries for the same purpose.

What is DTAA?

Double Tax Avoidance Agreement (DTAA) is an agreement signed between two/multiple countries in order to avoid taxpayers paying double tax based in a single income earned from their native country as well as the source country. For example, any XYZ foreign company which is a part of this treaty and that already pays taxes abroad for the profits it has earned in his/her business is free from bearing any taxes to UAE.

What is tax residency certificate?

A Tax Residence Certificate is a document issued by the UAE Ministry of Finance stating the applicant as a resident of for eligible government entities, companies and individuals to take advantage of agreements to avoid double taxation on income signed by the UAE.

How to get Tax Residency Certificate in UAE?

Any company or individual that fulfils the basic criteria of eligibility can have the tax residency certificate to avoid double taxation on its income. The eligibility criteria for acquiring this certificate which is also called as “Tax Domicile Certificate” are as follows:

• Individual residents in UAE, for above 12 months period can apply for the certificate.
• Corporate having a track record of one year and more are eligible to apply for the certificate.

Documents required for getting Tax Residency Certificate in UAE

For Individuals

1. Copy of the passport.
2. Copy of valid Emirates ID.
3. A certified copy of lease agreement.
4. Salary certificate.
5. Certified copy of bank statement.
6. Residency Report from G D R FA
7. Tax forms from the requesting country

For Corporate

1. Copy of the trade license
2. Certified copy of Establishment contract
3. A copy of the company’s owners/partners/directors’ passports
4. A copy of the company’s owners/partners/directors’ IDs
5. A copy of the company’s owners/partners/directors’ permits of residence
6. A certified copy of the audited accounts
7. A validated 6-month bank statement

Procedure of getting the certificate

These are the steps which occur while issuing a certificate:

1. When a company/individual submits all the documents, an online account for the applicant is created on the MoF portal.
2. For reviewing and checking your documents, a tax residence certificate application form is filled out and uploaded alongside the supporting documents to be approved by the MoF.
3. Once the MoF approves the documents, fees are paid electronically and the certificate is generated.
4. This is then made available for collection at Ministry or couriered to a domestic address.
Time Duration required for issuance of the certificate
1. Approximately 2 weeks for approving the certificate.
2. Approximately 2 week for the delivery of certificate.

NOTE:

1. The MoF has set a requirement for an individual applicant to have spent at least 180 days in the UAE within the year after the applications.
2. Mandatory conditions are residential addresses in the UAE and tenancy contract in the applicant’s name to apply for a TRC.
3. The MoF will not accept any foreign bank statements. It is necessary for the applicant to have a UAE personal bank account in the UAE. Also, to have held this account for a minimum of 6 months.
4. The MoF also requires the latest 6 months statements to be stamped by the UAE bank.
5. One can obtain backdated Tax Residency Certificates. The MoF allows applicants to backdate their Tax Residence Certificate application as long as there is documented proof of the applicant having had a UAE residency visa, 6 months UAE bank statements and a residential address for that period.