Everything About Tax Residency Certificate UAE

Posted by sgycac on February 2nd, 2019

Are you confused about the Tax residency certificate implemented in UAE and want to know about it; then we have sorted it out for you in the following blog. Globalization has led to cross-country trading which faced some issues of taxation. The problem they faced was that a company trading between two countries was paying tax of its own residential country as well as of the other country in a trading transaction. This issue was solved by implemented the tax residence certificate in UAE(TRC).

WHAT IS TRC?

A tax residence certificate is a legal document which provides a company or a person legal tax status in a trading system in front of the ministry authorities. This certificate is called tax residence or tax domicile certificate as it also provides a residential proof for the company or person holding the certificate.

WHAT IS DTAA?

Double Tax Avoidance Agreement (DTAA) is legal agreement signed between two or 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.

ELIGIBILITY FOR OBTAINING THIS CERTIFICATE

There are certain rules and regulations for the company or individual to obtain a tax residency certificate. They are mentioned below:

ELIGIBLE

• The company should be based in proper Dubai
• The company should be established atleast 36 months prior
• A free zone company can also register
• An employed candidate
• An individual with his own business

NOT ELIGIBLE

• A company that is offshore
• An unemployed individual with a spouse visa
• A company that has recently registered
• Branch of a foreign country

DURATION OF ISSUANCE OF CERTIFICATE

• Duration that is expected for processing is 3 working days after getting approval from the ministry.
• The expected duration for getting the result is instantly after the payment is completed. They receive this certificate through mail.

VALIDITY OF THE CERTIFICATE

The certificate has a validity period of 1 year from the date of its issuance.

LOCATION OF SERVICE PROVISION

If you want to obtain a tax residence certificate then you need to contact ministry of finance’s website of application.