Skip to content

Tax Residency Certificate in Dubai,UAE

The UAE does not levy income tax on individuals. However, it levies corporate tax on oil companies and foreign banks. Excise tax is levied on specific goods which are typically harmful to human health or the environment. Value Added Tax is levied on a majority of goods and services.

The UAE government implemented value added tax (VAT) in the country from January 1, 2018 at a standard rate of 5%

In an era of globalization, businesses are no longer restricted to a single geographical territory and are spread across the globe. As total income is contributed by different countries, each country wishes to tax the global income of its residents and the profits earned on its land. In order to curb double taxation and ensure that the business owners are not paying tax for the same income twice, countries like UAE have entered into Double Tax Avoidance Agreement (DTAA). Once DTAA is signed between two countries, it mandates tax authority to produce a tax residence certificate, which helps investors, individual residents claim the treaty benefits.

The United Arab Emirates has 94 agreements in place with other countries to avoid double taxation on overseas investments.

Double Tax Avoidance Agreement (DTAA)

Double taxation is defined when similar taxes are imposed in two countries on the same tax payer on the same tax base, which harmfully affects the exchange of goods, services and capital and technology transfer and trade across the border.

Public and private companies, investment firms, air transport firms and other companies operating in the UAE, as well as residents, benefit from Avoidance of Double Taxation Agreements (DTA). With the purpose of promoting its development goals, the UAE concluded 115 DTA to with most of its trade partners.

The purpose of avoidance of double taxation agreements

  1. Promote the development goals of the UAE and diversify its sources of national income

  2. Eliminating double taxation, additional taxes and indirect taxes and fiscal evasion

  3. Remove the difficulties relating to cross-border trade and investment flows

  4. Offer full protection to tax payers from double taxation, whether direct or indirect and avoid obstructing the free flow of trade and investment and promoting the development goals, in addition to diversify sources of national income and increase the size of investments inflows

  5. Take into consideration the taxation issues and the global changes in the economic, financial sectors, and the new financial instruments and the mechanisms of transfer pricing

  6. Encourage the exchange of goods, services and capital movements

How to Get a Tax Residency Certificate in Dubai/Abu Dhabi, UAE

Tax Residency Certificate in UAE is also known as “Tax Domicile Certificate”. It is issued by the UAE Ministry of Finance the governing body, to take advantage of the double taxation avoidance agreements signed between the foreign jurisdictions and the UAE. There are certain criteria to obtain Tax Residence Certificate in UAE, these are:

Eligibility for Tax Residence Certificate in Dubai

Eligible

  • A company operating in UAE mainland
  • Free zone company
  • An individual investor/business owner
  • An employed individual

Not Eligible

  • Branch of a foreign company
  • Offshore company
  • A non-employed individual (with a spouse visa)

Requirements to Avail Tax Residence Certificate

For Companies

  1. Copy of a valid trade license copy
  2. Copy of a valid lease contract or tenancy contract
  3. Copy of the passport and residence visa of the authorized signatory (Manager/Director/Owner)
  4. Copy of Emirates ID for the authorized signatory (Manager/Director/Owner)
  5. Certified bank statement of an AED account for the last 6 months
  6. Audited financial statement

Individuals

  1. A valid copy of passport and visa
  2. Bank statement for the last 6 months
  3. Certified tenancy contract with Ejari (RERA) attestation/title deed
  4. Salary certificate
  5. Immigration (entry and exit) report of residency

Validity

Corporate/Individual

The validity of a Tax Residence certificate is for 1 year.

Note: Dates can be chosen based on your requirement.

Expected Time Taken to Receive Tax Domicile/Tax Residency Certificate in the UAE

The process of issuing a tax residency certificate takes approximately 2 weeks to approve the application and up to 2 weeks for the delivery.

Obtaining TRC in the UAE through Alya Auditors

Alya Auditors has vast experience in offering professional tax planning and structuring services for international clients and also helps entrepreneurs and firms in starting a business in Dubai through company registration, incorporation and legal consulting services… We can help you with the following:

  • Suggesting the right investment structure that adds value to your business
  • Incorporating ideal tax structure for your business (setting up offshore companies, trusts, and foundations, international business companies, hybrid entities, etc.) in any part of the UAE
  •  Using right jurisdiction and double taxation agreements to optimize your taxes and reduce withholding taxes on income, inheritance, capital gains, etc.
  • Processing all statutory filings
  • Meeting all regulatory tax requirements

If you need any help with tax residency certificate, feel free to contact us. We’ll be glad to assist you.

Recent Posts

Auditors-Chartered Accountants in the UAE

What is Audit Trail?

What is Audit Trail? When an external auditor asks a question to better understand a certain accounting transaction, most business owners become anxious. You may

Read More »
error: Content is protected !!