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 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.
Promote the development goals of the UAE and diversify its sources of national income
Eliminating double taxation, additional taxes and indirect taxes and fiscal evasion
Remove the difficulties relating to cross-border trade and investment flows
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
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
Encourage the exchange of goods, services and capital movements
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:
The validity of a Tax Residence certificate is for 1 year.
Note: Dates can be chosen based on your requirement.
The process of issuing a tax residency certificate takes approximately 2 weeks to approve the application and up to 2 weeks for the delivery.
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:
If you need any help with tax residency certificate, feel free to contact us. We’ll be glad to assist you.
Start your online business in Dubai with an e-commerce license Dubai is one of the world’s top markets for online businesses, generating $8.5 billion in
A Complete Guide to Get the Metaverse License in Dubai, UAE A new way to delve into world Mataverse is a very broad and amazing
How to get a buying and selling real estate license in Dubai With more tourists visiting Dubai each year, the city is thriving. The situation has
Investing in Dubai is a popular choice among Russians. Why is that? As geopolitical tensions continue to soar against the backdrop of the Ukrainian standoff,