Essential Guide to Obtaining a Tax Residency Certificate in the UAE

Tax Residency Certificates and Double Taxation Avoidance Agreements (DTAA) have played a key role in turning the UAE as a top migration option for foreign investors. Obtaining a UAE Tax Residency Certificate is paramount for foreign investors to enjoy the benefits of DTAAs. The UAE has signed DTAAs with 117 countries so far, and the tax residency certificate saves the investors from being taxed in two countries at the same time.

The process of applying for a tax residency certificate is quite taxing and that is why you need to avail the assistance of registered tax consultants in Dubai, UAE. In the meantime, you can glean valuable information about UAE tax residency certificates and DTAAs by reading the article. Let’s dive into the core of the subject now…

What is a Tax Residence Certificate?

Issued by the Federal Tax Authority (FTA), a Tax Residence Certificate confirms a foreign investor’s status as a UAE resident in respect to a particular DTAAs the country has signed with specific foreign jurisdiction. The investor can use the Tax Residency Certificate as the key document to support his or her application seeking the benefits of the DTAAs. FTA-approved tax consultancy firms in Dubai can help the investors apply for the tax Residency Certificates in a seamless manner.

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Who can Apply for Tax Residency Certificate in the UAE?

The FTA issues a Tax Residency Certificate or Tax Domicile Certificate to government entities, individuals and companies incorporated in the UAE. The individuals must be permanent residents or have a UAE residency visa for at least a period of 180 days. The UAE tax Domicile certificate is valid for a year. For a faster process, eligible individuals and companies can apply with the assistance of registered tax consultants in Dubai.

Who are Not Allowed to Apply for a Tax Residency Certificate?

As per the UAE government, some entities are not eligible for a tax residency certificate. The following are not allowed to apply for Tax Residency Certificate in the UAE,

  1. Offshore Companies registered in the UAE
  2. Branch of a foreign company incorporated in the UAE
  3. Unemployed individuals (probable holding a souse visa)

Requirements to Apply for Tax Residency Certificate in the UAE

The companies should meet the following requirements to obtain a Tax Residency Certificate in the UAE:

  1. Company should be operating in UAE for at least one year
  2. Should submit valid trade license
  3. Memorandum of Association (MoA) or Articles of Association (AoA)
  4. Passport copy, Emirates ID copy, visa copies of company owners, directors and managers
  5. Valid 6 month bank statement for the required year (original statement stamped by bank)
  6. Copy of lease agreement
  7. Audited financial statements

Requirements for Individual Applicants

Individual applicants are required to submit the following documents,

  1. Passport copy & Valid Residence Visa Copy (Emirates ID)
  2. Certified Ejari for Proof of Residence
  3. Bank Statement for at least 6 months (for the year which Tax Residence Certificate is required)
  4. Source of income/ Salary Certificate

How to Apply for Tax Residency Certificate in the UAE?

From November 11, 2020, FTA is in charge of issuing Tax Residency Certificates pursuant to Cabinet Decision No. 65 of 2020 on Fees for Services. The applicants need to apply through the FTA portal to obtain a Tax Residence Certificate in the UAE. The applicants should create a tax certificate account in the FTA portal with the help of tax consultants in Dubai to ensure smooth login.

After logging into the account, the applicants should create a new tax residency certificate request. It is mandatory for registered tax payers to submit their Tax Registration Number (TRN) to go navigate further. FTA-approved tax consultancy firms in Dubai can assist the applicants in successfully filing their tax residency applications on the website.

Benefits of Double Taxation Avoidance Agreements

The UAE is low taxation (VAT at 5% is the only tax) regime and hence it has implemented a wide double tax treaty network. The UAE companies and expatriates get vital protections and benefits being part of the DTAAs as they are taxed only once. The DTAAs specify how many forms of income such as dividends, property income and pensions, should be taxed.

The agreement also lays out the term to stop the companies and individuals from treated differently based on nationality and residency. The DTAAs provide benefits including relief from certain foreign tax compliance obligations. The companies and individuals will be subject to lower withholding tax also. Consult with the best tax consultants in Dubai to avail the benefits of double taxation avoidance treaties.

How can Jitendra Chartered Accountants Help You?

In simple terms, DTAAs boost taxing rights and ensure that individuals and companies are not taxed two times. By obtaining a UAE Tax Residency Certificate, the investors and businesses can enjoy the benefits of the DTAAs. Applying for a Tax Residency Certificate is an elaborate process which requires the assistance of top tax consultancy firms in Dubai such as Jitendra Chartered Accountants (JCA).

JCA has a team of highly qualified tax agents who are experienced in dealing with the FTA. JCA helps you submit the application form in compliance with the FTA rules and regulations. Our trained tax consultants in Dubai will ensure that all your documents are proper so that there won’t be any delays in securing FTA approval. Expert assistance from JCA provides you with a seamless process to obtain the Tax Residency Certificate.

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