AVOID paying TAX Twice!⚠️Obtain your UAE tax residence certificate

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All you need to know about UAE TAX RESIDENCE CERTIFICATE and how to obtain it ✅ What is a Tax Residence Certificate? A Tax Residence Certificate is a document issued by the UAE Ministry of Finance evidencing the applicant’s formal…

by | Feb 12, 2020 | 3 comments

All you need to know about UAE TAX RESIDENCE CERTIFICATE and how to obtain it

✅ What is a Tax Residence Certificate?
A Tax Residence Certificate is a document issued by the UAE Ministry of Finance evidencing the applicant’s formal status as a UAE resident in respect to a particular Double Taxation avoidance agreements (“DTT”) between the UAE and a specific foreign jurisdiction.
✅ What is a Tax Residence Certificate used for?
A Tax Residence Certificate is the core document in support of an application to seek the benefits of a DTT.
✅ Double Taxation Agreements
Double taxation is defined when similar taxes are imposed in 2 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.
✅ Purpose of avoidance of double taxation agreements
 – 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
✅ Target Audience
The following are those who are eligible:
– An individual investor or business owner
– A company that operates in the UAE mainland
– Free Zone company
– An employed individual
 
Those who are not eligible are the following:
– An unemployed individual who owns a spouse visa
– An offshore company
– A branch of a foreign company
✅ What are the requirements for an individual to obtain a Tax Residence Certificate?
The requirements are as follows:
• Passport copy and valid visa copy issued at least 180 days earlier
• Emirates ID copy
• 6 months personal UAE bank statements, stamped by the bank
• Proof of income in UAE, e.g. employment agreement, share certificate/salary certificate
• Immigration (GDRF) Report (report evidencing all entries into and exists out of the UAE)
• Certified tenancy contract copy or Title Deed (valid for at least 3 months prior to application)
 
The tax resident certificate is issued by the UAE Ministry of Finance and is intended for the tax authorities of one particular country in which a person plans to confirm their tax residency in the UAE. The certificate is valid for 1 year.
 
* A person must work in the country for at least 6 months.
✅ Is a UAE offshore company entitled to obtain a Tax Residence Certificate?
No. The Ministry of Finance does not issue Tax Residence Certificates for offshore companies as the latter are considered non-resident corporate entities for tax purpose.
✅ What are the requirements in order for a corporate entity to obtain a Tax Residence Certificate?
The requirements are as follows:
• Valid Trade License Copy
• Title Deed (valid for at least 3 months prior to application – a physical office space is mandatory (not flexi desk)
• Passport copy
• Valid UAE Visa page copy
• Emirates ID of the company Director/Manager
• Latest certified Audited Financial Statement or last 6 months company UAE bank statements (stamped by the bank)
 
* A company must work for at least 1 year.
✅ What is the procedure?
An online account for the applicant is created on the MOF portal. A tax residence certificate application form is filled out and uploaded alongside the supporting documents for review and approval by the MOF. Once the approval is received, fees are paid electronically and the certificate is generated and available for collection at Ministry or couriered to a domestic address. The process takes about 3-4 weeks.
📌 Special requirement to be considered when applying for the UAE Tax Residency Certificate
*️⃣ The MOF has set a requirement for an individual applicant to have spent at least 180 days in the UAE within the year proceeding application.
*️⃣ A residential address in the UAE and tenancy contract in the applicant’s name are mandatory conditions to apply for a TRC.
*️⃣ The applicant must have a UAE personal bank account in the UAE and have held such account for a minimum of 6 months. The MOF also requires the latest 6 months statements to be stamped by the UAE bank (Online generate bank statements are not accepted). The MOF will not accept foreign bank statements.
*️⃣ 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.
*️⃣ Before considering the issue of obtaining a tax residency (domicile) certificate, you must make sure that your country is on the list of those with which the UAE has signed a bilateral Double Taxation Agreement (DTT). You can find the full list of countries on this page: https://www.mof.gov.ae/en/StrategicPartnerships/DoubleTaxtionAgreements/Pages/DoubleTaxtion.aspx.
If your country is not on the list of those who have signed a Double Taxation Treaty, this document does not give you anything. You will still have to pay taxes on the income received in the UAE in your native country.
 
Tax residence certificate confirms your status of a tax resident of Dubai or any other Emirate – it can be obtained by both individuals and UAE companies. The document will allow you to enjoy the tax free environment of the free trade zones and a number of other benefits.
The certificate can be obtained retrospectively, meaning that the period of your previous stay can also be taken into account when issuing residence status confirmation under the condition that the respective documents are available.

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3 Comments

  1. Dumitra Ungureanu

    Dear Loren Lavalais, not sure what you meant with your comment.
    We will be more than happy to assist you, if you could share more details with us.

    Please contact us, should you require any assistance:
    📧 hello@bizzmosis.com
    ☎️ +971 4 381 3934
    📞 +971 52 979 8169

    Reply
  2. Seethalakshmi

    Great share, Really an informative blog about tax residence certificates in Dubai and their uses, requirements of tax residency, procedures etc. Thanks for sharing.

    Reply
    • Dumitra Ungureanu

      Thank you so much for your kind feedback! We are glad you found the article useful!

      Reply

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