The UAE's favourable tax environment is one of the numerous factors that attract firms to the country. In addition, its world-class infrastructure and the economy lure investors from all around the world. A Tax Residency Certificate, known as a Tax Domicile Certificate, demonstrates that you pay taxes to a particular jurisdiction and permits you to benefit from double taxation treaties.
The Ministry of Finance of the UAE issues Tax Residency Certificates valid for one year. To get a Tax Residency Certificate in the UAE, an individual must submit several papers, applications, and fees.
Double Tax Avoidance Agreement
The UAE has signed a double taxation treaty with several nations worldwide to guarantee that the same taxpayer is not taxed twice. Furthermore, most firms that have their headquarters in the UAE are tax-free.
To prevent paying double taxes by business owners for the same income, many countries, including UAE, signed the Double Tax Avoidance Agreement (DTAA).
It is compulsory for tax authorities of countries which have signed the DTAA, commonly known as the Double Tax Treaty (DTT), to maintain a Tax Residency Certificate.
As a result, the taxpayer cannot be subject to tax on the same income (or capital) in more than one jurisdiction with the DTT in function. It would also be essential if you understood the tax services in Dubai-UAE.
How to Benefit From the Avoidance of the Double Taxation Treaty?
Avoidance of Double Taxation Agreements helps the public and private corporations, air transport firms, investment firms, other companies operating in the UAE, and various sorts of UAE citizens ("DTA").
To be eligible for a DTA, a person must generally present a TRC proving that they are a resident of another nation and are liable to taxation.
Tax Residency Certificate in the Mainland, Free Zone and Offshore?
Any firm operating on the mainland or in a Freezone that has been operational in the UAE for at least one year is eligible for the Tax Residency Certificate.
In addition, anyone who has stayed in the UAE for at least 180 days can apply for a Tax Residency Certificate (TRC).
People whose home countries do not have a double taxation agreement with the UAE will benefit the most from this. Individuals must hold a valid UAE resident visa for more than 180 days to apply.
On the other hand, offshore corporations are not qualified for this and must get a tax exemption certificate rather than a Tax Residency Certificate.
Moreover, along with the tax residency certificate, learning about the mainland company formation in UAE would be beneficial.
Points to Remember While Obtaining a Tax Certificate in the UAE
The applicant must complete an online process to get a tax residence certificate. The steps are as follows:
- Make an account on the Ministry of Finance's (MoF) website.
- Fill out the form to apply for a UAE Tax Residence Certificate.
- Payment must be made online once the application has been approved.
Requirements to Get the TRC Certificate UAE
Below are the following requirements one should get to know while obtaining a tax residence certificate:
For Companies
- Copy of a valid trade license copy
- Copy of a valid lease contract or tenancy contract
- Copy of the passport and residence visa of the authorised signatory (Manager/Director/Owner)
- Copy of Emirates ID for the authorised signatory (Manager/Director/Owner)
- Certified bank statement of an AED account for the last six months
- Audited financial statement
For Individuals
- Copy of passport and visa
- Bank statement for the previous six months
- Certified tenancy contract with Ejari (RERA) attestation/title deed
- Salary certificate
- Immigration (entry and exit) report of residency
While reading the above details, it would be an ideal choice if you feel like starting a business in the free zone in Dubai. However, establishing a firm in the free zone or mainland is not straightforward. Therefore, to end with succeeding in your business, you can seek the assistance of business consultants.
Our Role
I believe you have grasped the concept of a tax residence certificate in the United Arab Emirates. However, if you want to establish a business in the UAE, keep in mind that the success and profitability of your venture will be determined by how well you run it. You may lose it if you do not put in enough time and effort. Business Setup Worldwide will assist you in establishing any business in the UAE. Please contact us right away; we'd be happy to help.
