Ministry of Finance provides the Tax Residency Certificate in UAE. This certificate brings the advances of the agreement sanctioned for avoiding double taxation on income from business functioning across countries.
The Tax Residency Certificate is issued for eligible government entities, companies and individuals to take advantage of agreements of double taxation avoidance on income signed by the UAE. The treaty defines rules to avoid double taxation.
Today, with globalisation, the incorporation of businesses in multiple nations is prevalent. As a result of which total income from different countries is generated. Each country wanted to extract the tax on global revenue as well as a separate tax on profits made on the federal land.
For prevention on paying double taxes by business owners for the same income, many countries including UAE have signed Double Tax Avoidance Agreement (DTAA). It is compulsory for tax authorities of countries which have signed the DTAA, commonly known as Double Tax Treaty (DTT), to maintain Tax Residency Certificate. With the DTT in function, the taxpayer cannot be subject to tax on the same income (or capital) in more than one jurisdiction.
UAE has signed the Double Tax Avoidance Agreement with around 87 countries. Ministry of Finance provides the Tax Residency Certificate in UAE, also known as the Tax Domicile Certificate. For obtaining a Tax Residency Certificate in Dubai, UAE, there are few criteria to be fulfilled. The process of acquiring the Tax Residency Certificate is approximately two weeks. Also, the validity of the Tax Residency Certificate is one year.
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