The prosperity of a country’s economy depends on the flourishing of that nation’s trade and commerce. To bring about growth in trade and commerce, the government of most countries levy taxes on the annual income of their citizens and residents as well as the corporate entities. The amount so collected by the government is utilized for investment in the social overheads and other developmental initiatives, which are very essential for the overall economic growth of the country.

There are instances when there are many people who are residents’ of two or more countries. For such persons, the problem of double taxation crops up since they have to pay taxes twice, in both the countries they reside in during the fiscal year. Thus, looking at the interests of such individuals, Tax Residency Certificate in UAE is introduced by the International Financial Relations and Organisations Department of the UAE Government. It can also be called the Tax Domicile Certificate. The Ministry of Finance, Government of UAE is responsible for issuing this certificate to individuals or firms residing in UAE but are also natives of some other country.

With a Tax Residency Certificate, you are eligible to benefit from the Double Tax Avoidance Agreement (DTAA) that has been signed by the UAE to safeguard the interests of foreign individuals investing in the country and operating businesses out of the UAE.

Criteria to apply for the Tax Residency Certificate (TRC) in the UAE

The basic criteria which enable an individual to claim for a Tax Residency Certificate in UAE are, he or she should be a resident of the UAE and should have resided in the country for at least a period of 180 days during the corresponding financial year. There is no Tax Residency Certificate in UAE provided for those non-residents in the country. For companies, the basic criterion is that it should have operated for at least a year.

Furthermore, the tax domicile safeguards the companies and individuals as they are exempted from paying taxes twice for the same income earned during the accounting year.

Documents Required for TRC in UAE

For Individuals:

  • A copy of the passport
  • A copy of the UAE Residence Visa
  • A copy of the Emirates ID
  • A certified copy of residential agreement, lease or tenancy contract.
  • Latest Salary Certificate
  • Valid and latest bank statement, for the last 06 months
  • A report from the General Directorate of Residency and Foreign Affairs that affirms the number of days the individual or resident has lived in the United Arab Emirates
  • Tax forms filed (if there are any) in the country where the certificate will be issued.

For Companies:

  • A valid copy of the company’s trade license
  • Contract certificate of the establishment by official authorities if it is not a sole company
  • A copy of the shareholders and managers’ passport
  • Residence Visa of the Shareholders and managers
  • Emirates ID of the Manager and Shareholders
  • A certified copy of the audit report or the latest audited financial statement
  • Valid and latest 6-month bank statement of the company
  • A certified copy of the Company lease agreement or tenancy contract
  • Tax forms filed (if there are any) in the country where the certificate will be issued.

The above are the necessary documents which you need to furnish if you are seeking a Tax Residency Certificate in UAE as an individual or a company. The minimum time the Ministry of Finance takes to approve your certificate is 4 to 5 working days for processing Pre-approval and 5 to 7 working days to issue the certificate after having received the approval for sanctioning the certificate.

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