UAE Tax Residency Certificate: A Step-By-Step Guide

Tax Residency Certificate

Did you know that the United Arab Emirates (UAE) has no personal income tax? Numerous businesses are also exempt from paying taxes. To take advantage of tax-free income in the UAE, you must be able to prove that you are an actual tax resident of the area. Here, the UAE tax residency certificate is important.

With such a number of countries throughout the world, the UAE has dual taxation agreements. The taxation of non-UAE citizens is exempt under this agreement, both in their home countries and the UAE.

However, in order to benefit from the double taxation structure, a Tax Domicile Certificate, also known as a Tax Residency Certificate, is necessary. You will find everything you need to know about this certificate as well as how to register for one here.

Tax Residency Certificate: What is it?

A person may have a residence in more than one nation, but they may only be a tax resident of one, in accordance with the UAE double taxation agreement Although the double treaty taxation system depends on country to country. Double treaty system will be applicable with those countries  if the UAE has signed this treaty with them. A tax domicile certificate, also known as a tax residency certificate, is proof that you have paid taxes to a certain nation and is used to free you from double taxation.

The UAE Federal Tax Authority (FTA) is responsible for issuing the TRC, which has a 12-month validity period. An application for this certificate and the advantage of the double taxation agreement are open to international businesses operating in a Freezone on the UAE’s mainland.

Individuals, legal entities, and organizations in the UAE can apply for the TRC and enjoy a tax-free income. However, companies must prove that they have been active for a minimum of one year, and individuals must have resided in the UAE for a minimum of 180 days to be eligible for the TRC.

Additionally, individuals must have a valid UAE resident visa to apply for the certificate. Note that offshore companies are not eligible for TRC. Instead of the Residency Certificate, offshore companies must receive a tax exemption certificate.

The TRC Application Process

  • You must have lived in the UAE for more than six months if you want to register for the TRC as an individual while working there.
  • You may be qualified for the Tax Residency Certificate regardless of whether you are an employee or wish to Business setup in dubai , uae.
  • By obtaining the TRC, you can avoid paying taxes and make sure that your nation acknowledges your tax compliance.
  • To register for the Tax Residency Certificate, businesses, people, legal entities, or organizations must go to the Federal Tax Authority website and register.
  • You will complete an online application form and upload the necessary papers once you create an account.
  • The document must be uploaded in the JPEG or PDF formats. Your application will then be approved after being verified by the government. At minimum three business days may pass before this. If your application is accepted, you will get a confirmation email telling you to go online and purchase the certificate.
  • The certificate will be delivered to your location by a nearby delivery service after payment has been received.

Requirements for Getting a TRC as an Individual

  • A copy of a valid UAE visa
  • An Emirates ID copy and passport
  • A copy of a lease agreement or a title deed in the UAE
  • Proof of income in UAE
  • An approved personal bank statement for the last six months
  • Tax forms, if any, from the country that will receive the TRC when need be

Requirements for Getting a TRC as a Company

  • The company organizational structure chart
  • A copy of the Memorandum of Association
  • A copy of the trade licence
  • A copy of the audited financial accounts
  • A copy of the owners or directors of the company passports/IDs
  • A copy of the company owners or director’s permits of residence
  • A copy of the company’s Certificate of Incumbency
  • A copy of the lease agreement in the UAE
  • Valid UAE Trade License

Fees for TRC Application

  • For legal persons who are not tax registrants, the application fee for a Tax Residency Certificate is AED 1,750.
  • For all tax registrants, AED 500.
  • AED 1,000 for natural individuals who are not tax registrants.
  • Some fees must be paid at the time of application submission, and the remaining ones are due after your application is accepted.

UAE Tax Residency Certificate Timeframe

The residency certificate application process is only available online. The application procedure will become considerably simpler and quicker as a result.

The pre-approval procedure will require at least 4 to 5 working days after you register and submit an application for the certificate on the website of the UAE Federal Tax Authority. The government uses this time to verify that you have uploaded all required documents and that they are legitimate.

Assume your papers are legitimate. After making payment, the processing of the certificate will take an additional five working days. Therefore, it is essential to begin the application procedure early to prevent getting taxed.

The TRC is effective for a full year. The validity period starts with the financial year that a person or business chooses. Within a year, you must update the certificate if you are still living in the UAE. To make sure you submit it correctly, find out something about the renewal and resubmission procedure.

Keep in mind that to be eligible, the applicant had to have lived in the UAE for at minimum 180 days before applying. Before registering for the certificate, businesses or any other legal organizations must have been operating in the UAE for at least a year.

Conclusion

A UAE Tax Residency Certificate gives a number of benefits. It can be better to obtain the certificate as early as you can after coming to the UAE. Consider collaborating with a Clever Corp Business consultant to ensure accuracy and save delays.

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