What is a Dubai Tax Residence Certificate

What is a tax residency certificate in Dubai? Here is some clarification concerning the Dubai Tax Residence Certificate (TRC), or Tax Domicile Certificate (TDC). We’ll go over what is, and in what cases it will be useful. A tax residency certificate, which you’ll sometimes see as a tax domicile certificate, is an official document that the relevant authority will issue to confirm the country of tax residence for a company or legal entity. The UAE’s Ministry of Finance issues the tax residency/domicile certificate. You can get a certificate issued to a company registered in the UAE as well as for individuals residing in the UAE. Once you receive your tax residency certificate, it will have a year’s validity upon the date of issue.

One of the main advantages of doing business in the UAE is the fact that by registering a Free Zone Company, you can obtain a UAE Tax Certificate. The tax residence certificate is issued to a resident company operating in the country, such as a Free Zone company or a firm operating on the mainland and lets the company fully take advantage of the benefits stemming from double taxation avoidance treaties. 

However, this benefit does not extend to an Offshore Company, that is also known as International Business Companies (IBC). As a result, this type of firms cannot receive a TDC. Offshore companies can receive a tax exemption certificate instead of the TDC. 

Some of the perks of establishing your tax residency in the UAE are: 

• Taking advantage of the double taxation avoidance agreements between the UAE and your country to avoid income taxes back home. However, note that the United States requires all US citizens and permanent residents to declare tax returns regardless of them living in the country or not. Plus if your home country is part of CRS, you can use this certificate to establish your tax residency for proper compliance. 
• Claiming back taxes if you paid them in the same year when you became a UAE tax resident.
• Ensuring fairness across the board for taxpayers, companies or individuals, and protecting the national economy.

How do I get a tax residency certificate in Dubai/ the UAE?

As already mentioned, individuals who are residing in the UAE can obtain a tax residency certificate as this document is not exclusively for entities. It’s especially advantageous for those people whose countries do not have a double tax avoidance treaty with the UAE, such as the United States. The TDC serves as the official confirmation on the tax residency of a person or a legal entity in the United Arab Emirates. 

The tax residency certificate process depends on whether the tax residency certificate is for a person or a company. For individuals and companies, you must fulfil all conditions for eligibility. The requirements for an individual TRC are as follows:  

• Copy of your valid passport
• Copy of your UAE residence visa
• Copy of your Emirates ID
• Six months worth of bank statements in the UAE 
• Valid proof of income in the UAE (i.e., employment agreement, salary certificate, etc.)
• Immigration report
• Tenancy agreement or title deed (certified copy)

Companies also have to meet specific requirements prior to obtaining a Tax Residency Certificate. A company cannot directly request for the tax certificate without verifying if a company is qualified, as the authorities could reject the application. Below is the list of the requirements that companies are required to meet:

• Copy of the company’s valid trade license
• Tenancy agreement or title deed (this should be valid for a minimum of three months before the application)
• Physical office space
• Valid passport copy
• Copy of visa and Emirates ID of the company’s Director/Manager
• An audited latest financial statement that has or the company’s UAE bank statements for the last six months (should be stamped by the bank)

The documents and the application are provided to the Ministry of Finance, which will proceed with the compliance procedure and will issue the Tax Residency Certificate within approximately two to three weeks.

Are you looking for help in obtaining the certificate? 

Europe Emirates Group has an exceptional level of experience in offering professional structuring for international customers and tax planning, as well as satisfying Economic Substance Requirements in the UAE. Our services in this regard include the following:

• Processing all legal filings, forms, and applications;
• Assisting in meeting all tax requirements;
• Advising you on the right investment structure that adds value to your business;
• Incorporating suitable tax structures for your business in the UAE such as offshore, Free Zone or Mainland;
• Using the benefits of double taxation treaties to optimise your taxes and cut restraining taxes on income, capital gains, etc.;
• Using the benefits of double taxation agreements to maximise your fees and cut restraining taxes on income, capital gains, etc.

If you would like to begin the process of working on any of these services, don’t hesitate to contact us today.