What is the Dubai Tax Residence Certificate?

Did you know that there are a number of requirements that businesses must meet to be compliant with both local and international tax regulations? In this article, we’ll explore the Dubai Tax Residence Certificate (TRC) and Tax Domicile Certificate (TDC), their uses and why they are imperative. 

What is a Tax Residency Certificate? 

A tax residency certificate, occasionally called 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. In the UAE, the Ministry of Finance is responsible for issuing the certificate of tax residence and you can get a certificate issued to a company registered in the UAE as well as for individuals residing in the UAE. Upon issue, your tax residency certificate will have a year’s validity.

One of the main advantages of doing business in the UAE is 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, including both Free Zone companies or firms operating on the mainland and lets the company take full advantage of the benefits stemming from double taxation avoidance treaties. 

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

Here are some perks of establishing your tax residency in the UAE: 

• You can take 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 whether or not they reside in the US or not. 

  • If your home country is part of the CRS, you can use this certificate to establish your tax residency for proper compliance. 

• You can reclaim taxes if you paid them in the same year as when you became a UAE tax resident.

• You can ensure fairness across the board for taxpayers, companies and individuals, protecting the national economy.

How Can I Get a Tax Residency Certificate in Dubai or the UAE?

As we mentioned, individuals who are residing in the UAE can also obtain a tax residency certificate; 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 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, but both groups are subject to a number of requirements. 

Individual Requirements for the TRC: 

• 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 (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 but must ensure that they meet all requirements before application; on the contrary, the application could be rejected. 

Company Requirements for the TRC: 

• Copy of the company’s valid trade licence

• Tenancy agreement or title deed (this should have been valid for a minimum of three months before the application)

• Physical office space

• Copy of your valid passport

• Copy of visa and Emirates ID of the company’s Director/Manager

• An audited latest financial statement that has the company’s UAE bank statements for the last six months (stamped by the bank)

The documents and the application will be provided to the Ministry of Finance; they will then proceed with the compliance procedure and issue the Tax Residency Certificate within approximately two to three weeks.

Are You Looking for Help 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 include the following, among others:

• 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 minimise your fees and eliminate restraining taxes on income, capital gains, etc.

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

Written by
Adrian Oton

CEO, Europe Emirates Group