Much confusion has ensued regarding the norms of application for the UAE Tax Residency Certificate. Several misinterpretations are surrounding the rules of application for this certificate. This article gives a clear and concise view of applying for the UAE Tax Residence Certificate along with setting straight the myths about this document.
The clear view of the UAE Tax Residency Certificate:
What is a Tax Residency Certificate?
It is a specialized document issued by the UAE Ministry of finance substantiating the applicant’s status as a resident of the UAE with regards to the Double Taxation Agreements (“DTT”) between UAE and a specific foreign dominion.
What is the use of UAE Tax Residency Certificate?
The Tax Residency Certificate is the essential document that helps the applicant to claim the benefits of DTT.
Is it applicable to individuals?
Subject to specific prerequisites, an individual can apply for the UAE Tax Residence Certificate.
What requirements are to be fulfilled by the individual to obtain this tax certificate?
The conditions to be met by the individual are:
- The individual should hold a valid passport copy and visa copy issued at least before 180 days,
- Emirates ID copy, (A report prepared by the General Directorate of Residency and Foreigners Affairs which specifies the number of days spent by the resident in the UAE)
- Six months statements of a UAE bank. They are to be duly stamped by the bank,
- A valid proof of income in the UAE, for example, the employment agreement, share certificate or salary certificate
- Immigration (GDRF) Report (a report that has the all recorded entries into and exits out of the UAE),
- Certified copy of tenancy agreement or title deed; valid for a minimum three months before the application,
- Application Fees of AED 2,000 + AED 3 is to be paid by the applicant through the e-Dirham card.
Can a company apply for this UAE Tax Residency Certificate?
Subject to specific prerequisites, a corporate entity or company can apply for the UAE Tax Residency Certificate.
What requirements are to be fulfilled by the corporate entity to obtain this tax certificate?
The conditions to be met by the company are:
- A copy of valid trade license,
- Certified copy of tenancy agreement or title deed; valid for a minimum three months before the application, a physical office space is mandatory (not a flexi desk)
- Valid passport, valid visa copy and Emirates ID of the company Director/ Manager
- Latest certified audited financial statement or last six months company’s UAE bank statements; stamped by the bank
- Application Fees: AED 10,000 + AED 10, paid through e-Dirham Card
- Certified copy of company’s tenancy contract or lease agreement
- Tax forms from country where the certificate is to be submitted
Is a UAE offshore company permitted to acquire a UAE Tax Residence Certificate?
No. The Ministry of Finance does not issue a UAE Tax Residence Certificates for offshore companies as they are treated as non-resident corporate entities for tax purpose.
Time is taken to Process the Application?
The whole process in case of an individual or corporate entities takes about 2 weeks for its completion.
What are the steps to apply online for the UAE Tax Residency Certificate?
The applicant should create an online account on the MoF portal and the application for the UAE Tax Residency Certificate has to duly fill and uploaded with the supporting documents for the review and the approval by the MoF. Once the MoF has issued the approval, the can be paid by the applicant through the online payment portal of the MoF. The Tax Residency Certificate can be collected in person by the applicant at the Ministry, or it can be couriered by the issuing authority to a domestic address supplied by the applicant. The whole process takes about 2-4 weeks.
The myths of the UAE Tax Residency Certificate:
Myth: An individual is required to stay in UAE for 180 consecutive days to meet the MOF requirements.
The above criteria contain partial truth and are a partial myth. The MoF has fixed a prerequisite for an individual applicant to have spent at least 180 days in the UAE within the year preceding the applications for the certificate. This is an objective criterion (day-counting). It is, however, possible to apply or reapply even if this condition is not met by the applicant if they prove to have strong ties to the jurisdiction.
Myth: There is no need for residential address in the UAE
A valid residential address in the UAE and a valid tenancy contract in the applicant’s name are mandatory conditions to apply for the UAE Tax Residence Certificate.
Myth: I can submit international bank account statements as part of my application
The MoF will not accept foreign bank statements. The applicant must have a UAE personal bank account in the UAE and have held such account for a minimum of 6 months. The MoF also requires the latest six months statements to be stamped by the UAE bank (Online generate bank statements are not accepted).
Myth: The Tax Residence Certificate cannot be predated.
An individual or a company can acquire backdated Tax Residency Certificates. The MoF allows the applicants to backdate their Tax Residence Certificate application with the proviso that there are enough documented proofs of the applicant of having a UAE residency visa, six months UAE bank statements and a residential address for that period.
