What is the Tax Residency Certificate?
A Tax Residency Certificate in Dubai sometimes called Tax Domicile Certificate (TDC) is issued by the Ministry of Finance (MOF), International Financial Relations and Organizations Department conferring eligibility to government entities, companies and individuals to benefit from the treaties of double taxation avoidance of the UAE with its other global counterparts.
If a person resides in the UAE for at least 180 days he can apply for the Dubai Residency Certificate. The non-residents cannot apply for this certificate.
Companies functioning in the UAE for at least past one year can apply for the certificate.
The eligible applicants on opening an account online on the MOF website system receive the Tax Residency Certificate in Dubai through email after making payments of necessary government fees.
Double Taxation Agreement(DTA)
Double Taxation Agreements (DTAs) are treaties reached between the UAE and other treaty countries for relieving double taxation of income earned in one country by a resident of the other country.
The United Arab Emirates first signed the Double Taxation Avoidance Agreement with France and since then, the Emirates, including Dubai, have signed 92 double taxation treaties with countries across the world.
Eligibility for a Tax Residency Certificate
For individuals:
- To qualify, individuals must have lived in the UAE for a minimum of 183 days within the applicable tax year.
- Residency can be verified using an Emirates ID, a residence visa, and documented entry/exit stamps.
For businesses:
- Entities must have been legally established in the UAE for at least one year to qualify for a DTA TRC.
- A valid trade license, whether from the mainland or a free zone, is required.
Processing Time
Procedures for Dubai Tax Residency Certificate
The procedural steps involved in the tax residency certificate in Dubai are
- Creating an online account in the system of the MOF
- Filling up tax Residency application form
- Attaching necessary documents in digital formats such as PDF or JPEG and applying with fees
- Receiving email notification of successful verification of application and remaining payment advice
- Making payment
- Issuance of certificate and sending to the registered address by express courier
Goals of Tax Residency Certificate
- This stimulates Dubai and the UAE’s economic growth
- It helps individuals to avoid paying taxes in multiple countries
- The process of international commerce and investment becomes more efficient with its implementation
- This facilitates increased economic growth for all parties involved
The Validity of Tax Residency Certificate in Dubai
Documents Required for Tax Residency Certificate in Dubai
For Companies
To apply for tax domicile certificates, the company must have exercised its activity in the UAE for at least one year:
Documents required for Companies to get a tax residency certificate in Dubai are
- A copy of the trade license and partners’ attachments
- A copy of MOA (Memorandum Of Association
- A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
- A certified copy of the audited financial accounts
- Validated Bank statement for 6 months
- A certified copy of the lease agreement
- The establishment contract certified by official authorities (if it is not a sole company)
- The organizational structure of the company ( if it is not a sole company)
For Individuals
To apply for a tax domicile certificate individuals must have been a resident in the UAE for at least 180 days. The certificate is not granted to non-residents.
The documents required for individual tax residency certificate in Dubai are
- A copy of Passport and Emirates ID
- Valid residence permit
- A certified copy of the (residential) lease agreement / Tenancy contract
- Bank statement for 6 months
- Salary certificate / Income certificate
- A report from the General Directorate of Residency and Foreigners Affairs mentioning the duration of the person’s stay in UAE (Minimum 180 days)
- Tax forms (if any) from the country where the certificate needs to be submitted
For Investors
For Housewives
Fees for Tax Residency Certificate in Dubai
For Individuals
For Companies
TRC for Treaty Purposes
- Submission fee: AED 50
- For commercial activities and tax registrants: AED 500
- For non-tax-registered individuals: AED 1,000
- For non-tax-registered legal entities: AED 1,750
TRC for Domestic Purposes
- Submission fee: AED 50
- For tax registrants and commercial activities: AED 500
- For non-tax registrants’ natural persons: AED 1,000
- For non-tax registrant legal entities: AED 1,750
- Commercial Activity Certificate: AED 500
- Printed Certificates: An additional AED 250 for hard copies
- For duplicate, damaged, or missing original certificates: A total of AED 103 (AED 100 + AED 3 for processing).
- All fees must be paid using the e-Dirham Card
UAE Tax Residency Test
- The individual has physically resided in the UAE for at least 183 days within the last 12 months
- The person’s center of financial and personal interests is located in the UAE, or they satisfy another condition specified by the Ministry
- Over a 12-month period, the individual has been physically present in the UAE for at least 90 days and meets one of the following conditions:
- Is a UAE citizen or resident, or a GCC national
- Owns a permanent residence in the UAE
- Is employed or operates a business within the UAE
For legal entities, such as companies or establishments, the tax residency status under the Resolution is determined if the entity is:
- Established, formed, or registered according to UAE law (this does not include branches of foreign legal entities).
- Recognized as a tax resident under UAE tax law
Benefits of Tax Residency Certificate in Dubai
Investors in Dubai can considerably benefit from their access to the international market after company formation in Dubai. The benefits of being a Tax Resident in Dubai are many and include
Leverage Double Taxation (DTA) Avoidance
Enhance Import-Export Operations
Legal Validation
Boost Credibility and Transparency
Ease and strengthen cross border business relationship
Bottom Line
Effective tax planning with a multidisciplinary approach backed by strong business knowledge, accounting and finance structures and prevailing tax rules are must get the maximum benefits out of the tax residency certificate in Dubai. Considering this fact It is always prudent to outsource one of the best professional and experienced PRO services in Dubai for this purpose.
FAQs
Q1. What is the tax residency certificate in Dubai?
Q2. What is the purpose of the tax residency certificate in Dubai?
Q3. What is the validity of TRC?
Q4. Is the Tax Domicile certificate applicable for the UAE offshore companies?
Q5. What are the requirements for the TRC?
Q6. What documents are required for companies?
Q7. What documents are needed for individuals?
Q8. How long does it take to obtain a TRC in Dubai?
It usually takes 4 to 5 working days for pre-approval processing and 5 to 7 working days for the issuance of a tax residency certificate in Dubai once approval is made.
