Dubai Tax Residency Certificate: Everything You Need To Know

Dubai Tax Residency Certificate: Everything You Need To Know

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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 Organisations 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

To obtain a Tax Residency Certificate or Tax Domicile Certificate in the UAE, eligible government entities, legal persons and resident individuals can apply to the FTA from 14 November 2020. Mainland and Free Zone entities are also eligible to apply for the certificate. However, offshore companies may not be eligible to apply for TRC in the UAE since they do not have a physical presence in the country.

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

The Tax Residency Certificate or Tax Domicile Certificate is generally issued within 3-5 days for individuals and 3-7 days for companies after the submission of a complete application.

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

The validity of the tax residency certificate in Dubai is one year from the date of issue. Corporates and individuals can use the Tax Residency Certificate also known as Tax Domicile Certificate for one specific country at a time. Application for multiple certificates can also be made based on specific requirements.

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

  1. A copy of the trade license and partners’ attachments
  2. A copy of MOA (Memorandum Of Association
  3. A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
  4. A certified copy of the audited financial accounts
  5. Validated Bank statement for 6 months
  6. A certified copy of the lease agreement
  7. The establishment contract certified by official authorities (if it is not a sole company)
  8. 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

  1. A copy of Passport and Emirates ID
  2. Valid residence permit
  3. A certified copy of the (residential) lease agreement / Tenancy contract
  4. Bank statement for 6 months
  5. Salary certificate / Income certificate
  6. A report from the General Directorate of Residency and Foreigners Affairs mentioning the duration of the person’s stay in UAE (Minimum 180 days)
  7. Tax forms (if any) from the country where the certificate needs to be submitted
For Investors
The company license in addition to partners’ names should be attached including any previously mentioned documents.
For Housewives
The application should accompany a copy of Marriage Certificate plus a copy of passports and permits of residence for the married couple including the salary certificate and employment contract of the husband. Any other documents related to the husband and submitted previously must also be attached.

Fees for Tax Residency Certificate in Dubai

For Individuals

100 Dirhams plus 3 Dirhams, paid through e-Dirham Card for application submission and 2,000 Dirhams plus 3 Dirhams paid through e-Dirham Card for issuance of cards.

For Companies

For applying, 100 Dirhams plus 3 Dirhams paid through e-Dirham Card and for issuing the certificate, 10,000 Dirhams plus 3 Dirhams, paid through e-Dirham Card.

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
Additional Charges
  • 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
This streamlined format clarifies the application criteria, processing times, and fees associated with obtaining a Tax Residency Certificate in Dubai.

UAE Tax Residency Test

An individual is considered a tax resident of the UAE under the resolution if they meet any of the following criteria:
  1. The individual has physically resided in the UAE for at least 183 days within the last 12 months
  2. The person’s center of financial and personal interests is located in the UAE, or they satisfy another condition specified by the Ministry
  3. 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:
    1. Is a UAE citizen or resident, or a GCC national
    2. Owns a permanent residence in the UAE
    3. 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
The Federal Tax Authority (FTA) is responsible for implementing the new tax residency test and for issuing Tax Residency Certificates (TRCs) in accordance with these guidelines. It is important to note that the process and documentation requirements for obtaining a TRC may undergo significant modifications. For those seeking to understand the new statutory definition or to obtain a TRC, consulting with a leading tax adviser in the UAE is highly recommended.

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

The UAE has established double taxation avoidance agreements (DTAAs) with numerous countries. By obtaining a Tax Residency Certificate (TRC), you can access the benefits of these agreements, preventing the same income from being taxed both in the UAE and your home country.

Enhance Import-Export Operations

A Tax Residency Certificate enables tax exemptions and additional benefits for your import and export activities, enhancing your business’s competitiveness and profitability.

Legal Validation

The Tax Residency Certificate acts as recognized proof of your tax residency in the UAE, useful for activities like opening bank accounts or meeting regulatory reporting requirements.

Boost Credibility and Transparency

Possessing a TRC affirms your adherence to UAE tax regulations, enhancing your business’s credibility and transparency with partners and potential investors.

Ease and strengthen cross border business relationship

The Tax Residency Certificate facilitates international business by enhancing cross-border relationships. It is available for both individuals and corporates, allowing each to obtain separate certificates.

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?
Tax Resident certificate (TRC), also known as Tax Domicile Certificate (TDC) is an official document issued by the Ministry of Finance of UAE to either a Company or an Individual with UAE residency visa / permanently residing in the UAE for a minimum of 180 Days.
Q2. What is the purpose of the tax residency certificate in Dubai?
The TRC offers tax advantages of the Double Taxation Avoidance Agreements (DTAA) signed by the UAE with more than 76 Countries in the World where foreign-sourced income is not subjected to double taxation.
Q3. What is the validity of TRC?
The certificate is valid for one year from the date of its issue.
Q4. Is the Tax Domicile certificate applicable for the UAE offshore companies?
No, the TRC alias TDC is not Applicable to Offshore Companies or International Business houses.
Q5. What are the requirements for the TRC?
Documents are required for Tax Residency Certificate and depend on the type of Application viz. a company or an individual.
Q6. What documents are required for companies?
The documents required are Valid company Trade License Copy, Passport Copies of shareholders & Manager Copies of Residence Visa, Shareholders’ and the Manager’s Emirates ID, Certified copy of the latest audited financial Statement and Audit Report, Latest and validated 6-month Company bank statement, Certified copy of Company lease agreement or Tenancy Contract and Tax forms, if any from the country of origin.
Q7. What documents are needed for individuals?
The documents required for individuals are Passport Copy, the UAE Residence Visa Copy, Emirates ID Copy, a certified copy of residential lease agreement or Tenancy Contract Copy, latest Salary certificate and validated last 6-months bank statement, a report from the General Directorate of Residency and Foreigners Affairs specifying the number of days the resident has been staying in the UAE, applicable tax forms from the country in which the TDC is to be submitted.
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.

Q9. What happens if the tax Residency certificate in Dubai is lost or damaged?
For lost, damaged, or an extra copy of origin you have to pay 100 Dirhams for issuing a replacement of lost, damaged or copy of original certificate plus 3 Dirhams, paid through e-Dirham Card.
Q10. Do I need a residential address in Dubai?
Yes, a residential address in Dubai is mandatory.
Q11. Are foreign bank statements acceptable?
No, a UAE bank personal account is mandatory and should be held for a minimum of 6 months.
Q12. Can I get a backdated certificate?
Yes, you can get one provided there is documented evidence of holding a valid bank account, a residential address and staying in Dubai during that period.

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