Obtaining a UAE Tax Residency Certificate might seem daunting, but it’s simpler than it sounds. A TRC can offer numerous benefits, from avoiding double taxation to enjoying tax treaties between the UAE and other countries.
Anyone can avail of the advantages that TRC offers whether you’re a foreign investor, an expat, or a business owner. The question arises how exactly can you obtain this vital document?
The right time needs the right approach. The guide is a perfect example of it. We’ll break it down into a step-by-step process that ensures you understand the entire process without any hassle. The article contains details, like:
- What is a tax certificate and its validity
- Process for tax residency certificate in UAE
- Documents Required, costs, and, benefits of having It
- UAE Gate, partner to obtain TRC certificate
Let’s move on to details and get started with us!
What is a Tax Residency Certificate (TRC)?
A Tax Residency Certificate Dubai is an official document. A TRC is issued by the tax authorities of a country. The document confirms that an individual/business is a tax resident of that country. A TRC is used to claim tax benefits and avoid double taxation in the UAE. Essential for individuals and businesses with international income or cross-border transactions.
Want to start your business in UAE? We have several articles related to this topic. You can check it out on our website with different business ideas in UAE.
Importance of Tax Residence Certificate UAE
Across the UAE, a Tax Residency Certificate is crucial for individuals and businesses. Especially ones that are looking to benefit from the country’s network of tax treaties with other nations. It avoids double taxation by proving that the taxpayer is a resident of the UAE. This ensures they are only taxed in one jurisdiction.
UAE tax certificate is valuable for expatriates, investors, and companies with international income. It can significantly reduce withholding tax rates and simplify tax filing in multiple countries. The TRC enhances financial efficiency and ensures compliance with global tax laws.
Learn about UAE Labour law and employment contracts UAE and more. All on the same platform brought to you by UAE Gate.
Types of TRC in UAE & its Eligibility Criteria
TRC for Natural Person
For a natural person, a TRC is issued to individuals who are residents of the UAE for tax purposes. The eligibility criteria require individuals to be physically present in the UAE. He/she should be presented for at least 183 days within a 12-month period.
TRC for Legal Person
For a legal person, a TRC applies to businesses or entities registered in the UAE. To be eligible, the company must be incorporated into the UAE. They must conduct substantial business activities in the country. Demonstrating that it is not a tax resident in any other jurisdiction.
Validity of Certificate
In Dubai, the tax residence certificate has a one-year validity. The period started from the date of issue. The Tax Residency Certificate is commonly known as the TRC. It can be used by corporations and individuals. Note that, additional certificate applications can also be filed. However, it depends on unique needs. Further, tax residency certificates are not available to offshore corporations. They should get a tax exemption certificate.
Process for Obtaining Tax Residency Certificate in UAE
To obtain a tax residency certificate, the applicant must complete an online process. The steps have been discussed below:
- Create an account on the Federal Tax Authority’s website.
- Complete the form to apply.
- Use digital formats like PDF or JPEG to upload required paperwork
- Required fees must be paid online upon application approval.
- Lastly, certificates are issued and sent to the registered address through express courier.
See More: Tax Free Dubai 2024: All You Need To Know
Documents Required
The key records must be presented to receive a tax residency certificate. These documents differ for various parties. Have a look at the needed documents:
For Individuals
Individuals are required to provide the following documents to apply for a tax residency certificate:
- Salary Certificate
- A confirmed bank statement from the previous six months.
- A certified copy of the lease agreement or a copy of the tenancy contract
- A copy of your passport
- Copy of your UAE residence visa
- Your Emirates ID copy
- The GDRFA of the UAE has released a report tracking all entrances and exits.
For Companies
The following are the prerequisites for obtaining a UAE tax residency certificate:
- A company’s Certificate of Incorporation copy
- The organizational chart of the corporation.
- A copy of the directors’, shareholders’, or managers’ passports. A copy of their valid UAE residency visa.
- The company has been operated for at least one year and holds a valid UAE trade license.
- A Memorandum of Agreement for the firm copy
- A UAE firm’s most recent certified audited financial accounts or bank statements for the last six months. It must stamped by the bank.
Looking to form your organization in the UAE? We have multiple guides available on company formation in the UAE. Also, explore how the country enjoys a tag as a Tax-free Dubai due to its tax benefits to its residents.
For Investors
The company license, the partner names, and any other documents indicated earlier should be included.
For Housewives
The request should be accompanied by a marriage certificate copy. It should also include copies of the marital couple’s passports and residency permits. Further, the partner’s wage certificate and work contract. Note that, additional documents about the husband that were previously supplied should be included.
Time Duration
The pre-approval procedure of obtaining a TRC certificate takes 4-5 days. However, once accepted, the UAE TAX Residency Certificate will be issued within 5-7 working days.
Advantages and Disadvantages of Tax Residency Certificate
A table outlining the advantages and disadvantages of obtaining a TRC in the UAE:
| Advantages | Disadvantages |
| A TRC allows individuals and businesses to avoid being taxed on the same income in multiple countries. | The application process for obtaining a TRC can take time, which may delay its benefits. |
| TRC holders can benefit from favorable tax treaties between the UAE and other countries. | To get a TRC, applicants must provide evidence of physical presence and residency in the UAE, which may require detailed documentation. |
| With a TRC, individuals and businesses may qualify for reduced tax rates on income from investments, royalties, or other sources. | There may be costs involved in applying for a TRC, including government fees and possibly legal or administrative costs. |
| Holding TRC signals to other nations and businesses that you are compliant with tax regulations, improving your international standing. | Not all individuals or companies qualify for a TRC; certain residency requirements must be met. |
| A TRC helps in ensuring compliance with international tax laws and preventing legal issues in case of audits. | The TRC only applies to tax-related matters and may not help with other financial or legal situations. |
| Having a TRC can make tax filing in both the UAE and other countries smoother, especially in countries with a tax treaty with the UAE. | A TRC may need to be renewed periodically, which can add to the administrative burden. |
Tax Residency Certificate UAE Cost
For tax registrants and commercial activity, AED 500 is charged. On the other hand, AED 1000 for non-tax registrants’ natural people. For non-tax registrant legal, the cost of AED 1750 per person has been charged.
Essential Tips for a Smooth TRC Application Process
Here are some essential tips to ensure a smooth TRC application process:
Accurate Information
Double-check all details on your application, including personal and financial information, to avoid delays or rejections.
Timely Submission
Submit your TRC application well in advance of any deadlines, as processing times can vary. Being early ensures you meet tax obligations without stress.
Clear Documentation
Provide all required documents, such as proof of residency and income details, to make your application process seamless and fast.
Stay Updated
Keep up to date with any changes in regulations or procedures related to TRC applications, as tax rules can evolve.
Consult a Tax Professional
If you’re unsure about any aspect of the TRC application, consider seeking advice from a tax professional to navigate the process efficiently and ensure compliance.
Why Choose UAE Gate for Tax Residency Certificate?
Seeking to obtain professional tax advice and guidance for your company’s governance? This is following the tax rules? The UAE Gate has solutions for your every problem. Our efficient tax strategy provides an impartial overview of the business model and individual factors. We hired a team that understands well about local taxes and their implications. A chance for you to validate taxes under the supervision of experts.
From obtaining a UAE tax residency certificate to a tax domicile certificate in UAE, we cater to both. The aim is to make your job easier by getting the relevant documents and certifications to finish the TRC procedure on time. Get yourself connected with professionals and know how we can make a difference!
