Avoid Double Taxation – Get A Tax Residency Certificate (TRC)

Tax Residency Certificate (TRC) which is also known as the Domicile Certificate and is issued to the individuals and companies to exempt the applicants from double taxation.

TRC which is issued for a period of one year is beneficial for both the individuals and companies as courtesy they don’t have to pay tax in their home country by taking the benefit double taxation avoidance agreement.    

Tax Residency (Domicile) Certificate

What is Double taxation avoidance agreement (DTT)?

This is an agreement treaty between two countries to ease tax during the process of import and export and also for other taxes like the income tax, inheritance tax, VAT and many more. Double taxation is the doctrine by which a person or an organization pays tax to two countries on the same income. Let’s say if a person is doing business in UAE he will pay Tax in UAE and the other to the resident country.

The UAE has the authority to issue a tax residency certificate for permanent residents and companies and frees them from paying taxes in both countries as it has signed the taxation treaty with 117 countries. Saudi Arabia was the first GCC country with which UAE had signed a double taxation avoidance agreement was back in the year 2018.

Change of issuing Authority

Till recently these certificates were issued by the Ministry of Finance but in November 2020, the authority responsible for issuing these was changed and now these are being issued by Federal Tax Authority. The individuals who have been residing in UAE for a minimum of 180 days or those who have a UAE residence visa can apply for the TRC.

Documents required for an individual

Following documents need to be submitted by an individual if he/she requires a Tax Residency Certificate.

• Passport copy
• Copy of the UAE residency visa
• Emirates ID Copy
• Copy of the certified residential lease agreement or tenancy contract
• Latest salary certificate
• Past 6 months bank statement
• Report from the General Directorate of Residency and Foreign Affairs confirming and specifying the number of days the applicant has resided in UAE
• Tax forms (if any) from the country to where the certificate must be submitted

Documents required for an individual:

• Company trade license copy
• Establishment contract certified by official authorities this is not required if its a sole proprietorship company
• A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
• Passport copy of the shareholders and the manager
• Copy of the Shareholders and manager’s residence visa
• Emirates ID Copy of both the shareholders and manager
• Audit report/ financial statements which are certified
• Past 6 months bank statement of the company which are validated
• Copy of the company lease agreement or tenancy contract
• Tax forms (if any) from the country to where the certificate must be submitted

If you have any query related to how to avoid double taxation then feel free to call +971 4 4542366 today for a quality consultation or please send inquiry to info[at]flyingcolour[dot]com.

Please Note: This article was published on 22nd April 2021. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.