Why Hold a Tax Residency Certificate in UAE?

June 21, 2021Dated:  | |

Tax Residency Certificate, also called as Tax Domicile Certificate is an official certificate issued by the Ministry of Finance to evidence the formal status of an applicant as a resident of UAE. It is issued in respect to a Double Taxation Avoidance Agreement (DTAA) the country has signed with a specific foreign jurisdiction, to save investors from getting taxed in two countries at the same time.  Once it is thus signed by the two countries, a Tax Domicile Certificate is issued by the Tax Authority, and the applicant is excepted from the burden of double taxation. The Tax Residency Certificate in UAE is valid up to one year from the date it is issued.

For an individual to get a Tax Residency Certificate, the applicant should be permanently residing in the UAE for a minimum of 180 days or should hold a UAE residency visa, and must have with them:

  • Copy of Emirates ID
  • Passport copy
  • Copy of valid UAE residence visa/ permit
  • Certified bank statement for six months
  • Certified tenancy contract or lease agreement
  • Latest income/salary certificate
  • The report from the General Directorate of Residency and Foreign Affairs specifying the duration of a person’s stay in the UAE (Minimum requirement of 180 days)
  • If applicable, tax form from the country where the certificates are to be submitted

For a company to get  a Tax Residency Certificate, it should be inside UAE for a minimum of one year, and must submit:

  • Copy of valid trade license
  • Copy of the IDs of company owners or partners, or directors.
  • Copy of passports of company owners or partners, or directors.
  • Copy of the Residence Visa of company owners or partners, or directors.
  • Copy of an MOA(Memorandum of Association)
  • Latest audit report.
  • Certified bank statements for 6 months.
  • Certified tenancy contract or lease agreement
  • Company organizational structure certified by official authorities (if not a sole company)
  • If applicable, tax form from the country where the certificates are to be submitted

Once the Tax Residency Certificate in UAE is applied, it will take 3-7 days for the applicant to receive them. However, the certificate is not Applicable to International  Business Companies (Offshore Companies)

Benefits of holding a Tax Residency Certificate of Tax Domicile Certificate include:

  1. Avoids double taxation by utilizing the provisions of the Double Taxation Treaty (DTT).
  2. Tax Residency Certificate is considered as proof of tax residency by various financial institutions in the country of residence.
  3. Investors have easy access to international markets.
  4. Lessen the financial burden
  5. Tax for import and export are made less complex
  6. Corporate and individuals have separate certificates

Helps display the corporate/individual status in the country

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