Tax Residency (Domicile) Certificate

What is a Tax Residency Certificate (TRC)?

A tax residency certificate, also known as Domicile certificate, is a certificate issued by the International Financial Relations and Organizations Department so that the eligible government entities, companies and individuals can take advantage of agreements of double taxation avoidance agreements (“DTAA”) entered into signed by the UAE.

What is Double Taxation Avoidance Agreement (“DTAA”)?

Businesses in today’s era have been spread across the world.  The tax regime of all the Countries is either residence based or source- based. Due to such regime, many a times, business end up paying double taxation on the income earned by them, firstly in the country where is the income is earned i.e. source based taxation and secondly in the country in which the company is resident i.e. residence-based taxation. To ensure that these businesses do not face such hardship and end up paying double the tax that they should pay, countries all around the world have entered into Double Tax Avoidance Agreement (DTAA) with each other. When two countries have a signed DTAA between them, their residents and investors can claim the benefits of the agreement after obtaining the tax residency certificate.

Who can obtain Tax Residency Certificate?

Individuals

A person who has stayed in the UAE for a minimum of 180 days, can apply for tax residency certificate. Non-residents cannot apply.

Documents required

• Copy of Passport and Visa (Please note that passport & Visa should be valid for at least 180 days from the date of submission of documents)
• Copy of Emirates ID
• Valid residence permit
• A certified copy of (residential) lease agreement (Please note that it should be valid for from the date of submission of documents)
• Validated 6-month statement from a local bank- Should be stamped by the Bank
• 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 i.e. Immigration Report
• Tax forms (if any) from the country where the certificate needs to be submitted
• Payment for the application fees of AED 2,000 + AED 3 through the e-Dirham card

Companies

Companies that have operated in the UAE for at least a year can apply for tax residency certificate.

Documents required

• Copy of the trade license and partners’ attachment
• Establishment contract certified by official authorities (if it is not a sole company)
• Copy of the company’s owners/partners/directors’ passports, Emirates IDs and permits of residence
• Certified copy of the audited financial accounts
• Validated 6-month bank statement
• Certified copy of the lease agreement (Please note that it should be valid for from thedate of submission of documents)
• Physical office space not a flexi desk
• Organizational structure of the company (if it is not a sole company)
• Application fees of AED 10,000 + AED 10 should be paid by the applicant through e-Dirham Card

FAQs?

• How much time does it takes to obtain a Tax residency Certificate?

Generally, it takes 2 -5 working days for Pre-approval processing and further  5-7 working days for the issuance of TAX Residency Certificate once it is approved.

• Can everyone based in UAE obtain a Tax residency Certificate?

All individuals and onshore and free zone companies are allowed to claim the Tax Residency Certificate subject to the fulfillment of above specified conditions. However, the Offshore Companies are not eligible to obtain the Tax residency certificate as they are not considered to be residents of the country.

• For how long the Tax residency Certificate is valid?

UAE Tax Residency Certificate TRC is valid for a period of one year from the date of its issue. Once the validity of a certificate expires a new certificate can be requested.

• In which language the Tax residency Certificate is issued?

UAE TRC can be issued either in English or in Arabic.

• Can Tax residency certificate after obtaining from the UAE can be used as in the Home country.

No, for Tax Certificate to be accepted by authorities in your home country, you will need to legalize the document in the Ministry of Foreign Affairs of UAE. Cost of legalization is AED 150 (USD 41) for individual documents and AED 2,000 (USD 548) for documents associated with corporate entities.

• Does UAE has DTAA will all the Countries in the World?

No, till date UAE has entered into DTAA with specific countries only.

For any other queries, you can contact us on the undermentioned details and will be delighted to assist you in obtaining the Tax Domicile Certificate as well as to advise you on the process.