Tax Residency Certificate (TRC) also known as Tax Domicile Certificate is an official document issued by the Tax Authorities in the UAE. It was being issued by the Ministry of Finance (‘MoF’) till 11 November 2020. According to Cabinet Resolution No. (65) of 2020, from 14 November 2020, Tax Residency Certificate / Tax Domicile Certificate shall be issued by the Federal Tax Authorities (‘FTA’) on an application made by the resident (Individual or incorporated entity) of UAE.
The necessity for a Tax Residency Certificate or Tax Domicile Certificate in the UAE:
In the UAE, the Tax Residency Certificate or Tax Domicile Certificate shall be issued by the FTA from 14 November 2020 to eligible government entities, other legal person and individuals. According to our understanding, Resident individuals and Mainland / Free Zone entities in the UAE are eligible to apply for the Tax Residency Certificate or Tax Domicile Certificate in the UAE. Offshore companies may not be eligible to apply for TRC in UAE, as they may not have a physical presence in the UAE.
Tax Residency Certificate or Tax Domicile Certificate, issued by a Statutory Authority (in UAE – FTA), is the undisputed document to prove that an entity is a resident of a Tax Residency Certificate or Tax Domicile Certificate issuing country. Tax Authorities across the globe accept Tax Residency Certificate or Tax Domicile Certificate as a reliable document to substantiate the residency of an entity.
This allows the entity to justify the applicability of provisions of DTAAs. Entities can consider tax planning and restructure their business/transactions considering the provisions of DTAA. Favourable provisions of Withholding Tax and Permanent Establishment provides ample opportunity for the businesses to plan tax-efficient structures.
With the purpose of promoting its development goals, the UAE concluded 115 DTAA with most of its trade partners. Thus, there is ample opportunities for tax planning if the residency status is certain for the applicant.
Tax Residency/Tax Domicile Certificate UAE
Emirates Chartered Accountants Group - Tax Residency/Tax Domicile Certificate Advisory Services in Dubai, UAE.
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The validity of the Tax Residency Certificate or Tax Domicile Certificate is one year from the date of issue. Corporates and individuals can use the Tax Residency Certificate or Tax Domicile Certificate for one specific country at a time. Application for multiple certificates, if required, can also be made.
Obtaining a Tax Residency Certificate or Tax Domicile Certificate in the UAE requires having a registered user on the ministry website. Which implies that one needs the following:
An Individual residing and working in the UAE for at least 183 days, can make an application for Tax Residency Certificate or Tax Domicile Certificate
Documents Required for Tax Residency Certificate or Tax Domicile Certificate
The Legal person operating in the country for at least one year can make an application for the Tax Residency Certificate or Tax Domicile Certificate.
Cabinet Resolution No. (65) of 2020, specifies the fee for the application for and issuance of Tax Residency Certificate / Tax Domicile Certificates as under:
|Sr. No||Service Description||Fee Before 14/11/2020 (AED)||Fee After 14/11/2020 (AED)|
|1||Submission of application for a Tax Residency Certificate||100 +3 per Application||50 / Application|
|2||Review of Tax Residency Certificate application and issuance of an electronic certificate to a registrant with the Authority||10,000 or 2,000 depending on the Status||500 / Application|
|3||Review of Tax Residency Certificate application and issuance of an electronic certificate to a legal person not registered with the Authority||10,000 + 3 Per Application||1,750 / Application|
|4||Review of Tax Residency Certificate application and issuance of an electronic certificate to a natural person not registered with the Authority||2000 + 3 per Application||1,000 / Application|
|5||A printed paper copy of the issued electronic Tax Residency Certificate||N.A.||250 / Certificate|
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