What is Tax Residency Certificate or Tax Domicile Certificate in UAE ?

Tax Residency Certificate or Tax Domicile Certificate in UAE

Tax Residency Certificate or Tax Domicile Certificate is issued by the Ministry Of Finance (MoF). Corporate individuals can apply for Tax Domicile Certificate in UAE to avoid double taxation. In order to ensure this there is an agreement signed by different countries, it is called DTAA (Double Taxation Avoidance Agreement). Once it is signed by two countries, it is mandatory to issue the Tax Domicile Certificate to the eligible applicant by the Tax Authority.

The validity of the Tax Domicile Certificate in UAE is one year from the date of issued. Corporates and individuals can use the certificate for one specific country at a time and they can have multiple certificates as such.

What is tax residency certificate?

Tax Residency Certificate or Tax Domicile Certificate is issued by the Ministry Of Finance (MoF). Corporate individuals can apply for Tax Domicile Certificate in UAE to avoid double taxation. In order to ensure this there is an agreement signed by different countries, it is called DTAA (Double Taxation Avoidance Agreement).

How to get a Tax Residency Certificate or Tax Domicile Certificate in UAE?

For individual:

Only a resident can apply for the Tax Residency Certificate or Tax Domicile Certificate in UAE if he/she has stayed in the country (UAE) for a minimum period of 180 days.

Time For Application:

Once the Tax Residency Certificate or Tax Domicile Certificate in UAE is applied, it will take 3-5 days to get the certificate.

Documents required for Individuals to get a Tax Residency Certificate or Tax Domicile Certificate in UAE

• A copy of Passport and Emirates ID
• Valid residence permit
• A certified copy of the (residential) lease agreement / Tenancy contract
• Bank statement for 6 months
• Salary certificate / Income certificate
• A report from the General Directorate of Residency and Foreigners Affairs mentions the duration of the person’s stay in UAE (Minimum 180 days)
• Tax forms (if any) from the country where the certificate needs to be submitted

For Companies,

All the companies which have registered and operated in the UAE for a minimum of one year can apply for a tax residency certificate.

Time For Application:

Once the Tax Residency Certificate or Tax Domicile Certificate in UAE is applied, it will take 3-7 days to get the certificate.

Documents required for Companies to get a Tax Residency Certificate or Tax Domicile Certificate in UAE

• A copy of the trade license.
• A copy of MOA (Memorandum Of Association
• A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
• Lat year audit statement
• Bank stamen for 6 months.
• A certified copy of the lease agreement
• The organizational structure of the company (if it is not a sole company)

Importance of Tax Residency Certificate or Tax Domicile Certificate in UAE

Tax Residency Certificate or Tax Domicile Certificate in UAE is an official document issued by the government of the resident country to prove that an individual or corporate entity is residing in the country. Banking authorities, financial institutions and other departments are considering Tax Residency Certificate or Tax Domicile Certificate as the proof of tax residency in the country of residence.

Users of Tax Residency Certificate or Tax Domicile Certificate

Tax is one of the major sources of income for government across the globe tax rules. Aa a result, financial institution, especially banks require Tax Residency Certificate or Tax Domicile Certificate of their customers. Moreover, tax authorities have sharpened their rules as to when tax treaties can be applied. Tax Residency Certificate or Tax Domicile Certificate is the ultimate proof to show you or your establishment that you are the tax resident in the country of residence.

In the UAE mainly there are three types of companies, that are Mainland companies, Free zone companies and Offshore companies (also called International Business Companies – IBC). Out of this three, Mainland companies and free zone companies can use the benefits of Tax Residency Certificate or Tax Domicile Certificate, but Offshore companies are not entitled to the tax treaty benefits and cannot receive such certificates. However, to get the benefit of tax residency, offshore companies can apply for a tax exemption certificate

What is Double Taxation Treaty (DTT)?

Double Taxation Treaty is an agreement that is signed between countries to avoid tax during international trade activities. Many countries have entered this agreement to avoid tax for import-export, income tax, Value Added Tax etc. However, the Tax Residency Certificate or Tax Domicile Certificate can consider as double tax avoidance agreement. The first double taxation avoidance agreement was signed between the United Arab Emirates and France. Since then, the Emirates, including Dubai, have signed 92 double taxation treaties with countries across the world.

The list of double taxation avoidance agreements includes Albania, Algeria, Armenia, Austria, Azerbaijan, Andorra, Belarus, Benin, Belize, Bangladesh, Bermuda, Barbados, Bosnia and Herzegovina, Belgium, Mauritius, Canada, Bulgaria, China, the Czech Republic, Egypt, Estonia, Ethiopia, Cyprus, Finland, Fiji, Georgia, Gambia, New Guinea, Germany, Greece, Hong Kong, Italy, India, Ireland, Japan, Kazakhstan, Kyrgyzstan, Kenya, Indonesia, Lebanon, Luxembourg, Latvia, Liechtenstein, Lithuania, Malaysia, Macedonia, Malta, Mongolia, Montenegro, Morocco, Mauritius, Mauritania, Mozambique, Mexico, the Netherlands, New Zealand, Nigeria, Pakistan, Philippines, Poland, Portugal, Palestine, Panama, Romania, Russia, Seychelles, Singapore, Senegal, Switzerland, Spain, Serbia, Slovenia, Slovakia, Sri Lanka, South Korea, South Africa, Sudan, Syria, Tajikistan, Thailand, Turkmenistan, Tunisia, Turkey, New Zealand, Ukraine, Uzbekistan, Uruguay, Uganda, Venezuela, Vietnam, Yemen.

Benefits of Getting Tax Residency Certificate or Tax Domicile Certificate in UAE

Investors in the UAE enjoy the best experience of business and access to the international market. The following points can be considered as the benefits of having a Tax Residency Certificate or Tax Domicile Certificate

• Avoidance Of Double Taxation
• It can show the status of an individual or corporate in the country
• An individual can avoid Income Tax
• It can remove the huddles of tax for import and export
• It can promote international business and it will strengthen the relationship between countries
• Both individual and corporate can apply for the certificate
• Individuals and corporates can have a separate certificate for specific courtiers.

Our experienced and qualified professionals can support and guide you in getting the Tax Residency Certificate or Tax Domicile Certificate without any hassle.

For Tax Residency or Tax Domicile Certificate (TDC)

Mr. Viju
Email: viju@emiratesca.com 
Mobile: +971554028899