FAQ – Tax Residency Certificate

ALL YOU NEED TO KNOW ABOUT TAX RESIDENCY CERTIFICATE – UAE

What is – Tax Residence Certificate?

A Tax Residence Certificate is an official document issued by the UAE Ministry of Finance. It is used to establish the country of tax residence for a legal entity or a company. The certificate can be issued to either a company registered in the UAE or an individual living here. The certificate has a year’s validity and needs to be renewed. Substantiating the applicant’s formal status as a UAE resident in respect to a particular Double Taxation avoidance agreement (DTT) amongst the UAE and a specific foreign dominion.

– It helps applicants avoid paying taxes in two or more countries.

– It proves that the applicant is residing in the UAE.

– It makes the process of cross-border trade and investment easier.

– It helps diversify the economy.

– It encourages development in the UAE.

What is – Tax Residence Certificate intended for?

A Tax Residence Certificate is the essential document in backing an application to look for the benefits of a Double Taxation – DTT. It supports the government in knowing which country a person is a tax resident of. This is obligatory mainly for those who earn incomes from two or more countries. It is crucial as it safeguards that one does not break any laws and face legal ramifications.

If a person doesn’t apply for a tax residency certificate, they could be forced to pay the tax for all the countries they function in. Failure to make the payment could be counted as tax evasion and may result in asset confiscation and imprisonment.

A person can be a tax resident in one country, and it has to be noted that it does not continuously exempt them from taxes in other countries. For example in some countries tax income is earned by foreigners regardless of where their tax residence is.

Can an individual obtain a Tax Residence Certificate?

Individuals can apply for the certificate by themselves subject to meeting the conditions applicable at the time. However, this can be a time-consuming process. Submit the documents to us, and we will handle the rest for the application process on your behalf. We are equipped with systematic knowledge of the process and shall be delivering the certificate within a short span.

To apply for a tax residency certificate, individuals will require to submit the following:

– Emirates ID copy;

– Passport copy and valid visa copy issued at least 180 days earlier;

– 6 months personal UAE bank statements, stamped by the bank;

– Source of income in UAE, e.g., Employment agreement, share certificate, salary certificate;

– Immigration GDRF Report (report for evidencing all entries into and exits out of the UAE);

– Certified tenancy contract copies or title deed; valid for at least three months prior to application;

Can a corporate entity entitle to obtain the Tax Residence Certificate?

Corporates can apply for the certificate subject to meeting the conditions applicable at the time. The point to note is “The Ministry of Finance” does not issue Tax Residence Certificates for offshore companies as the latter are considered non-resident corporate entities for tax purposes.

For a company tax residency certificate, the requirements are as followed:

– Passport, valid visa copy, and Emirates ID of the company Director/ Manager;

– Valid trade license copy;

– Certified tenancy contract copy or title deed; valid for at least three months prior to application; physical office space is mandatory (not flexi desk);

– A latest certified audited financial statement or last 6 months company UAE bank statements; stamped by the bank;

Procedure to apply?

An online account for the applicant is created on the MoF gateway to be filled out and uploaded alongside the supporting documents for review and approval by the MoF. Once the approval is received, the amount is paid electronically and the certificate is generated and available for collection at Ministry or couriered to a domestic address. This process takes about 2-4 weeks.

How can we help?

We are a multi-services platform catering to a broad spectrum of clients – from individual entrepreneurs and local SMEs to, to established blue-chip companies and multinationals. Our one-stop-shop offering is unique in the Middle East: a holistic and cross-disciplinary combination of a market-leading corporate services firm, a law firm’s specialist expertise and a regulatory & compliance services practice, all through one single platform. We have broad experience in assisting clients with interests in securing a tax residence and domicile certificate. For all your tax residency requirements for both individuals & corporates, contact us right away!

 

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