Tax Residency Certificate (TRC) also called as the Domicile Certificate is issued to individuals and companies to exempt the applicants from double taxation & to take advantage of agreements of double taxation avoidance on income signed by the UAE.
The Tax Domicile certificate is issued by the Ministry of Finance of UAE. The certificate can be issued to a company registered in the UAE and also for individuals who are residing in the UAE. The Tax residency certificate is valid for one year from the date of its issue. Once payment has been processed, a certificate will be issued within 3 working days.
Residency for tax purposes is a well-known concept for entrepreneurs in the UAE. Tax or fiscal residency is a set of regulations that vary from jurisdiction to jurisdiction and are mandatory to be strictly followed. They predetermine the taxes you have to pay, as well as the country they have to be paid to. Your tax residency governs the amount and type of taxes you would need to pay and the country where such taxes are due.
Obtaining a residence permit is the primary condition for being considered as resident in the UAE. As a general rule, a foreign individual has to have a sponsor in order to apply for a residence permit in the jurisdiction. For many expatriates, the company that employs them will act as their sponsor and secure them residence visa. For those who do not come on an employment contract, the best way is to incorporate a company in UAE.
You will also be required to file an immigration report for the purpose of confirming your trips to the UAE.
What is Double Taxation Treaty (DTT)?
Double taxation is the principle by which an individual or an organization pays tax to two countries on the same income; one from where it is earned (UAE) and the other to the resident country. 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.
Advantages of Obtaining Tax Domicile Certificate
- Avoidance Of Double Taxation
- It confirms the status of a person or a company in the Emirates
- It can remove the huddles of tax for import and export
- It leads to strengthening of trade relations between countries
- It fosters international trade to a great extent
- It facilitates exchange of information
Conditions & Required Documents:
To apply for a tax domicile certificate individuals must have been a resident in the UAE for at least 180 days. The certificate is not granted to non-residents.
The following documents must be attached:
- A copy of the passport + valid permit of residence
- A copy of ID card
- A certified copy of (residential) lease agreement
- Validated 6-month bank statement from a local bank
- Source of income/Salary certificate
- A report from the General Directorate of Residency and Foreigners Affairs specifying the number of days the resident hasstayed in the UAE
- Tax forms (if any) from the country in which the certificate is to be submitted
The company license including partners’ names should be attached + previously mentioned documents.
The application should be attached to a copy of Marriage Certificate + a copy of passports and permits of residence for the married couple + salary certificate and employment contract of the husband + the other documents related to the husband as referred to earlier.
To apply for tax domicile certificates, the company must have exercised its activity in the UAE for at least one year:
- A copy of the trade licence and partners’ attachment
- Establishment contract certified by official authorities (if it is not a Sole Company)
- A copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
- A certified copy of the audited financial accounts
- A validated 6-month bank statement
- A certified copy of the lease agreement
- The organisational structure of the company (if it is not a Sole Company)
Our team of experts will help you to obtain tax domicile certificate as per your business needs.Our experienced and qualified professionals can support and guide you in processing all legal filings, forms, and applications for getting the Tax Residency Certificate or Tax Domicile Certificate without any hassle.