All you need to know about the Tax Registration Certificate in Dubai
The Emirates have developed at a phenomenal rate economically and investors from all over the world have decided to locate their companies and residences here. The UAE has quickly gained the status of a global financial center, using the latest technologies, while being a tourist destination.
What attracts businessmen? The more than favorable tax climate with a total absence of taxes on income and salaries.
Moreover, it should not be forgotten that the Emirates have signed non-double taxation agreements with many countries to ensure that a taxpayer is not taxed twice in two different countries.
Learn more about double taxation treaties: Tax treaties signed by the UAE
What is the Certificate of Tax Residence
The UAE Tax Residence Certificate (TRC), also known as the tax domicile certificate is a certificate issued by the UAE Federal Tax Authority (FTA) in accordance with the provisions of the Double Taxation Avoidance Agreements.
This document allows all governmental entities, companies and individuals who meet the eligibility criteria to benefit from these double taxation agreements on income generated in Dubai, signed by the United Arab Emirates.
The certificate is valid for one year and can be issued to individuals and companies upon request.
Companies or individuals must be in possession of a tax residence certificate (TRC) in order to benefit from the UAE’s double taxation avoidance agreements.
The different types of Tax Residency Certificate
The TRCcan be requested by individuals and legal entities.
- Individual: an individual may want to benefit from the advantages of the tax treaties signed by the UAE (for example to receive dividends from a foreign company to benefit from a reduced withholding tax rate), that’s why he will ask for this certificate;
- Company: as a company, if you need a TRC, you will have to have carried out an activity in the UAE for at least one year.
In short, the former applies to the individual income of a resident, while the latter applies to UAE resident companies.
Note that an offshore company is not able to apply for TRC as by definition, this type of company cannot have a physical presence in the UAE.
Why apply for a CRT?
Several public and private entities operating in the UAE benefit from Double Taxation Avoidance Agreements (DTA). Thus, in order to promote its development objectives, the UAE has concluded 137 Double Taxation Agreements with its business partners.
Once DTAs are signed, companies and individuals can apply for a UAE Tax Residency Certificate (TRC). Many foreign investors also apply for a UAE tax residency certificate to protect their interests.
This certificate has been put in place for specific purposes:
- Firstly, it serves to prove that the applicant is a resident of the UAE;
- Secondly, it will allow the applicant to avoid paying taxes in two different countries;
- It also serves to facilitate the process of trade and investment flows;
- And finally, it helps to encourage the development objectives of the Emirates.
What are the documents needed?
If you wish to apply for a TRC, you will need to gather a number of documents. We have listed them for you:
– Copy of valid passport and residence visa;
– Copy of your EmiratesID also known as the Emirates ID card;
– 6 months of personal bank statements in the UAE, certified by the bank;
– Proof of income in the UAE, e.g. employment contract, share certificate, salary certificate;
– Immigration report certifying all entries and exits from the country;
– Certified copy of an EJARI (lease agreement) or title deed.
More details here: Obtain your TCR with Merritt
How does Merritt assist you?
Our team can assist you if necessary, and the cost of our assistance will be AED 1,500.
If you would like more information on the UAE Tax Residence Certificate, please contact us by email at the following address: support@merritt.group
