The UAE has transformed itself in a brief period from a country once completely reliant on oil revenue to one with a diverse economy attracting investment from all around the world.
The Emirates of Dubai and Abu Dhabi, in particular, have now become renowned as centers of international finance, embracing the latest technological innovations and developing into attractive tourist destinations with world-renowned landmarks and high-class hotels. Among the many incentives which attract businesses to the UAE is its favorable tax environment. The vast majority of companies that base themselves in the UAE are exempt from income tax.
In addition, it has established double taxation agreements with numerous trade partners to ensure that taxes are not imposed twice in two countries on the same taxpayer. Currently, the UAE has 123 double taxation agreements in force or pending. This encourages the free flow of trade and investment from other countries and protects member countries from double taxation on the exchange of goods, capital, and services. In order to benefit from the double taxation avoidance agreements that the UAE has in place, companies or individuals must have a Tax Domicile Certificate (TDC), also known as a Tax Residency Certificate (TRC). Here is all you know about obtaining tax residence in Dubai.
What is tax residency?
Tax residency is a certificate that allows qualifying government agencies, companies, and individuals to benefit from a double taxation avoidance agreement. It is also known as Domicile. The International Financial Relations and Organizations Department of the UAE issues a tax residence (Domicile) certificate.
Non-residents are not eligible to apply for the certificate since they have not lived in the UAE for at least 180 days. Companies operating in the UAE for at least one year are eligible to apply for the certificate. Following payment, the client will receive the certificate via email.
What are the benefits of obtaining a UAE Tax Residency Certificate?
It is a fantastic opportunity to start a business in the United Arab Emirates. The UAE's competitive tax climate is one of the many factors that draw firms to the country. Let's look at the benefits of obtaining a tax residence certificate in Dubai :
Both personal and corporate income taxes are exempt.
It has a tremendous impact on international trade.
It confirms a person's or a company's legal status in the United Arab Emirates.
Avoid paying additional taxes at any point during the import-export process.
It contributes to the development of bilateral business ties.
Living in the UAE allows you to avoid paying double taxes and take advantage of tax breaks.
Individuals and corporations can have several certifications.
Tax residency certificate for individuals
If you are applying for tax residence in UAE, you should have stayed in the UAE for at least 180 days. On-residents are not eligible. The following are the documents you require:
A copy of the passport and a valid residence permit.
A report from the General Directorate of Residency and Foreigners Affairs stating the length of stay is required.
A copy of the identification card.
A copy of the (residential) lease agreement that has been certified.
6-month bank statement from a local bank that is valid.
Certificate of Salary.
Tax forms from the nation where the certificate must be presented (if applicable)
Tax residency certificates for organizations
If a company wants to apply for a Tax Residency Certificate (TRC), it must have operated for at least one year in the UAE. The documents required to obtain TRC include:
A copy of the business license, as well as the attachments of the partners
A copy of the owners'/partners'/directors' passports, IDs, and residency permits
The company's organizational structure (if it is not a sole company)
Official authorities certify the establishment contract (if it is not a sole company)
A certified copy of the financial statements that have been audited
A 6-month bank statement authenticated and a certified copy of the lease agreement
How long does it take to obtain the UAE Tax Residency Certificate?
To apply for a tax residency certificate, you'll need an email address and a system account. If the conditions are met, an email will be issued to the applicant after the application and papers have been verified. The pre-approval process typically takes 4-5 working days. The tax residency certificate can take up to 5 days to be issued when the pre-approval process is finished. Following that, the applicant must pay the fees and shall receive the certificate by express courier.
How can Sentinel help?
Sentinel has direct contact with government offices and ministries and can assist you with obtaining the TRC and any other regulatory clearances or licenses. Please contact us if you need help getting a Tax Residency Certificate as an individual or a company in Dubai.