Introduction:
A tax residency certificate (TRC) is a document that serves as proof of a person’s tax residency status in a particular country. In the UAE, the TRC is by the Federal Tax Authority (FTA) to individuals and companies that meet requirements. This certificate is vital for those who need to provide evidence of their tax residency status in the UAE, especially for those required to file tax returns or claim tax benefits. This article is a detailed guide on a tax residency certificate in the UAE.
Who Needs a Tax Residency Certificate in the UAE?
A tax residency certificate by individuals and companies who need to prove their tax residency status in the UAE. It includes the following:
- Individuals who are residents of the UAE are required to file tax returns in the UAE.
- Companies incorporated in the UAE are subject to corporate income tax.
- Businesses with foreign shareholders incorporated in the UAE must apply for tax benefits under double tax treaties.
- People and businesses must provide tax authorities proof of their UAE tax residence status.
Requirements for Obtaining a Tax Residency Certificate in the UAE:
Individuals and businesses must fulfill the requirements to obtain a tax residency certificate in the UAE. These requirements vary depending on the type of entity applying for the TRC. The following are the general requirements:
- A valid trade license or residence visa in the UAE.
- Proof of income generated in the UAE, such as bank statements or employment contracts.
- A tax residency certificate from the country of origin, if applicable.
- Proof of payment of any taxes due in the UAE.
- A completed application from the FTA website.
- A copy of the applicant’s passport or national ID.
Steps for Obtaining a Tax Residency Certificate in the UAE:
The process for obtaining a tax residency certificate in the UAE involves the following steps:
Step 1: Register for a Tax Account with the FTA
Individuals and companies must first register for a tax account with the FTA before they can apply for a tax residency certificate. They visit the FTA website and complete the registration process.
Step 2: Complete the Application Form
The application form requires the applicant to provide personal and business information and details of income generated in the UAE.
Step 3: Gather Required Documents
Individuals and companies must gather all the required documents before submitting the application form to the FTA. It includes proof of income generated in the UAE, a valid trade license, or a residence visa. It has a tax residency certificate from the country of origin applicable.
Step 4: Submit the Application Form and Required Documents to the FTA
Individuals and companies can submit the completed application form and required documents to the FTA online through the FTA website. The FTA will review the application and may request additional information if necessary.
Step 5: Pay the Required Fees
Once the application is approved, individuals and companies must pay the required fees to obtain the tax residency certificate. The money varies depending on the type of entity applying for the TRC.
Step 6: Collect the Tax Residency Certificate
The FTA will issue the tax residency certificate once the fees get paid. Individuals and companies can collect the TRC in person or deliver it to their registered address.
Validity and Renewal of Tax Residency Certificate in the UAE:
The tax residency certificate in the UAE is valid for one year from the date of issuance. After that, individuals and companies must renew their TRC.
Renewal of Tax Residency Certificate in the UAE:
To renew a tax residency certificate in the UAE, individuals and companies must follow a similar process as applying for a new TRC. The following are the steps for renewing a tax residency certificate:
Step 1: Check the Expiry Date of the Current TRC
Individuals and companies must check the expiry date of their current tax residency certificate to ensure that they renew it before it expires. The TRC is valid for one year from the date of issuance.
Step 2: Update the Application Form
Individuals and companies must update the application form with any personal or business information since the last application.
Step 3: Gather Required Documents
Individuals and companies must gather the required documents, which include proof of income generated in the UAE. It has a valid trade license or residence visa and a tax residency certificate from the country applicable.
Step 4: Submit the Application Form and Required Documents to the FTA
Individuals and companies can submit the completed application form. It required documents to the FTA in person or online through the FTA website.
Step 5: Pay the Required Fees
Once the application is approved, individuals and companies must pay the required fees to renew the tax residency certificate. The money varies depending on the type of entity applying for the TRC.
Step 6: Collect the Renewed Tax Residency Certificate
The FTA will issue the renewed tax residency certificate once the fees get paid. Individuals and companies can collect the renewed TRC in person or at their registered address.
Conclusion:
A tax residency certificate is a vital document that confirms an individual’s or company’s tax residency status in the UAE. Individuals and companies obtain a TRC to comply with the UAE’s tax laws and regulations. The TRC is valid for one year, and individuals or companies must renew their TRC annually to maintain their tax residency status in the UAE. The renewal process involves updating the application form, submitting the renewal application to the FTA, and collecting the renewed TRC. Individuals and companies can obtain and renew their tax residency certificates in the UAE and comply with the country’s tax laws.
FAQs
What advantages does a certificate of UAE tax residency offer?
A certificate of tax residency offers various advantages, such as exemption from double taxation, access to tax treaties, and eligibility for certain tax benefits. It also demonstrates an individual or company’s compliance with the UAE’s tax laws and regulations.
How much does a tax residency certificate in the UAE cost?
The cost of a tax residency certificate in the United Arab Emirates varies depending on the entity type. For individuals, it costs AED 1,020, while for companies, it costs AED 3,020. Renewal fees are the same as the application fees.