Entities eligible to apply for TRC
So far, UAE has signed the Double Taxation Avoidance Agreement with 100+ countries including Europe, Asia, Africa, the Middle East, South America, Central America, Oceania, North America, and the Caribbean. The UAE is planning to enlarge the list so that more nations can relish the benefits of the agreement and get motivated to prosper their business. When two nations sign the Avoidance of Double Taxation Agreement, the residents and investors of these countries can avail the benefits of the agreement via a Tax Residency Certificate. Public companies, private organizations, and various other firms, including investment firms and air transport firms operating in the UAE and residents of the country, can take advantage of the agreement. Except for offshore establishments, every onshore, as well as free zone company, can claim tax domicile/tax residence certificate in the UAE.
Tax Residency Certificate Procedure
The tax residency certificate process is slightly different for individuals and corporates. Whether it’s a person applying for the Tax Domicile Certificate or a company, both entities have to meet certain criteria to be eligible for the TRC.
Why Tax Residency Certificate?
Expanding your business on a global level certainly brings with it tons of benefits. Not only operating on a global platform is beneficial for business persons, but also for nations involved. No wonder, we are seeing a roar in cross-culture business activities. The only downside of taking your business activities to the other side of the border is that you might get taxed multiple times in different jurisdictions. To tackle this issue and keep businesses from losing their hard-earned money, countries entered into a Double Tax Avoidance Agreement. You need the Tax Residency Certificate if you don’t want to fall victim to Double Taxation. The majority of establishments that have their headquarters in the UAE are tax-free. The Tax Residency Certificate is an official document that serves various purposes such as
The requirements for an individual Tax Residency Certificate
The individual applicant applying for the Tax Residency Certificate in the UAE must be residing in the UAE for at least 183 days; non-residents do not qualify to apply for the same. The resident applicant should present the copies of following documents required for Tax Residency Certificate:
Prerequisites for a corporate Tax Residency Certificate
The company applying for Tax Residency Certificate (TRC) must be functioning in the UAE for a minimum of one year and possess the copies of following documents required for Tax Residency Certificate:
- Trade license and partners’ attachment
- Establishment contract certified by official authorities (if it is not a sole proprietorship firm)
- Company’s owners/partners/directors’ passports, IDs & permits of residence
- Certified audited financial accounts
- Validated 6-month bank statement
- Certified lease agreement
- The organisational structure of the company (for companies other than sole propriety)
- Tax Residency Certificate Services in Dubai, UAE
Registration process & duration
One has to register themselves on the ministry website using their email ID or phone number to obtain the Tax Residency Certificate. After creating an account on the official site, they have to submit the duly filled application form along with the necessary documents in PDF or JPEG format for the application pre-approval. You may expect the pre-approval process to be completed within 4-5 days. Upon verification of the application and the documents, an email will be sent to the applicant, provided all the relevant documents are in place. It can take up to 5 more days to grant the Tax Residency Certificate after the final step i.e. fee payment. The applicant will receive the certificate via an express courier.
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