The United Arab Emirates (UAE) has become one of the most popular destinations for people from all over the world. Its exceptional growth, superior infrastructure, world-class facilities and tax-friendly environment make it an attractive option for people who want to work, live and invest in the region. The authorities in UAE have taken several measures to attract investors, entrepreneurs and professionals from around the world. One such measure is the introduction of the Tax Residence Certificate (TRC), which is a document that indicates a person’s tax residency status in the UAE. As a global hub for international business and commerce, the United Arab Emirates (UAE) continues to attract a significant number of foreign investors and entrepreneurs looking to tap into its diverse economy. One of the key considerations for such investors is their tax residency status, as it can impact their tax liability both in the UAE and their home country.
To determine their tax residency status, foreign investors can obtain a Tax Residency Certificate (TRC) from the UAE tax authority. This certificate confirms their tax residency status in the UAE and can be used as evidence for tax purposes in other countries, including claiming benefits under Double Taxation Avoidance Agreements (DTAAs). Obtaining a TRC requires meeting certain criteria, such as a minimum stay of 183 days in the UAE and having a valid residency visa. Investors also need to provide supporting documents such as tenancy contracts or utility bills to prove their physical presence in the country.
Besides facilitating compliance with tax laws, TRCs can also enhance investors’ credibility with banks, governments, and other stakeholders. They serve as proof of a taxpayer’s legal status in the UAE and can simplify the process of opening bank accounts, obtaining visas, or participating in tenders. TRC is an essential document for foreign investors in the UAE, providing a clear roadmap for their tax residency status in the country. It not only ensures compliance with relevant tax laws but also enables investors to benefit from various DTAA provisions and establish a credible presence in the UAE.
What is Tax Residence Certificate (TRC) ?
UAE TRC Certificate (TAX DOMICILE CERTIFICATE- UAE ) is issued to take advantage of double taxation avoidance agreements signed by the UAE. Implementation of UAE’s Double Taxation Treaty (DTT) protect and endorse the interests of foreign investors/entrepreneurs and companies coming from other taxable jurisdictions.
The Tax Residence Certificate (TRC) is a document that indicates the tax residency status of an individual or company in the UAE. It is issued by the Federal Tax Authority (FTA) to individuals and companies that meet the criteria for obtaining the certificate. The TRC serves as proof that an individual or company is a tax resident in the UAE and is entitled to the benefits of the UAE’s double tax treaties. A tax treaty is an agreement between two countries that provides for the elimination of double taxation on income earned by individuals or companies that are residents of one country but derive income from another country.
Who is Eligible for the Tax Residence Certificate in UAE (TRC -UAE )
To be eligible for the Tax Residence Certificate (TRC), an individual or company must meet certain criteria.
For individual tax residence certificates in the United Arab Emirates the following requirements must be met.
• The individual must be a resident of the UAE for tax purposes, which means that they have been present in the UAE for at least 183 days in a calendar year.
• The individual must provide proof of their residency status in the UAE, such as a residence visa or an Emirates ID.
• The individual must have a valid tax registration number (TRN) issued by the FTA.
Documents Required for TAX Residency Certificate in Dubai – UAE (for Individual UAE Tax Domicile Certificate)
1. Passport copy and valid UAE visa copy
2. Emirates ID of the individual
3. Bank statement for the last 6 months.
4. Source of income with attested certificate.
5. Tenancy contract / Title deed
6. Entry and Exit report from the immigration
7. Requesting letter from the applicant
8. Certificate from the sponsor stating the individual activity and source of income.
For company tax residence certificate in United Arab Emirates the following requirements must be met:
• The company must be incorporated and registered in the UAE.
• The company must carry out substantial economic activities in the UAE, such as manufacturing, trading or services.
• The company must have a valid tax registration number (TRN) issued by the FTA. (If applicable)
Documents required for TRC Certificate Dubai (for Company UAE Tax Domicile Certificate)
• Trade license.
• Lease contract.
• Copy of the passport and residence of the company director.
• Request Letter from the company.
• Bank statement for the last 6 months (Note: license should be valid for more than a year).
• Audited financial accounts.
• Tenancy contract
• Emirates ID of shareholders
• Address of company
• Country to which TRC is required
• Financial Year
• Date of issue date mentioned in the TRC (if any specific date require)
• VAT registration number of the company (lf applicable)
How Nex Consultants can help to get TRC in Dubai – UAE
Nex Consultants can help individuals and companies in obtaining UAE Tax Residence Certificate by providing the following services:
1. Assessing eligibility: NEX CONSULTANTS can assess an individual or a company’s eligibility for obtaining a UAE Tax Residence Certificate based on various factors, including the purpose of getting the certificate, the country of residency, and the nature of the business.
2. Gathering required documents: NEX CONSULTANTS can assist in gathering all the necessary documents required for obtaining the certificate, such as proof of residency, passport copies, and proof of income and assets.
3. Preparing and submitting the application: NEX CONSULTANTS can help in preparing the application and submitting it to the relevant authority on time.
4. Liaising with authorities: NEX CONSULTANTS can act as a liaison between the applicant and the relevant authorities to ensure the application process is smooth and hassle-free.
5. Follow-up and updates: Nex can provide regular updates on the status of the application and follow-up with the authorities to expedite the process.
Useful Reading (MOF) : Double Taxation Agreements