Tax residents spend 183 days or more in the United Arab Emirates annually. They can take advantage of the Double Tax Avoidance Agreements (DTAA) that the UAE has signed with several nations and get Tax Residency Certificates (TRCs).
The Federal Tax Authority website states that applying takes approximately forty-five minutes. The TRC is good for one year starting on the first of the applicant’s chosen fiscal year. A recent ruling by the Ministry of Finance clarified the guidelines for determining tax residency. Tax residents, for example, are not required to possess a fixed residence; nonetheless, “such a place must be continuously available to them.”
How to Obtain a Tax Residency Certificate UAE?
- Register on the Federal Tax Authority (FTA) website.
- Select the 'Services' tab after logging in.
- Select "Certificates" from the selection that drops down.
- Select "Request for Certificate of Tax Residency."
- A form for applications will then open. Enter all necessary information, including your name, tax registration number, Emirates ID number, and contact information.
- Upload all necessary files, including copies of your utility bill, rental agreement, passport, and Emirates ID.
- Before submitting, ensure all the application details are correct and current.
- The user will be redirected to a payment gateway after selecting "Submit." There is going to be a processing cost.
Tax Residency Certificate UAE and Tax Treaties
Due to the tax treaties the UAE has ratified with more than 115 nations, individuals and corporations are eligible to receive tax benefits such as lower withholding tax rates, tax exemptions, and tax credits.
You must have a Tax Residency Certificate to be eligible for these benefits under the tax treaties. For instance, a person or company may qualify for lower withholding tax rates on income received from a nation with a tax treaty with the United Arab Emirates. The individual or company may be liable to a much higher regular withholding tax rate without a Tax Residency Certificate.
A Tax Residency Certificate can also be useful in preventing conflicts with foreign tax authorities. Foreign tax authorities may view an individual or company as a tax resident of their nation without a Tax Residency Certificate, which could result in double taxation and disagreements.
Bilateral agreements between two nations intending to prevent tax evasion and eliminate double taxation are known as tax treaties. Over 115 nations, including the US, the UK, Canada, and Australia, have signed tax treaties with the UAE.
The tax benefits and regulations that apply to the taxpayers of both nations are detailed in each tax treaty. Generally speaking, the regulations address the kinds of taxable income, the rates at which those taxes are levied, and the processes by which the tax authorities of the two nations settle disagreements. You must have a Tax Residency Certificate to take advantage of the tax treaty benefits.
The certificate shows that the individual or company is qualified to receive benefits under the tax treaty and is a tax resident of the UAE.
What are the Benefits of Tax Residency Certificate UAE?
- Reduced withholding tax rates: Withholding tax is a tax that non-residents have money withheld at the source. Reduced withholding tax rates on specific income categories, like dividends, interest, and royalties, are frequently stipulated in tax treaties.
- Tax exemptions: Particular forms of income, such as capital gains and pensions, are excluded from taxes under particular tax treaties.
- Tax credits: Under certain tax treaties, taxpayers who pay taxes in another country may be eligible to claim a tax credit in their home nation for those taxes.
What are the Documents Required for Tax Residency Certificate UAE?
- Valid Resident Permit
- Passport
- Emirates ID (name on the card must match the EID filled out for verification).
- A certified copy of the residential lease agreement
- A bank statement from a local bank covering the first half of the requested financial year
- An entry and exit report from the Federal Authority of Identity and Citizenship or another appropriate local government body
- A source of income or salary certificate.
- Documentation showing proof of a fixed address:
- A certified copy of the applicant's lease or an electricity bill.
- In the case of private property, the title deed.
Source of Income
- If the applicant is self-employed, present a trade license and share a certificate
- If they own a property and use the proceeds for income generation, present a lease agreement if the property is leased.
How is Rewind Consultancy Obtaining a Tax Residency Certificate?
Rewind Consultancy has an experienced team who can help you with all tax-related queries. Our team can help people and organizations obtain a Tax Residency Certificate quickly and effectively because they know the most recent tax laws and regulations in the United Arab Emirates.
To assist our clients in meeting their financial commitments and ensuring compliance with local tax rules, we provide a broad range of accounting and auditing services like VAT Audits, Excise tax returns, etc. Get in touch with us right now to learn more about how we can support all of your accounting and auditing needs and help you obtain a Tax Residency Certificate in the United Arab Emirates.
