Tax Domicile Certificate
In the UAE, the Tax Residency Certificate (TRC) is an official document issued by the Ministry of Finance. The UAE has established tax treaties with 55 countries to eliminate double taxation. This certificate confirms that an individual or entity is considered a tax resident of the UAE. It benefits foreign investors and businesses from other taxable jurisdictions, allowing them to avoid being taxed twice. TRCs are issued to companies registered in the UAE or individuals holding a UAE residency visa.
Individuals who have resided in the UAE for over 180 days are eligible to apply for a TRC. UAE-based companies can fully leverage double taxation benefits, thanks to the UAE’s extensive network of bilateral tax treaties designed to safeguard the interests of foreign investors and businesses. However, offshore companies are excluded from these tax treaties and cannot obtain a TRC. Instead, they can apply for tax exemption certificates, which provide limited tax benefits.
To apply for a TRC in the UAE, specific procedures must be followed. Once all required documents are submitted, the certificate is typically issued within two months. Companies must have been operational in the UAE for at least three years to qualify for a TRC.
Documents for Companies
- All company documents
- Request letter from the company
- Shareholder passport copy, visa page, ID copy
- Audited financial statements
- 6 months bank statements
- Tenancy contract copy and EJARI
- Government fees will be around AED 5,000.00.
Documents for individuals
- Passport copy and visa page, Emirates ID,
- Tenancy contract and EJARI
- Source of income/Salary certificate
- 6 months bank statements
- Immigration report stating the number of days the person has stayed in the UAE
- Government fees will be approximately AED 2,000.00
Tax Residency Certificate Importance
A Tax Residency Certificate (TRC) is a crucial document issued by the UAE Federal Tax Authority (FTA) that establishes an individual’s or a company’s residency status for tax purposes. It is especially valuable for businesses and individuals seeking to take advantage of the UAE’s extensive network of double taxation treaties.
Here’s why a TRC is important:
- The UAE’s 100+ treaties prevent double taxation, letting businesses and individuals avoid paying tax twice.
- A TRC enables tax exemptions or reduced rates on foreign income, cutting overall tax liabilities.
- TRC provides official proof of UAE tax residency, ensuring compliance with foreign tax authorities.
- TRC showcases compliance with tax laws, strengthening trust with global clients and investors.
- TRC simplifies cross-border transactions, ensuring smoother tax processes and treaty benefits internationally.