Tax Residency Certificate UAE: A Comprehensive Guide

The Tax Residency Certificate UAE is an extremely essential document for individuals and companies living or operating in the United Arab Emirates. Also known as the Tax Domicile Certificate, this specific document allows individuals to take advantage of the UAE’s tax agreements with other nations. Issued by the Federal Tax Authority (FTA), this certificate helps entrepreneurs or business owners to avoid paying double taxes on the same income. Several individuals take advantage of this certificate to prove that they are tax residents of the UAE. Through this comprehensive guide, let’s explore what exactly a tax residency certificate is, who can apply, the benefits, the documents required, and how to apply for the same easily.

What is a Tax Residency Certificate UAE? 

A Tax Residency Certificate UAE is an official document given by the UAE’s Federal Tax Authority (FTA). It proves that a person or a company is a tax resident in the UAE. This certificate is often used when someone wants to take advantage of the Double Taxation Avoidance Agreements (DTAA) that the UAE has signed with other countries. With this certificate, you may not have to pay tax twice on the same income, once in the UAE and once in your home country. It is valid for one year and needs to be renewed every year if required.

Benefits of a Tax Residency Certificate in the UAE

Benefits of a Tax Residency Certificate in the UAE – In the UAE, the tax residency certificate comes across with a range of benefits apart from just paying double taxes. Let’s have a closer look at its key advantages. 

• Avoid Double Taxation: The certificate helps you avoid paying tax twice on the same income, in both the UAE and your home country, as long as the UAE has a tax treaty with that country.

• Proof of UAE Tax Residency: It serves as legal proof that you or your business is a tax resident in the UAE, which is helpful when dealing with tax authorities in other countries or when applying for visas.

• Access to Tax Treaties: With this certificate, you can enjoy the benefits of over 130 double tax agreements the UAE has with other nations, which could lower or remove certain taxes on income earned abroad.

• Boosts Business Credibility: For companies, having a tax residency certificate in Duabi, UAE adds to the company’s reputation and trust, and shows that it is officially recognized by the UAE authorities and is following all local tax rules properly.

• Helps in Financial Planning: When you know your tax status clearly, it becomes easier to plan your finances and investments. You can avoid unexpected tax charges and make better financial decisions for the future.

Who Can Apply for a Tax Residency Certificate in the UAE?

Both individuals and companies can apply for a Tax Residency Certificate in the UAE, but certain conditions must be met:

For Individuals:

• Must have stayed in the UAE for at least 183 days in the past 12 months.
• Must be physically present in the UAE for more than 90 days in the last 12 months. These conditions are also valid for tax residency certificates for NRIs in the UAE.
• Must have proof of income (like salary or business earnings).
• Should have a valid UAE address (such as a tenancy contract or property ownership).
• Must work or conduct business in the UAE.  

For Companies:

• The company must be registered in the UAE.
• Must have been operating for at least one year.
• An entity with an establishment outside the UAE but effective management control is with a person who is a tax resident in the UAE. 
• Should have audited financial statements through certified firms.
• Must have a valid trade license and office lease agreement.

Documents Required for Tax Residency Certificate UAE

To apply for your Tax Residency Certificate UAE, you are required to gather a comprehensive set of documents and submit them to the relevant authorities. Here are some of the key documents that you must collect: 

For Individuals:

• Passport copy
• UAE residency visa copy
• Emirates ID copy
• Salary certificate or proof of income
• Bank statement (last 6 months)
• Tenancy contract or title deed (proof of address)
• Entry and exit report from immigration (to show 183+ days in UAE)
• Tax form (if required by the foreign country)

For Companies:

• Trade license copy
• Memorandum of Association (MOA)
• Establishment card
• Immigration report of company representatives. 
• Shareholders’ passport copies
• Audited financial statements and tax returns(last year)
• Bank statement (last 6 months)
• Office tenancy contract or lease agreement
• Tax form (if required by the foreign country)

Step-by-Step Application Process

Applying for the Tax Residency Certificate UAE is simple if you follow these steps carefully. Let’s understand the key steps to be followed: 

1. Register on the FTA Portal

Go to the official website of the Federal Tax Authority (FTA), which is https://www.tax.gov.ae. Create an account by entering your basic details like your name, email, mobile number, and Emirates ID (for individuals) or company details (for businesses). Once registered, log in to your account to start the application.

2. Submit Required Documents

After logging in, choose the option to apply for a Tax Residency Certificate. Now, you will need to upload all the required documents. Individuals and companies must submit documents as per the nature of their requirements. Make sure the documents are clear, valid, and updated. Incomplete or wrong documents may cause delays or rejection.

3. Pay the Fees

Once all your documents are uploaded and reviewed, the FTA will notify you to pay the application fee. You can make the payment online through the portal using a credit or debit card.

4. Application Review

After your payment is done, the FTA will start reviewing your application. This usually takes about 4 to 5 working days. They might also contact you if they need any additional information or documents. So, keep checking your email and the FTA account. If everything is in order, they will move to the next step.

5. Receive the Certificate

If your application is approved, the Tax Residency Certificate UAE will be issued digitally and available for download from your FTA account. You can print it if needed and use it as official proof of your UAE tax residency. The certificate is valid for one year from the date of issue.

Validity and Renewal

The Tax Residency Certificate is valid for one year from the date of issue. You can renew the certificate each year by reapplying through the same process. Moreover, it is important to make sure that your documents are updated, especially the tenancy contract and bank statements, before renewal. However, if you are not aware of the renewal process, you can seek professional assistance from experts. 

Cost and Time Involved

To apply for the Tax Residency Certificate in the UAE, individuals need to pay a fee of AED 1,000, while companies are required to pay AED 1,750. In both cases, there is an extra AED 50 fee for application review. These fees are paid online during the application process. It’s a good idea to always check the latest fees on the Federal Tax Authority (FTA) website, as they may change. Once you submit your documents, it usually takes about 4 to 5 working days for the FTA to review and approve them. After that, the certificate is issued within 3 to 5 working days. So, the full process normally takes around 7 to 10 working days in total. 

Conclusion 

The Tax Residency Certificate UAE is a crucial document for both individuals and businesses living in the UAE. It helps you legally avoid double taxation, improves your financial planning, and gives access to tax treaty benefits. The application process is simple if you have the right documents ready. Even if you are an expat professional, a freelancer, or a business owner, this certificate can help you stay compliant with international tax rules while enjoying the UAE’s tax-friendly environment.

Professionals like HISAB Taskmaster CA Advisors in the UAE can assist you in acquiring a tax residency certificate by helping you navigate through numerous challenges. Our professionals have an in-depth understanding of the process and can help you gather documents, approvals, and more. We make your comprehensive tax residency application procedure smooth and hassle-free. So, get in touch with us and make the most of our expertise. 

Also Read – Due Diligence Guide: Key Checks Before Buying a Business in Dubai, UAE