Background
The United Arab Emirates (UAE), historically free of direct federal taxes like corporate or personal income tax, recently established new domestic tax residency criteria. Introduced via Cabinet Decision No. (85) of 2022 in September 2022 and clarified further by Ministerial Decision No. (27) of 2023 in February 2023. The new rules came into effect on 1 March 2023. The aforementioned decisions stipulate tax residency criteria for both individuals and legal entities, highlighting a significant fiscal transformation for the UAE1.
On 16 October 2023, the UAE Ministry of Finance issued Ministerial Decision No. (247) of 2023 on the Issuance of Tax Residency Certificates for the Purposes of International Agreements.
The decision specifies how taxpayers can apply for a Tax Residency Certificate (TRC) for Double Taxation Agreement (DTA) purposes2.
Tax Residency Certificate UAE:
A Tax Residence Certificate (TRC) is an official document issued by the Federal Tax Authorities in the United Arab Emirates (UAE) that verifies an individual’s tax residency status in the country. Below are key points to understand regarding the TRC in the UAE:
TRC Objective: Tax Residence Certificate:
The primary objectives of obtaining a Tax Residency Certificate (TRC) in the UAE are:
- Establishing Residential Status – To officially confirm the individual or entity’s tax residency in the UAE.
- Avoiding Double Taxation – To benefit from the UAE’s tax treaties, ensuring that income is not taxed in both the UAE and another country.
- Facilitating Cross-Border Transactions – To streamline and support international business operations and transactions.
Step-By-Step Guide:
Step 1: Check your eligibility for TRC
The first step is to check whether you are eligible to get a Tax Residency Certificate.
Eligibility requirements for an individual to obtain a Tax Residency Certificate (TRC) in the UAE
As an individual, you must have your primary place of residence and the center of your financial and personal interests in the UAE. You may qualify as a resident if:
- You have been physically present in the UAE for at least 183 days in the past 12 months, or
- You have been physically present in the UAE for at least 90 days in the past 12 months and are either a UAE citizen, a GCC national, or an expatriate resident with permanent residency in the UAE, or engaged in business or employment within the UAE.
Eligibility requirements for a company to obtain a Tax Residency Certificate (TRC) in the UAE
If you are an entity, you are considered a tax resident in the UAE if you are recognized as a taxable entity under the relevant UAE tax laws. Alternatively, you may qualify as a UAE tax resident if your entity is established, formed, or recognized within the UAE. A company with an establishment outside the UAE but with effective management and control within the country is also considered a UAE tax resident.
However, a UAE branch of a foreign entity does not qualify as a tax resident of the UAE.
Step 2: Register or log in to the FTA portal
If you fulfill the eligibility requirements for Tax Residency in the UAE, you can proceed to the next step. First, log in to the portal at https://trc.tax.gov.ae/TRC_Th/.
If you don’t have login credentials, you’ll need to sign up to create an account. Once logged in, you will be directed to your account dashboard. From there, click on the “Create Tax Residency Certificate” tab to continue.
Step 3: Submit the Tax Residency Certificate Application Form
After clicking on the ‘Create Tax Residency Certificate’ tab, the application form will appear. Complete all the required fields, including details such as your tax registration number, name, contact information, and other relevant information. Make sure the form is filled out accurately and thoroughly.
Additionally, be sure to upload all necessary documents and supporting records as proof.
Documents required for obtaining TRC (Tax Residency Certificate) for an individual (Natural Person)
- Identity proof of individuals, including copies of passport, UAE residence visa, and Emirates ID.
- Latest salary certificate
- Copy of tenancy contract or residential lease agreement
- Last six months’ bank statements
- A report on the number of days the individual has stayed in UAE from the General Directorate of Residency and Foreign Affairs.
Documents required for obtaining TRC (Tax Residency Certificate) for a company
- Copy of company trade license
- Residence visa, Emirates ID, and passport copy of shareholders and managers
- Copy of certified establishment contract
- Copy of tenancy contract or company lease agreement
- Copy of last six months’ bank statements
- Copy of audited financial statements or audited financial reports
Documents required for obtaining TRC (Tax Residency Certificate) for investors
- Company License
- Name of the Partner
- Any other documents mentioned earlier
Documents required for obtaining TRC (Tax Residency Certificate) for Housewives
- Marriage Certificate
- Copy of Passport and Residency Permits of both Husband and wife
- Partners Salary certificate and work contract.
Approval of TRC (Tax Residency Certificate)
Once FTA satisfied with correctness of all information, the FTA officer will Pre-approve the application. The Final approval or certificate will be issued after the payment of service fees
Cost / Fees of obtaining TRC (Tax Residency Certificate)
- Application submission fees: AED 50
- Service fees for tax registrants: AED 500
- Service fees for natural persons, non-tax registrants: AED 1,000
- Service fees for legal persons, non-tax registrants: AED 1,750
TRC FAQ
What is the processing time to obtain a Tax Residency Certificate (TRC) in Dubai, UAE?
The pre-approval process typically requires approximately 4-5 business days, during which the Federal Tax Authority (FTA) reviews and either approves or rejects the submitted form and documents. Upon approval, the applicant can expect to receive the Tax Residency Certificate within an additional 5-7 business days.
What is the validity period of a Tax Residency Certificate (TRC) issued in the UAE?
The Tax Residency Certificate (TRC) issued by the Federal Tax Authority (FTA) in the UAE is valid for a period of one year
Is a Tax Residency Certificate (TRC) available in the UAE for non-employed individuals and family members?
Yes, a Tax Residency Certificate (TRC) can be issued in the UAE for non-employed individuals and family members.
What if I lost, damaged or need copy of TRC?
Yes, you can acquire the duplicate copy of documents by paying AED 100 fees. Also need to pay AED 3 from e-dirham card
HOW SAMCO ACCOUNTING CAN HELP YOU TO ACQUIRE TRC?
SAMCO ATC simplify the process of obtaining your Tax Residency Certificate in the UAE by providing expert guidance and comprehensive support, ensuring thorough document verification and compliance. Our team manages every step, from start to finish, to make your application seamless and hassle-free. Please call us at 056 665 5756 or email us at accounts@samcoatc.com