The last thing you want as a business owner or self-employed person is to have your revenue taxed twice, by different countries. To avoid this, the UAE signed Double Taxation Agreements with many countries, making tax compliance an easier process for its residents. A Tax Residency Certificate (TRC) is a key document you need to show the authorities that you’re a legal tax resident of the country.
What is a Tax Residency Certificate?
A tax residency certificate (TRC) is a document issued by the Federal Tax Authority (FTA) to legally prove that an individual or business entity is a resident of a certain country. You can get a TRC in the UAE to show the authorities your (or your company’s) taxation status. A TRC can only be issued for the current tax period or a previous tax period (usually 12 months).
There are two types of TRCs:
- TRC for domestic purposes: This type of certificate is mainly used for local taxation and allows the holder to access tax exemptions.
- TRC for treaty purposes: This type of certificate is used to avoid double taxation and proving that you (or your business) are a legal resident of the UAE. It is issued as part of the DTAA (Double Taxation Avoidance Agreement) between the UAE and several countries.
Who is Eligible for a Tax Residency Certificate?
Natural Person:
If you are a “natural person” (individual) applying for a Tax Residency Certificate, you have to prove that you are a resident of the country. You can do that if:
- You have a primary place of residence
- You have financial and personal interests in UAE
OR
- You have been in the country for at least 183 days in the last 12 months
OR
- You have been in the country for at least 90 days in the last 12 months and are a UAE national/GCC resident/expat with a primary residence and/or business in the country
Legal Entity:
To get a TRC certificate as an entity, these are the conditions you must fulfill:
- You have been established for at least one year
- You have ongoing business operations in the UAE
- Your company has undergone an audit for the year you are applying for
If you are simply running a local branch of a foreign entity or an offshore company, you are not eligible for the TRC. A&A Associate provides expert tax audit services for businesses looking to apply for a TRC certificate.
Benefits of the TRC Certificate
1. Avoid Double Taxation
The biggest reason to apply for a certificate of residency for tax purposes is to avoid double taxation. Generally, if you are a resident of one country and earning income in another, there is a chance you might be taxed on the same income in both countries. The UAE signed DTAAs (Double Taxation Avoidance Agreement) with over 80 countries to prevent this.
2. Legal Recognition
Knowing how to get a tax residency certificate is also important for simplifying financial reporting and being compliant with UAE’s tax laws. It also strengthens your credibility and legitimacy as a business owner/individual with the government.
3. Tax Exemptions
Getting a TRC certificate can also allow you to claim certain local tax incentives that can support business growth. It also gives you easier access to global markets.
Benefits of the TRC Certificate
For Individuals
- Copies of Passport, Emirates ID, UAE Visa
- Tenancy contract/Residential lease agreement (Ejari)
- Latest salary certificate
- Bank statement for the last six months
- Entry and exit report from the relevant government entity
For Businesses
- Copy of Certificate of Incorporation
- Copy of Memorandum of Association
- Trade license
- Tenancy contract/lease agreement for office
- Audited financial statements
- Bank statement of company account for the last six months
- Passport and visa copies of directors/managers and shareholders
How to Get a Tax Residency Certificate: The Steps
1. Log In To Tax Portal
You can apply for a certificate of residency for tax purposes on the EmaraTax portal. If you have an existing account, you can use that. Otherwise, you must create a new one.
2. Select The Right Service
You can find the option to apply for a tax residency certificate under “Other services.” Remember to select your TRN (Tax Registration Number) if you have one. This will autofill some details of your application and also reduce the submission fees.
3. Complete Form & Pay Submission Fees
You will also need to select why you are applying for a TRC certificate. If it is for DTAA purposes, you will also need to select the other country that is part of the agreement. The FTA also has an option to request printed certificates. After that, you should pay the submission fees and submit the application.
4. Pay Processing Fees & Download Certificate
Once the FTA approves your application, you have to pay the processing fees. If you don’t pay it within 30 days, your application for a certificate of residency for tax purposes will be cancelled. You will then have to resubmit your application and pay the submission fee again. You can download your certificate as soon as you pay the processing fee. The certificate will also be sent to your email address, or delivered via courier if you chose the printed option.
How A&A Associate Can Help
A&A Associate provides tax consultancy and tax audit services for businesses and individuals looking for expert guidance on how to stay compliant, manage their tax responsibilities, and can help provide audits for businesses who want a certificate of residency for tax purposes. You can also hire A&A as a VAT consultant in UAE as our team stays up to date on the UAE’s tax laws.
To get started with your Tax Residency Certificate process, contact us at +971 54 793 9972 or email us at enquiry@aaconsultancy.ae.
FAQ’s
How Much Does A TRC Certificate Cost?
The TRC prices don’t change whether you apply for domestic or DTA purposes:
- AED 50: Submission fees
- AED 500: Commercial activity, tax registrants
- AED 1,500: Non tax-registered natural persons
- AED 1,750: Non tax-registered legal entities
How Long Does it Take to Get A TRC Certificate?
The FTA (Federal Tax Authority) takes 10 days to review your application for a tax residency certificate. They can approve, reject, or request further information from the applicant. You have 30 business days to respond to the request and can also ask for an extension if you need to renew certain documents. For those who requested a TRC certificate hard copy, the FTA will take five days from the date of the processing fee payment to deliver the document.
What If I Lost My Tax Residency Certificate?
If you lose your TRC certificate and need another hard copy, you will have to pay AED 100 for the FTA to send you another one.
How To Get UAE Tax Residency Certificate?
You can apply for a certificate of residence for tax purposes on the Emara Tax portal. The application takes about 45 minutes to complete.
Who Needs a Tax Residency Certificate in UAE?
Tax residents of the UAE who want to avoid double taxation can apply for a TRC certificate. There might be specific rules based on the country UAE has signed a DTA with. They can apply as an individual or a legal entity.
How to Download Tax Residency Certificate from EmaraTax?
You have to login to the EmaraTax portal, navigate to the “My Correspondences” section, and download your certificate from there. In most cases, the FTA will also send your TRC to your email address.
What is the Validity of Tax Residency Certificate in the UAE?
The Tax Residency Certificate is valid for one year from the date of issue. You must renew your certificate if you want to maintain your compliance. To do so, you must reapply by submitting the documents and paying the relevant fees.
Where to Get a Certificate of Residency for Tax Purposes?
You can get a Tax Residency Certificate online, by applying on the EmaraTax portal. You will have to gather the relevant documents, pay the submission and processing fees and wait for FTA approval. If you already have a TRN, the application fees will be lowered.
What is Proof of Residence in UAE?
If you need proof of residence to apply for a TRC certificate, you can use your tenancy contract or residential lease agreement. You just need to show the FTA that you have a permanent residence in the country.
What is a Tax Certificate in the UAE?
A Tax Residency Certificate (TRC) is a document issued by the FTA to individuals or legal entities to avoid double taxation. The UAE has signed DTAs with several countries, making it easy for residents to avoid getting taxed on the same income twice. TRCs are valid for one year and can be applied for online.
