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Tax Residency Certificate in UAE

UAE has a broad spectrum of businesses combining market-leading corporate firms and local SMEs! Here, tax residency certificate is issued to eligible government entities, individuals, and companies looking for benefits from DTT or double taxation avoidance agreements between UAE and specific foreign jurisdiction. While commercial activities certificate allows applicants to refund VAT paid in advance outside UAE. 

Tax residency certificate is the most significant document that supports an application to achieve the benefits of DTT. This certificate was previously issued by the Ministry of Finance in UAE, but as a recent update, tax residency certificate and commercial activities certificate will be issued through FTA or Federal Tax authority. The move was in line with the cabinet decision No-65 of 2020 that determines the fees for services provided by FTA.

Individuals or companies can submit their application through FTA’s e-services portal starting from November 14th, 2020!

Services provided by FTA

  1. Issuance of an attested paper tax registration certificate
  2. Issuance of an attested paper warehouse keeper registration certificate
  3. Registration of designated zone, pursuant to provisions of Federal Decree Law No7 of 2017 on Excise tax
  4. Registration of tax agent in the register of tax agents
  5. Renewal of the registration of tax agent in the register of tax agents
  6. Registration of an accounting software vendor with the authority
  7. Renewal of the registration of an accounting software vendor in the authority
  8. Submission of application for a tax residency certificate
  9. Review of tax residency certificate application and issuance of electronic certificate to a registrant with the authority
  10. Review of tax residency certificate application and issuance of electronic certificate to a legal person not registered with the authority
  11. Review of tax residency certificate application and issuance of electronic certificate to a natural person not registered with the authority
  12. Printed paper copy of issued electronic tax residency certificate under item number 9,10, and 11 of this description
  13. Submission of application for a certificate of commercial activities
  14. Review of certificate of commercial activities application and issuance of an electronic certificate
  15. Printed paper copy of the electronic certificate of commercial activities issued under item number 14 of this description.

What are the documents required for tax residence certificate?

  • Valid Trade License. 
  • Certified Articles of founding, establishment, incorporation, institutionalizing or MoA. 
  • Copy of identity card for the partners, or directors or Company Owners. 
  • Copy of passport for the directors, or partners or company owners.  
  • Copy of Residential Visa for the partners or directors or company owners. 
  • Certified audited report. 
  • 6 months certified bank statement
  • Certified Tenancy Contract / Title Deed.

What is the procedure to obtain tax residence certificate?

An online account is created for the applicant on FTA. Tax residence certificate application form is filled out and submitted with the supporting documents. Then, it’s reviewed and approved by the authority. Once, the approval is done, make your fees payment electronically. After payment, the certificate is generated and available at the authority office or couriered to your domestic address. The complete process takes about 2 to 4 weeks.

What are the recent updates on tax residence certificate in UAE?

Commercial activities certificates and tax residency allows investors in the UAE to benefit from DTT or double taxation avoidance agreements. It also supports companies and individuals from double taxation with the aim of preventing duplication, in addition to recovering the VAT imposed on Emirati businesses in various countries. 

The director general of FTA announced that a joint working group worked on necessary arrangements to ensure smooth transfer of certificates from ministry to the FTA!

The UAE’s international tax framework enhances significant protection and several benefits for both expatriates and companies. 

DTT ensures taxing rights and make sure individuals or businesses are taxed only once. This clarifies that how certain type of income like dividends, pensions, and property income should be taxed. They lay out special rules on non-discrimination to prevent different treatments based on the factors such as residency and nationality. 

UAE has DTT treaties with almost 117 countries including UK, Japan, Germany, Egypt, and India. The tax residence certificate avoids a wide range of taxes that include withholding tax, apart from providing refunds for VAT incurred by the business, where UAE has established reciprocal management. At present, 22 countries allow VAT refund under reciprocal management with UAE!