Tax Residence Certificate: What is it and how does it work?

Every year, tax residency in the United Arab Emirates becomes more and more popular among entrepreneurs and individuals, as the government of the country implements a progressive tax policy that offers many benefits. In addition, the United Arab Emirates has double taxation treaties with more than 100 countries, making it even more attractive for international business.

Let's find out what the UAE tax residency certificate is, what its benefits are, and how to obtain it.

What is tax residency?

Tax residency is a certain status granted to legal entities and individuals (tax residents) for tax purposes. This status is a kind of "binding" of a person to a certain country, which imposes the obligation to pay taxes on income.

Tax residency provides access to various tax benefits and exemptions, but may also entail certain tax liabilities and restrictions.

It should be noted that the country of tax residency for an individual may differ from his/her citizenship, and for a legal entity from its country of registration.

UAE Tax Resident: How to become one and what documents do I need to submit?

A tax residency certificate can be obtained by any company in the UAE. It is also available to individuals who have lived in the Emirates for at least six months.

Individuals require a package consisting of the following documents to obtain it:

• Applications from individuals;
• Copies of passport;
• National Identity Card;
• Emirates Resident Visa;
• A certified copy of the rental contract (for the last six months), which confirms the fact of the individual's residence in the territory of the state;
• A statement from the Immigration Department indicating the number of days spent by the resident in the Emirates;
• Bank statement of a personal account (for the last six months);
• A document (certified) confirming the source of income;
• Receipt of payment of fees.

It takes approximately 30 days for the certificate to be issued.

Legal entities can only obtain a UAE tax residency certificate after conducting business in the country for one year. The package of documents that they have to submit consists of:

• Letters of application from a legal entity;
• Copies of passport, UAE visa and Emirates ID of the head of the legal entity;
• A certified copy of the company's articles of association;
• Agreement confirming the lease of the office;
• Bank statement of financial transactions for the last six months;
• A certified copy of the company's financial report audited by a certified auditor;
• Receipts for payment of the fee.

As for individuals, it takes about one month for legal entities to obtain a certificate.

UAE tax residency: the role of professional advisors in obtaining it

The process of obtaining tax residency is quite complex and requires specialized knowledge of taxation and local legislation. Professional advisors will provide you with the necessary expertise and support in all matters to help you make the most of your tax benefits. Working with specialists will save you time and money, as well as provide you with legal certainty in the area of UAE tax residency.

What is a UAE Tax Residence Certificate?

Tax Domicile Certificate is a document confirming that an individual or legal entity is a tax resident of the Emirates. It contains information about the holder, their tax status, date of issue and expiration date.

How does it work? Let's say you wish to become a tax resident of the Emirates. To do this, you need to contact the tax authorities of this country and request the issuance of a certificate. After receiving it, you will be able to pay taxes in the UAE and receive certain benefits that are available only to tax residents.

Who issues the UAE tax residency certificate and for what period of time?

In the Emirates, the certificate is issued by the competent authority - the Federal Tax Authority. It provides an opportunity to pay taxes only in the UAE. The certificate is issued for one tax year and usually needs to be renewed annually.

What are the benefits of a Tax Domicile Certificate?

A tax residency certificate can be useful for companies and individuals who want to optimize their tax burden. For example, if you are a citizen of one country but wish to pay taxes in another country, the certificate can help you establish your tax status in that country and receive certain benefits.

For citizens and legal entities of Russia, Belarus, Kazakhstan and other countries, obtaining the UAE tax residency status allows you to enjoy the following benefits

1. Loyal tax system - the country has a minimum number of taxes;
2. Confidentiality - information about taxes is not subject to disclosure (third parties can get access to information only by court order);
3. Ability to receive tax-free income from business activities in another country;
4. Open markets and free currency exchange, creating a favorable environment for business and investment;
5. No tax residency requirements: the Emirates does not require its tax residents to be permanently resident in the country;
6. Developed infrastructure: the resident has access to world-class medical care, some of the best educational institutions in the world, restaurants, shops and much more.

Contacts

United Arab Emirates, Dubai, Barsha Heights, I-Rise Tower, 29th Floor, Office 5