A Tax Residency Certificate (TRC) is a certificate issued by the Federal Tax Authority in UAE to companies established in the UAE and to individuals residing in the UAE. This certificate is issued to establish the tax residency status and allow the applicant to benefit from the double taxation avoidance agreements. This certificate is also called a Tax Domicile Certificate.
The UAE has Double Taxation Avoidance Agreements (DTAA’s) with many nations throughout the world. Double Taxation Avoidance Agreements (DTAA’s) prevents non-UAE residents from being taxed in both their home countries and the UAE. An individual can be a resident of multiple countries but only a tax resident of one, according to the UAE double taxation avoidance agreements.
The Tax Residency Certificate is a document that demonstrates you pay your taxes to a certain country and thereby avoids double taxation.
The UAE Federal Tax Authority (FTA) issues the Tax Residency Certificate (TRC), which is valid for one year. International enterprises operating in a mainland or UAE Freezone can apply for this certificate and take advantage of the double taxation agreement. To take advantage of the double taxation treaties, you must get a Tax Residency Certificate (TRC). Application for TRC is now available through FTA’s Emara tax portal.
Tax Residency Certificate (TRC) for Companies
Terms and Conditions:
- A legal person (company) applying for a tax residency certificate for treaty purposes (outside the UAE) must have been established in the UAE for at least one year.
- Foreign company branches and offshore firms are not eligible for tax residence certificates because they are not considered to be established in the UAE.
- The Tax Residency Certificate does not cover a future period from the selected start date of the financial year. This applies to both treaty purposes (outside) and Domestic Purposes (Inside UAE) Only Government entities are eligible to do so.
- A legal person must be registered for VAT to get a commercial activity certificate.
Required documents applying for Tax Residency Certificate (TRC) for Companies
- A copy of a valid trade license (valid for at least three months prior to application) and should be active for more than one year.
- Authorized signatory passport copy, Emirates ID and Permits of residence (Residence Visa Copy) – (Front and back side)
- A copy of the Articles of Association and Memorandum of Association.
- A certified copy of the tenancy agreement (Ejari) (valid for at least three months prior to application).
- VAT registration certificate and TRN number (if available).
- Active email ID and mobile number .
- FTA registered email ID (if available).
- Utility bills e.g.: DEWA, DU, etc.
- A certified copy of the audited financial accounts (Financial accounts must be audited or prepared and stamped by an accredited audit firm and must cover the year for which the certificate is requested. If the certificate is requested for the present year, the audit report must cover the past year).
- Bank statements of at least six months for the required year i.e., January to December 2022 (the bank statement should be stamped by the bank).
Tax Residency Certificate (TRC) for Individuals
Terms and Conditions:
- A natural person (Individual) requesting atax residency certificate for treaty purposes (Outside) must have spent at least 183 days in the UAE during the requested year.
- A natural person (Individual) seeking aTax residency certificate for domestic purposes (Inside UAE) can fall into any of the following categories and still apply. (In UAE for more than 183 days, less than 183 days but more than 90 days, or less than 90 days).
- The Tax Residency Certificate does not cover a future. This applies to both treaty purposes (outside) and Domestic Purposes (Inside UAE).
Required documents applying for Tax Residency Certificate (TRC) for Individuals
- Bank statements of at least six months for the required year. for example: – January to December 2023 (the bank statement should be stamped by the bank).
- A copy of passport, Emirates ID, UAE residence visa copy.
- Certified copy of the tenancy agreement (Ejari) (valid for at least three months prior to application).
- Salary certificate.
- Certificate for entry or exit from Federal Authority of Identity and Citizenship.
- Utility bills e.g. DEWA, DU etc.
- Active email ID and Mobile number.
FAQs (Frequently Asked Questions)
Q) What is the Tax Residency Certificate validity period?
A) TRC is valid for one year from the beginning of the financial year selected by the applicant.
Q) How Tax Residency certificate can be obtained?
A) (i) The Tax Residency Certificate will be sent in digital format after the payment is processed to the registered email if a printed certificate is not requested.
(ii) if the applicant requested a printed certificate specify the number of copies and it will be delivered by the courier (Emirates Post) each for an additional fee (AED 250). The applicant will also receive a digital copy of the certificate.
(iii) Delivery is available for local addresses in the UAE only.
Q) How to obtain the Exit & Entry report?
A) Through the Federal Authority for Identity, Citizenship, customs & Port Security Application (UAEICP).
Q) What should be considered when applying for the Tax Residency Certificate?
A) (i) The requested period (financial year) for the Tax Residency Certificate should be after the establishment date of the company.
(ii) It is important to ensure that the selected year has already passed.
Q) What is the required timeframe for a recently established company?
A) A recently established company should have completed one year of operation before being eligible to apply for the Tax Residency Certificate.
How Spectrum Auditing can help you with TRC?
We, Spectrum Auditing can assist you in getting you Tax Residency Certificate without any hiccups as we have clients from Italy, Spain, Mexico, etc availing this service.
Being a pioneer in the field of auditing, accounting, taxation and advisory services, we ensure we keep track of all the changes that are taking place in the UAE with respect to the changes in laws, rules, regulations and keep our clients informed as well as sharing the same information through our blog section or social media handles regularly. Spectrum Auditing will guide you with the laws and regulations of UAE, be it the Value Added Tax (VAT), Economic Substance Regulations (ESR), Corporate Tax (CT), Transfer Pricing (TP), Ultimate Beneficiary Owner (UBO), Anti Money Laundering (AML), etc after reviewing your business.