A Tax Residency Certificate was issued for eligible natural and legal persons to take advantage of double taxation avoidance agreements on income signed by the UAE. It is issued by the Federal Tax authority (‘FTA’) on an application made by eligible residents of the UAE.
- Natural persons: The applicant must have been a resident of the UAE for at least 180 days in a Financial Year.
- Legal persons: To be eligible to apply for a TRC, the legal person must have been established for at least one year. Financial accounts must be audited or prepared by an accredited audit firm and attached with other required documents to the application.
Note: Offshore companies cannot apply for the service because they are not listed in the Double Taxation Avoidance Agreements.
Benefits of TRC
To benefit from a DTA, a person generally requires a TRC to prove that the person is resident in another country and subject to tax in that country. The TRC is a certificate issued for eligible government entities, companies, and individuals to take advantage of agreements of double taxation avoidance on income to which the UAE is a signatory.
The UAE has issued a DTAA decree with 135 countries, including the UK, Japan, Germany, Egypt, and India, to promote economic relations and prevent tax evasions. 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 refunds under reciprocal management with UAE.
What Is the Validity of TRC?
The validity period of a tax residency certificate in the UAE is one year from the date of issuance.
How to Obtain TRC?
To apply for a Tax residency certificate, One needs to register on the FTA portal and create a tax certificate account through the below details and documents:
- Email Id;
- Mobile Number ;
- Entity’s registration No.
For Natural Persons:
For legal Persons:
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