Tax Residence Certificate in UAE

UAE Tax Residence Certificate (TRC) officially certifies that a company or individual is a tax resident in the UAE.

This document allows to use benefits of international double tax treaties (reduced tax rates or full tax exemption, foreign tax credit, etc.). To date, the UAE have concluded double tax treaties with 137 countries.

The UAE Tax Residence Certificate is provided only for a resident company that has been operating in the UAE for at least one year. Offshore companies or rep offices of foreign companies registered in the UAE are not eligible for the TRC as they are not covered by double taxation treaties.

Only a company operating within the boundaries of the UAE territory or free zone may apply for a TRC. Offshore companies are not entitled to enjoy the benefits of double tax treaties and the advantages of obtaining the Tax Residence Certificate in the UAE.

TRCs in the UAE are issued by the Federal Tax Authority (FTA). You can obtain both soft (with digital signature of the tax authority) and hard copy of the certificate. The service is available for residents who have and do not have a UAE tax number.

The UAE TRC is valid for one year from the beginning of the financial year selected by the applicant.

Legal entity is a tax resident of the UAE

A company may be considered a UAE tax resident if it meets one of the following criteria:

• Established in the UAE (including Free Zones residents).
• Managed and controlled by authorized persons from the UAE territory.
• Other criteria as may be determined by a decision of the UAE Cabinet of Ministers

• Copy of the company’s trade license authorizing the company to operate in the UAE.
• Copy of the company’s Articles of Association and Memorandum of Association.
• Confirmation of the powers of authorized persons (from the Memorandum of Association or Power of Attorney), as well as copies of their passports and Emirates ID cards (if available).
• Audited financial statements signed and stamped by the auditor for the year in which the applicant wishes the company to be considered a UAE tax resident, or for the previous year.
• Bank statement of the company’s bank account covering 6 months of the financial year for which the application is submitted.
• Certified copy of the lease agreement for the office premises where the company operates.

It should be noted that if a company needs to present a TRC Certificate UAE to a foreign party, which is always necessary to obtain benefits of double tax treaties, it must be specifically legalized for the country in which it will be used.

Attention! The TRC cannot be issued for any part of a future tax period, nor can it be issued before the effective date of the Double Tax Treaty for the selected country.

According to UAE Cabinet Decision No. 85 of 2022, effective from March 1, 2023, an individual is considered a UAE tax resident if one of the following conditions is met:

• Individual’s usual or principal place of residence and center of financial and personal interests are in the UAE, or individual meets the conditions and criteria determined by a decision of the Minister of Finance.
• Individual has been in the UAE for 183 days or more or for 12 consecutive months.
• Individual is a UAE citizen or resident (holder of residence permit), or citizen of any Gulf Cooperation Council country and:
  a) resides in the UAE for 90 days or more in 12 consecutive months, and
  b) owes real estate or is employed or runs business in the UAE.

If you meet any of these criteria, you have the right to apply to the UAE Federal Tax Authority for an individual TRC.

There are two types of tax certificates for individuals in the UAE:

1. Tax Domicile Certificate/Tax Residency Certificate for Treaty Purposes can be obtained if you reside in the UAE for at least 183 days within the year for which the application is submitted (for the period after 01.03.2023).
2. Tax Residence Certificate for Domestic Purposes can be obtained even without residing in the UAE for at least 90 days within one year if the other conditions are met.

The difference is that a UAE Tax Residence Certificate for Domestic Purposes is issued for use in the UAE, while a UAE Domicile Certificate is issued for use in the country specified in the certificate and permits to use the benefits of double tax treaties (for countries that have ratified the relevant treaties with the UAE).

Please note that the Certificate of Tax Residence for Domestic Purposes expressly states that it cannot be used for double tax treaties with other countries. Therefore, if you require a UAE Tax Residence Certificate for submission to the tax authorities of a foreign country, it is advisable to check in advance with the tax authority whether such a certificate will be accepted, or to order a UAE Domicile Certificate residing in the UAE for 183 days or more.

• Copy of residence visa, passport and Emirates ID.
• Certified copy of the rental agreement or electricity bill in the name of the applicant, or a title certificate in case of ownership of the property.
• Source of wealth statement (salary certificate /shareholder certificate / copy of the individual entrepreneur’s trade license /lease agreement for renting out your own real estate / letter to the FTA on the use of accumulated income or personal investments/confirmation of income from the sponsor).
• Bank statement from the UAE bank with the bank’s seal on each page for 6 months of the financial year for which the application is submitted.
• Confirmation of stay in the UAE, i.e. Entry and Exit Report from the Federal Service for Identity and Citizenship or a local authorized government body.
• Tax forms (if available) of the country to which the certificate should be submitted

1. The applicant has been in the UAE for more than 183 days:
   – Passport (mandatory) and Emirates ID/ UAE visa, if available.
   – Proof of stay in the UAE, i.e. Entry and Exit Report from the Federal Service for Identity and Nationality or local authorized government authority.
2. The applicant has been in the UAE for less than 183 days but not less than 90 days:
   – Passport (required) and Emirates ID/ UAE visa, if available.
   – Proof of stay in the UAE, i.e. Entry and Exit Report from the Federal Identity and Nationality Office or local government authority.
   – Source of Income Certificate /Salary Certificate/other proof of doing business in the UAE or proof of permanent residence (Real Estate Ownership Certificate, EJARI, utility bill or long-term lease agreement).
3. The applicant has been in the UAE for less than 90 days:
   – Passport (mandatory) and Emirates ID/ UAE visa, if available.
   – Proof of stay in the UAE, i.e. Entry and Exit Report from the Federal Identity and Nationality Authority or local authorized government authority.
   – Proof of financial and personal interests (place of employment, family and social relationships, cultural or other activities, country of doing business, and any other relevant facts and circumstances to be considered in determining whether the center of the individual’s financial and personal interests is in the UAE).
   – Proof of permanent residence (Real Estate Ownership Certificate, EJARI, utility bill, or long-term lease).

Smart Advisors team can provide you with the certificate at the cost starting – from AED 7200.

Additional fees to be paid if the process for obtaining Tax Residence Certificate implies:

• Provision of the certificate in hard copy by the tax office – from AED 640;
• Certification by the tax office – from AED 640.

Delivery time: Issuance of Tax Residency Certificate usually takes 13-18 working days