The UAE’s Taxation Residency Certificate – Tax domicile in the UAE

trc201114 The UAE’s Taxation Residency Certificate - Tax domicile in the UAE

The UAE’s Taxation Residency Certificate – Tax domicile in the UAE.

Effective 14th November, 2020, the Federal Tax Authority (FTA) has set up the mechanism of issuing the Tax Residency Certificate (TRC) to the taxpayers in the UAE. There are two types of residency certificates that the FTA will be issuing. These are:

  1. Tax Residency Certificate; and
  2. Commercial Activities Certificate for the UAE resident.

The Taxpayer can apply for the TRC certificates as Natural Person or Legal Person/Entity, for which their place of residency and Establishment is in the UAE. Tax residence in the UAE allows the Taxpayer to use various tax privileges. These include the following:

  • Ability to apply the treaties on avoidance of double taxation;
  • Protection from Automatic Exchange of Information;
  • Confidentiality of information about owners and assets;
  • Gaining income from activities around outside the UAE without paying taxes;
  • Distribution and withdrawal of deposit without tax burden; and
  • Confirmation of centre for management and control of the business in the UAE;

The Commercial Activities Certificate (CAC) which is a certificate enable Taxpayer to refund VAT paid in advance outside the UAE, whether or not a Double Tax Avoidance Agreements (DTAAs) with the UAE are applicable.

For individuals and entities to meet the residency and establishment requirements, the following must be met:

  • Resident and staying in the UAE with residency address, place of business and residency visa;
  • Revenue source in the UAE; and
  • Control centre confirmation for businesses.

For more details on how to request the TRC, or if you need any help with the same, please do not hesitate to contact us.

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