Tax in the UAE – Obtaining a Tax Residency Certificate

The UAE has the largest tax treaty network in the world, with 90 double taxation agreements in force. In addition to this, the country is committed to signing tax treaties with additional countries. This makes UAE one of the most attractive locations for businesses and individuals looking to avoid double taxation.

Being a member of the GCC is very beneficial for the UAE. It allows the country to gain access to an incredible economic network, which in turn helps the country achieve its goal of income diversification. Furthermore, it allows the exchange of goods and services between members, and it makes resolving any tax issues much easier.

UAE businesses can now take advantage of double tax treaties between the UAE and other countries. These treaties ensure that residents and companies in the UAE won’t be taxed twice on the same type of income. In addition, they also provide clarity on how companies should pay taxes on certain types of income.

The UAE has many trade agreements which can reduce withholding taxes on dividends, interest and royalties. Additionally, the UAE has no withholding tax rate on dividends, interest and royalties if a company has shareholders from other countries. For individuals, depending on the agreement in place, their UAE income may be exempt from income tax in their home country.

Double Taxation Avoidance Agreements (DTAA) are in place to ensure that residents and non-residents of the UAE do not have to pay taxes twice on profits made in the country. To benefit from this, companies or individuals must be in possession of a Tax Domicile Certificate (TDC), sometimes called Tax Residency Certificate (TRC).

Tax residency certificate in UAE

The Tax Residency Certificate is open to any company that has been fully operational in the country for at least a year. Companies with headquarters outside of the country (incl. offshore companies) are ineligible, and must apply for the Tax Exemption Certificate instead.

Residents of the United Arab Emirates who have been in the country for more than 180 days may apply for a tax residency certificate. Those who apply must have a valid UAE resident visa or be able to show proof that they will obtain one. This certificate is especially beneficial for those who live in countries that do not have a double taxation agreement with the UAE.

If you need any help with double taxation as an individual, company or resident in the UAE, or if you need assistance with any other tax matter in Abu Dhabi, Dubai or further afield, please get in touch with us.

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