Tax residency certificate, also known as Tax domicile certificate, is issued by Federal Tax Authority as per the provisions of avoidance of double taxation agreements. The certificate is valid for a year and is issued to individuals as well as companies.
What is a double taxation avoidance agreement (DTAA)?
When two countries impose a tax on the same taxpayer on the same tax base, it is termed as double taxation. To avoid this, countries sign a tax treaty. UAE has entered into a double taxation avoidance agreement with more than 100 countries. In 2018, the country signed the treaty with Saudi Arabia, the first GCC country on the list.
It was the Ministry of Finance that was in charge of issuing tax residency certificates until recently. Now the issuing authority has been changed from MoF to the Federal Tax Authority.
Eligibility for Tax Residence Certificate in Dubai
Eligible
- A company operating in UAE mainland
- Free zone company
- An individual investor/business owner
- An employed individual
Not Eligible
- Branch of a foreign company
- Offshore company
- A non-employed individual (with a spouse visa)
Objectives of UAE tax residency certificate
- To show the status of an individual or corporate in the country
- To avoid paying taxes in two countries
- Ease the process of cross-border trade and investment flows
- Encourage the development goals of UAE
- Economic diversification
If you wish to avail tax domicile certificate in UAE or if you have any query related to it, connect with Hallmark Auditors. Hallmark has vast experience in offering auditing services, professional tax planning, and structuring services for international clients and also helps entrepreneurs and firms in starting a business in Dubai through company registration, incorporation, and legal consulting services. If you need any help with tax residency certificates, feel free to contact us. We’ll be glad to assist you.