First of all we would like to clarify what tax residency certificate is and in which cases it is useful to receive such. By its definition tax residency certificate (also sometimes called tax domicile certificate) is an official document issued by respective authority confirming tax residence of a company or a legal entity in a given country.
In case of UAE such tax residency / domicile certificate is issued by the Ministry of Finance of UAE. The certificate can be received for a company registered in UAE as well as for persons who have residency visa /permanently reside in the UAE. Validity of tax residency certificate is one year from the date of its issue.
Important to note that, when speaking about tax residency certificate for UAE companies – only onshore UAE companies can receive such certificate. Offshore companies (also frequently called International Business Companies) can not receive such tax residency / domicile certificate. UAE offshore companies can receive other type of certificate – tax exemption certificate, however this is different to tax residency certificate and does not provide the possibility to use double tax treaties advantages.
For UAE onshore companies, the tax residency certificate is the document which permits to fully utilize the advantages of the extensive double tax treaties network the UAE has signed with large number of countries from different regions of the world.
Same applies for physical persons – residents of UAE. Such persons, being in the possession to receive tax residency certificate, can also use the double tax treaties advantages available for physical persons.
In the cases when there is generally no double tax treaty between UAE and some specific country such residency certificate can also be of the great importance as it serves at the official confirmation on the tax residency of a person or a legal entity in United Arab Emirates.
Procedure to receive tax residency certificate – the exact procedure and the compulsory documents depends on the type of the certificate – for physical person or for a company. In general – for company you would need latest audited balance statement and other documents required to confirm that the company is active. For a person – confirmation on availability of residential place in UAE – in ownership or tenanted as well as some other documents.
When receiving tax residency / domicile certificate in UAE you shall also be aware of the rules and regulations applicable in other countries. For example, if you live part of the time in UAE and receive UAE tax residency certificate, but also spend a lot of time in other country – such other country, in spite of your tax residency certificate from UAE, may recognize as the tax resident of that given country as according to the applicable local rules. Thus receiving tax residency certificate and all it implications shall be consulted with qualified professionals.
Our company, being fully licensed and authorized corporate service provider in United Arab Emirates, assists in receiving all types of permits, licenses and certificate in UAE including the tax residency / domicile certificates for physical persons as well as companies.
