Things You Should Know about The Tax Residency Certificate UAE in 2023
In 2023, the Tax Residency Certificate (TRC) continues to be a significant document for individuals and companies in the United Arab Emirates (UAE) seeking to establish their tax residency status. The TRC serves as proof of tax residency in the UAE and is essential for availing tax benefits and exemptions, such as avoiding double taxation and accessing tax treaty benefits. This short introduction provides an overview of the key things one should know about the TRC in the UAE in 2023, including eligibility criteria, application process, compliance requirements, and the importance of seeking professional assistance.
UAE Cabinet Decision No. 85 for Tax Residency Certificate 2023
The UAE Cabinet Decision No. 85 of 2022, effective from March 1, 2023, provides clear definitions and guidelines for determining tax residency status of individuals and legal entities in the UAE.
According to the new rule, an individual will be considered a tax resident of the UAE if they have the strongest work, personal, and economic ties to the country, making it their "place of residence".
The decision also states that all days or parts of days when an individual is physically present in the UAE will be counted towards meeting the 183-day or 90-day thresholds for tax residency. This includes both full and partial days, making it easier for expatriate residents to qualify for a tax residency certificate, even if they do not own a permanent residence in the UAE, as long as it is continuously available to them.
What about Legal Persons falling under the Tax Treaty Clause?
In specific circumstances where a Tax Treaty applies as an international agreement, the Tax Treaty will remain applicable. It is crucial to seek professional advice to determine if your company is eligible for this clause.
Individuals or companies who are assessing their tax residency can apply for a tax residency certificate from the tax authority, following the procedure outlined in the Resolution. The application process has been automated on the FTA website for ease of use. Experienced tax consultants in the UAE can provide valuable assistance in navigating this process.
The tax residency certificate is often a necessary requirement for UAE residents who intend to avail tax benefits or privileges in another jurisdiction under the corresponding tax treaty. It is important to ensure compliance with the requirements of the tax residency certificate for such purposes.
Simple Steps to get your Tax Residency Certificate UAE in 90 days
To register for a Tax Residency Certificate account with the Federal Tax Authority (FTA), follow these steps:
- Go to the FTA website and create a personal account.
- Access your personal account dashboard.
- Click on the option to "Create Tax Residency Certificate."
- Complete the setup process as prompted.
- Once your application is submitted, remit the required fees upon FTA approval.
- If FTA attestation is required for a tax form, mail the completed form covering the financial year, with the applicant covering postage and return fees.
It is important to ensure that your documents are in order before applying for the Tax Residency Certificate, as the application process may take approximately 45 minutes. Avoiding plagiarism, it is essential to use original language and not copy text from any source.
The list of documents needed for Tax Residency Certificate UAE varies depending on
- If the applicant is an individual (natural person).
- If the applicant is a legal entity (company).
- If the legal entity is a government entity.
- If the individual has spent more than 183 days in the UAE.
- If the individual has spent less than 183 days in the UAE but equal to or more than 90 days.
- If the legal entity is a juridical person.
- If the legal entity is a juridical person (government entity).
How long does the FTA take to get back after submitting your UAE Tax Residency application online?
- For completed applications received by the FTA, the processing time is 3 business days
- In the case of hard copy submissions, it takes 7 business days from the date of payment completion for certificate fees.
- for applicant tax form FTA attestation, the FTA requires 5 working days from the receipt of the completed form.