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Tax residency certificate in UAE: how to get in 2024

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In September 2022, the UAE government released a set of new tax residency criteria that will come into effect on 1 March 2023. In this article, we will tell you all about the new tax residency rules for individuals and companies, as well as how to get a tax residency certificate in the UAE.

What is UAE Tax Residency?

A tax resident of the country is a person or company that is registered with the tax authority of said country and pays taxes there. Thus, if a person is recognised as a tax resident of the UAE, then his worldwide income will be taxed in accordance with the UAE tax laws.

The possession of the UAE residence visa does not mean that the visa’s owner becomes a tax resident of the Emirates by default.

UAE Tax Residency Rules for Individuals

An individual is considered a tax resident of the UAE, if any of the following conditions are met:

  • If his main place of residence is in the UAE and his vital interests lie in the UAE as well.
  • If he was residing in the UAE for 183 days or more in the last 12 months.
  • If he has been residing in the UAE for 90 days or more in the last 12 months and he is a UAE citizen with a valid residence permit, or holds the citizenship of any country of the Gulf Cooperation Council, and meets any of the following conditions:
    • has a permanent residence in the UAE (must be owned or long-term rental property);
    • is employed in the UAE or has business there.

A person who is considered a tax resident of the UAE may apply for a tax residency certificate.

UAE Tax Residency Rules for Companies

A legal entity is considered a tax resident of the UAE in any of the following cases:

  • It was formed or recognised in accordance with the current laws of the UAE. This does not include branches of foreign legal entities registered in the UAE.
  • It is considered a tax resident in accordance with the country’s tax laws.

Tax Agreements Between India and the UAE

In 1993, India and the UAE signed the Double Taxation Avoidance Agreement (DTAA). This agreement stipulates that local income, including personal income, such as directors’ fees, revenues, salaries and pensions must be taxed in the country where the business is carried out.

For legal entities, to determine the country of residence, it is taken into account whether the company has some kind of an establishment in the country, be it an office, factory, workshop, or any other similar place that would facilitate income-generating business activities.

In contrast to the UAE, India has a much broader tax regime, which covers many types of income. The tax is levied on income, wealth, followed by the collection of VAT and surtax. Often, in order to be able to efficiently track all these taxes, as well as changes in the legislation, legal entities in India need to seek the help of lawyers specialising in taxes.

How to Get Tax Residency Certificate in UAE

A tax residency certificate in the UAE is issued by the Federal Tax Authority. The following documents are required for the certificate’s registration.

Tax Residency Certificate in UAE for Individual

  • an international passport;
  • a valid residence permit;
  • Emirates ID;
  • a certified copy of the rental agreement;
  • a source of income or salary statement;
  • a bank statement issued by a local bank and covering the last 6 months of the fiscal year of the request;
  • an entry and exit report from the Federal Authority for Identity and Citizenship or the competent local government authority.

Tax Residency Certificate in UAE for Company

  • a trade licence;
  • a founding agreement of the organisation;
  • financial statements verified by a certified audit firm;
  • a bank statement issued by a local bank covering the last 6 months of the fiscal year of the request;
  • a certified copy of the memorandum of association (if any).
  • The entire application procedure takes place online on the Federal Tax Authority’s website. The administrative charge for issuing a UAE tax residency certificate costs 500 dirhams (approx. 137 US dollars). The certificate is valid for one fiscal year.
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