The United Arab Emirates (UAE) is home to both multinational corporations and small and medium-sized enterprises (SMEs). The tax residency certificate is essential in this regard since it allows qualifying government entities, individuals, and businesses to take advantage of the provisions of double taxation avoidance agreements (DTAs) between the UAE and certain foreign nations. Furthermore, applicants can get VAT refunded on payments made outside the UAE with the commercial activity certificate.

Previously, the UAE Ministry of Finance was responsible for issuing the tax residence certificate. However, the Federal Tax Authority (FTA) will now be responsible for issuing both the tax residency certificate and the commercial activities certificate.

The FTA processes applications for

• Tax residency certificates
• Commercial activities certificates
• Attested paper tax registration certificates
• Warehouse keeper registration certificates
• Registers designated zones for excise tax purposes
• Registers tax agents
• Renews registrations for tax agents
• Registers vendors of accounting software, and more.

Submit the following documents to apply for a tax residency certificate

• A valid business license
• Certified articles of incorporation
• Certified copies of partner
• Director, or company owner identification cards and passports
• Certified copies of residential visas
• Certified copies of the most recent audit
• Certified copies of the most recent six months of bank statements
• Certified copies of the tenancy agreement or title deed are all necessary

Obtaining a tax residency certificate requires

• Registering for an account on the FTA’s website
• Filling out an application
• Attaching any necessary documentation
• Waiting for the application to be reviewed and approved
• Paying any applicable fees via electronic means

The entire procedure usually takes between 2 and 4 weeks to complete.

Recent changes to UAE tax residency certificates highlight their importance in helping foreign investors take advantage of DTAs, preventing double taxation, and easing VAT recovery for Emirati enterprises with a global presence. To facilitate a seamless transition, the Ministry and the FTA have formed a joint working group to oversee the transfer of certificate issuing.

The international tax regime in the UAE is very protective of expats and businesses. When it comes to certain forms of income, such as dividends, pensions, and property income, DTAs set clear criteria to ensure that individuals and corporations are only taxed once. They include anti-discrimination clauses to prevent discrimination on the basis of citizenship or place of residence.

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