The Federal Tax Authority (FTA) issued the Tax Procedures Guide TPGTR1 on Tax Residency Certificates (TRC) and tax residency in the UAE. This Guide is designed to assist individuals and businesses to effectively determine taxability and provides a comprehensive explanation of tax residency rules in the UAE.
Key Aspects of Tax Residency in the UAE
The Guide outlines the following tax residency classifications:
- Resident Persons under the corporate tax law
- Tax Residents under UAE domestic law
- Tax Residents under Double Tax Agreements
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Resident Person Under UAE Corporate Tax Law
Juridical Persons (Businesses & Entities)
Any entity is deemed to be a Resident Person for the purposes of UAE corporate tax if registered in the UAE or if effective management and control is exercised within the UAE.
Place of Effective Management and Control
The tax residency of overseas companies in the UAE is determined based on whether the company’s place of effective management and control is within the UAE.
Who Makes the Key Decisions – Management and Control Test
The location where key decisions are made is significant for determining tax residency.
Location Test for Tax Residency
- Board Meeting Locations: The places where meetings are held are relevant.
- Virtual Decision-Making: The location where decisions are made is important.
- Shareholders and Delegated Authority: The place from where management makes decisions determines tax residency.
Double Tax Agreements and Tax Residency UAE
Legal persons are considered tax residents if they are liable to tax in the UAE, incorporated in the UAE, or effectively managed in the UAE.
Tax Residency Rules for Individuals in UAE
A natural person is deemed a UAE tax resident if they meet physical presence requirements or have their center of vital interests in the UAE.
Presence Test
- Physical presence in UAE for 183 days or more.
- Presence in UAE for 90 days with residency or business/employment in UAE.
How to Apply for UAE Tax Residency Certificate (TRC)
A Tax Residency Certificate issued by the UAE Federal Tax Authority confirms the tax residency status of an individual or entity.
Supporting Documents Required for TRC Application
For Individuals:
- 6 Months UAE Bank Statement
- Utility Bill
- Passport, Visa and Emirates ID
For Businesses:
- Trade License
- MOA
- Financial Statements
Tax Residency Certificate Application Process UAE
- Application Submission
- Document Upload
- Application Review
- Processing Payment
- Issuance of Certificate
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Corporate Tax and Tax Residency Advisory UAE
Businesses are advised to review Corporate Tax in Dubai and seek expert services of Tax Consultants in UAE to ensure tax compliance. You may also Contact us for tax residency and corporate tax advisory services.
