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Tax Resident Status and Certificate of Tax Residency in Dubai, UAE

Article image: Tax Resident Status and Certificate of Tax Residency in Dubai, UAE

Residence for tax purposes is a well-known concept for entrepreneurs. Tax or fiscal residency is a set of regulations that vary from jurisdiction to jurisdiction and are mandatory to be strictly followed. They predetermine the taxes you have to pay as well as the country they have to be paid to. Your tax residency governs the amount and type of taxes you would need to pay and the country where such taxes are due.

As according to general praxis, it is necessary to spend over 180 days within the country in order to become its tax resident. Mainly, this applies to individuals. However, to be considered tax resident in a certain country other criteria may apply as well such as ownership of real estate or presence of financial interests in the country.

Tax Residency Certificate in United Arab Emirates is a document confirming that an enterprise or an individual has the status of a tax resident in the UAE. In case of Dubai, the Certificate of the tax resident is issued by the Ministry of Finance of the UAE.

What shall be done in order to obtain tax residency in the UAE?

To become a tax resident in the jurisdiction of the UAE, you will be required to file a set of standard documents, but most important - you will have to obtain the residence visa first. This can be done by means of purchasing real estate on the territory of UAE or registering a company in the Emirates.

You will be also required to file an immigration report for the purpose of confirming your trips to the UAE.

With our assistance the procedures is quite simple and straightforward. Our company will help you in preparing and filing all necessary documentation. Get in touch with our consultants and we will provide an all round assistance on the obtaining of the permanent visa and the tax residence certificate.

If you are running a company willing to become a tax resident in the UAE, the company must be a non-offshore one, while company’s CEO has to be the resident of the United Arab Emirates.

Please note that tax residence in the UAE does not mean that the authorities of other countries will accept it. What does it mean practically? If you have business in some other country, the government of that country will still impose taxes on your enterprise. Be careful in order to avoid double taxation.

Tax residence certificate of the UAE can be received by either individuals or enterprises. After obtaining it, you will be able to enjoy a number of benefits such as tax privileges and possibility of getting visas for all family members. Tax privileges promote the success of your business and confidence in its future perspectives.

Note that there is no personal income tax in the UAE (except for income tax on real estate which comprises 5% of rental income and is charged automatically). The same refers to companies located in the UAE – there is no corporate tax. However, the authorities introduce VAT with the rate of 5% - in force since 2018.

As for the validity of the certificate, it is issued annually and is valid for one year from the date of its issuance.

What is the certificate of tax exemption?

The certificate of tax exemption can be obtained by an offshore company in the UAE. It differs from the certificate of a tax resident – it liberates you from a number of the taxes, but does not confirm the tax residence of the company.

Conclusion on residency and tax in the UAE

Tax residence certificate confirms your status of a tax resident of Dubai or any other UAE Emirate. It can be obtained by both individuals and UAE companies. This document will allow you to enjoy the tax free environment of the free trade zones and a number of other benefits.

It will take you about 6 months before you can start the process to obtain the certificate. The same goes for companies.

The certificate can be obtained retrospectively, meaning that the period of your previous stay can also be taken into account when issuing residence status confirmation under the condition that the respective documents are available.

If you need support in obtaining a tax resident certificate, please, contact us and our consultants will help you to go through all necessary procedures.

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