Guide to Tax Residency Certificates and Commercial Activities Certificates in the UAE

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Overview

In the UAE, the Federal Tax Authority issues Tax Residency Certificate (TRCs) and Commercial Activities Certificates (CACs) to businesses and individuals. These certificates are essential for tax purposes because they allow access to the benefits under the Double Taxation Avoidance Agreements (DTAA) and adherence to specific commercial activities. Here is a step-by-step guide on how to obtain the certificates, process, documents, and fees

What is a Tax Residency Certificate (TRC) ?

A Tax Residency Certificate TRC refers to a certificate that serves the purpose of attesting a particular individual’s or legal entity’s residency within a country. With this tax residency certificate, availing of benefits under DTAA and non-deduction of tax on incomes for which income taxes are paid elsewhere outside UAE will be exempt.

The TRC, which is the shortened term for “tax domicile certificate in UAE“, is definitely important if your income is taxable in more than one country. This would then allow you to do more efficient tax planning as well as derive both financial and economic benefits.

Note: A Double Taxation Avoidance Agreement refers to a treaty signed between two countries, with significant cross-border transactions to avoid taxes on the same income.

What is meant by Commercial Activities Certificate?

The Commercial Activities Certificate, alternatively referred to as the Certificate of Status of Business or Business Person, makes the holder of the certificate eligible for a refund if any, advance VAT paid. In several instances, business transaction outside the UAE would require advance payment of VAT. For the parties involved in such transactions, this Commercial Activities Certificate shall enable them to recover the refund of such advance tax paid

Why TRCs and CACs Matter?

These certificates help individuals and companies:

  • Minimize double taxation by availing benefits under international treaties.
  • Compliance with tax regulations in UAE  for specific business activities.
  • Strengthen your tax position when operating internationally.

Required Documents

Tax Residency Certificate for Treaty Purposes

Individuals:

  1. Passport, Emirates ID, and valid residence permit
  2. Lease agreement or utility bill certified
  3. Salary certificate or proof of income
  4. Bank statement for the last 6 months
  5. Entry and exit report
  6. Proof of permanent residence, such as title deed

Legal Entities:

  1. Trade license
  2. Memorandum of Association
  3. Audited financial reports
  4. Office lease agreement
  5. Bank statement for the last 6 months

Government Entities:

  1. Trade license
  2. Request letter from the applicant

Tax residency certificate for internal purposes:

  • Individuals Spending 183+ Days: Passport, Emirates ID, entry/exit report
  • Individuals Spending 90-183 Days: Passport, Emirates ID, proof of income, proof of residence
  • Individual Expenditure Time Span Less Than 90 Days Passport, Emirates ID, Entry/Exit report Financial proof

Fee Payable for Tax Residency Certificate

For submission, AED 50
• AED 500 for all business activity and tax registrations.

• AED 1,000 for natural people who are not tax registrants
• AED 1,750 for legal persons who are not tax registrants

Certificate of Tax Residency for Domestic Uses:

• AED 500 for all tax registrants and commercial activity; AED 1000 for natural persons who are not tax registrants; AED 1750 for legal persons who are not tax registrantsn; • AED 50 for filing fees

Certificate of Commercial Activity:

• 500 AED

Regarding Printed Certificates:

• There will be an additional 250 AED charge for each hard copy certificate that is requested.

Important FAQs

  • Digital certificates are downloadable from the EmaraTax portal.
  • Printed copies are delivered via Emirates Post for an additional AED 250 per copy.
  • The certificates are valid for one year from the selected financial year.

Obtainable through the UAEICP Application.

  • No, your company must have been established in the UAE for at least one year to apply for a TRC.

The Tax Residency Certificate should be requested for a period (financial year) subsequent to the company's founding date.Verifying that the chosen year has already passed is crucial.

Terms and Conditions

  • Individuals must reside in the UAE for at least 183 days for treaty purposes.
  • Offshore and foreign branch companies are not eligible for TRCs.
  • TRCs cannot cover future financial years.
  • Applications are processed for the current year only.

Unicorn Global Solutions simplifies the process of obtaining  Tax Residency Certificates(TRCs) and Commercial Activities Certificates (CACs) in the UAE by providing clear guidance on regulations, documentation, and application procedures. As compliance requirements continue to evolve, we assist individuals and companies in understanding their eligibility, gathering the necessary documents, and navigating the Federal Tax Authority (FTA) portal seamlessly. Our expert-driven, streamlined approach ensures a hassle-free experience, saving you time and effort while keeping you fully compliant with UAE tax laws. Contact us via  whatsApp  or call us today for personalized assistance in managing your tax residency and commercial activity certifications efficiently.

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