Tax Residency Certificate to be issued by the Federal Tax Authority
The Tax Residency Certificate allows both natural and legal persons to benefit from the Double Taxation Avoidance Agreement, for which the U.A.E is a signatory.
The Agreement ensures that individuals and businesses are only taxed once. The U.A.E benefits from double tax avoidance treaties with over 117 countries, which provides important advantages to businesses and investors in the country. In addition, the Tax Residency Certificate will allow VAT refund for businesses in countries in which the U.A.E has a reciprocal agreement. Currently, the U.A.E has a reciprocal agreement with 22 countries, which include: Bahrain, Germany, Kuwait, Lebanon, and Saudi Arabia.
Previously, the issuing of tax residency certificates was overseen by the Ministry of Finance. The change of regulatory authority is in line with Cabinet Decision No. 65 of 2020 on Fees for Services provided by the FTA. This change aims to increase efficacy by assigning the service to the FTA who performs similar functions and will be able to deliver effective results.
The applications can be made through the FTA’s e-Services Portal and streamline the process by providing the applicant with a list of all the requests available with regard to tax certificates.
The new service will provide ease to those registered with the tax system as all relevant data will be available on the Portal, and applications for the certificates can be made through a quick digital process.
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Click here to read ESR update.
Click here to read major amendment in the UAE tax litigation.
