Understanding the Tax Residency Certificate (TRC) in the UAE

What is a Tax Residency Certificate (TRC)?

A Tax Residency Certificate (TRC) is an official document that confirms an individual’s tax residency status in a particular country. In the context of the UAE, a TRC indicates that the person is considered a tax resident of the UAE, even if the tax rate is 0%. This certificate is crucial for individuals looking to benefit from the Double Taxation Avoidance Agreement (DTAA) between the UAE and other countries, such as India.

Who Needs a TRC in the UAE?

Individuals who wish to take advantage of the DTAA between the UAE and another country, such as India, may need to present a TRC. By obtaining this certificate, they can prove their tax residency in the UAE, which can help in avoiding being taxed in their home country.

Is Obtaining a TRC Mandatory?

While it is not mandatory for everyone to obtain a TRC, it becomes necessary if there is a requirement to submit it to another jurisdiction. For instance, some individuals may need to demonstrate that they are residents of the UAE and therefore should not be taxed in their home country. In such cases, submitting a TRC in their home country is essential.

Criteria for Obtaining a TRC in the UAE

To qualify for a TRC as an individual in the UAE, you need to meet one of the following conditions:

1. The UAE is your usual or primary place of residence, and your financial and personal interests are located in the UAE.
2. You have been physically present in the UAE for at least 183 days out of 12 consecutive months.
3. You have been physically present in the UAE for at least 90 days out of 12 consecutive months, provided you have a UAE visa or GCC passport and a permanent place of residence, employment, or business in the UAE.

Documents Required for a TRC Application

When applying for a TRC as an individual, you will need the following documents:

• Passport copy
• Residence visa copy
• Emirates ID copy
• Certified lease agreement or proof of source of income
• Bank statements for six months from a UAE bank account
• A report from the General Directorate of Residency and Foreigners Affairs (GDRFA) or the Identity and Citizenship Authority (ICA) proving the number of days spent in the UAE over 12 consecutive months
• Tax forms, if any, from the country where the certificate will be submitted

How to Apply for a TRC

The application process for a TRC is conducted online through the EmaraTax portal. Here is a step-by-step guide:

1. Access the EmaraTax Portal: Visit the EmaraTax portal to start your application.
2. Account Setup: Use your current account on EmaraTax, create a new one, or link an old account related to the previous TRC portal.
3. Select Service: Once logged in, choose “Other Services.”
4. TRN Selection: Select the TRN for which you are applying for the TRC. If there is no TRN, choose “No TRN” to autofill the details based on your selection.
5. Complete Application: Fill out the application, pay the submission fees, and submit your application.
6. Approval and Fees: After obtaining approval from the Federal Tax Authority (FTA), pay the certificate processing fees.
7. Special Tax Forms: If there is a special tax form that requires FTA’s attestation (for treaty purposes only), it can be attached electronically alongside the application. Alternatively, it can be sent by mail or courier with return service, with the applicant bearing the fees for sending and returning the documents.

Cost and Processing Time

The cost of obtaining a TRC is specified on the EmaraTax portal, and the processing time is typically five business days from the date the completed application is received.

Validity

The TRC is valid for one year from the beginning of the financial year selected by the applicant.

By following these steps and meeting the necessary criteria, individuals can obtain a TRC and benefit from the DTAA, ensuring they are taxed appropriately and avoiding double taxation.

For further information or to start your application, visit the EmaraTax portal.

Disclaimer: The information provided here is for educational and informational purposes only and should not be construed as financial, legal, or tax advice. Consult with a qualified professional before making any investment decisions. We do not accept any liability for errors or omissions in this information nor any direct, indirect, or consequential losses arising from its use.