A tax residency certificate issued for domestic tax purposes in the UAE plays an important role in verifying an individual's tax status and obligations within the country. The Federal Tax Authority (FTA) oversees the issuance of these certificates to natural persons to determine tax residency for local tax regulations and benefits.
The tax residency verification for local tax obligations certifies individuals' statuses which are determined by the number of days they spend in the UAE during a particular financial cycle. It lets individuals to use domestic tax exemptions and allowances they are entitled to as UAE tax residents. Local authorities also accept these certificates as proof of tax residency for verification of tax obligations for residents.
Tax residency status certification for local taxation
Any natural person can apply for a Tax Residency Certificate Domestic UAE from the FTA provided they meet one of the following criteria for days spent in the UAE during the requested financial year:
| Days Spent in UAE | Residency Status | Eligible to Apply? |
|---|---|---|
| 183 days or more | Considered a tax resident | Yes |
| Less than 183 days but 90 days or more | May still qualify subject to other criteria | Yes |
| Less than 90 days | Considered non-resident but can qualify based on financial and personal interests tied to the UAE | Yes |
The financial year that the applicant is requesting should be over and he or she should have relevant documents to show their residence and citizenship status in the UAE according to the FTA criteria.
Applying for tax residency certificates for domestic tax purposes
The acquisition of the UAE tax residency certificate for domestic taxation in the United Arab Emirates should fall in line with the steps mentioned:
- Login on to the EMARATAX portal online, which is the main system utilized by the FTA for all the services.
- create a new user account on emaratax or login with the credentials if the user already exists. Besides, applicants who have been applying through the previous TRC channel can link their old accounts to the portal.
- After logging in, select "Other Services" from the main menu.
- Select "Tax Residency Certificate" as the type certificate for your application process and then, if you own TRN, choose your existing one, and in case you do not own a TRN, select "I don't have TRN".
- Select the certificate type "Domestic purposes".
- Fill in the online application form in three steps giving your basic details, information asked for, and delivery address.
- Pay the submission fees using one of the preferred online payment options.
- Undergo the FTA’s review of these documents, which would normally require a maximum of 5 business days to be complete.
- In case the certificate is approved, the certificate processing fees need to be paid by the applicant.
- The holder of the online designated certificate can either download them digitally or receive a physical hard copy via courier by paying extra fees.
With the online filing EMARATAX, applicants can quickly and easily start, follow, and fulfill their tax residency certificate application from start to finish digitally on the Internet.
Required Documents for Tax Residency Verification for Local Tax Obligations
The type of documents required to apply for a tax residency certificate for domestic purposes in the UAE depends on the period of stay in the country as follows:
For Natural Persons
Spent 183 days or more in the UAE:
- Passport
- Emirates ID (if available)
- Entry and exit report
Spent less than 183 days but more than 90 days:
- Passport
- Emirates ID (if available)
- Entry and exit report
- Source of income/salary certificate
- OR Proof of permanent residence like title deed, Ejaris, utility bills, rental contract
Spent less than 90 days or have other situations:
- Passport
- Emirates ID (if available)
- Entry and exit report
- Proof of financial and personal interests in the UAE
- OR Proof of permanent residence like title deed, Ejaris, utility bills, rental contract
Applicants are expected to submit all compliant documents in respect of their stay duration to obtain a tax residency certificate for domestic purposes in the UAE.
Conclusion
In summing up, the acceptance of the valid Tax Residency Certificate Domestic UAE by the FTA is a verification of the status of the individual's residency within UAE. It aids residents and authorities in correctly declaring their domestic tax obligations in the UAE, and further allows domestic tax benefits for UAE tax residents by offering them subsidies and exemptions available to only the tax residents of the UAE. Filing a tax return can be an overwhelming task, which is why the help of Corporate tax UAE, can be a great start before an applicant proceeds with the requirements and process of obtaining a certificate of tax residency for domestic purposes in the UAE.
For a comprehensive guide on changing your tax residency, check out our detailed article on How to Change Your Tax Residency to Dubai.
FAQs
Q1. What is a tax residency certificate for domestic purposes, and how is it used in the UAE?
The UAE tax residency certificate for domestic purposes is proof of an individual's tax residency status in the UAE, which is utilized solely for local taxation. It serves to assess the duty of tax filing of citizens and eligibility for tax exemptions.
Q2. Who is eligible to apply for a tax residency certificate for domestic taxation in the UAE?
Individuals who meet any of the following criteria are eligible to apply for a tax residency certificate for domestic taxation in the UAE:
- Individuals who have lived in the UAE for more than 183 days.
- Individuals who have lived in the UAE for less than 183 days but more than 90 days, and they can provide proof of income from a business in the UAE or proof of permanent residence like a title deed, utility bills or long-term rental contract.
- Individuals who have lived in the UAE for less than 90 days but can provide proof of financial and personal interests in the UAE like place of work, family connections, property owned etc.
- Companies registered and operating in the UAE for over one year.
- Government entities based in the UAE.
Q3. What documents are required for obtaining a tax residency certificate for domestic tax purposes?
Documents like passport, Emirates ID, entry/exit dates and proof of residence like utility bills or rental contract.
Q4. How does holding a tax residency certificate impact an individual's tax obligations and benefits within the UAE?
It establishes their tax residency in the UAE, enabling access to exemptions and clarifying tax filing obligations.
Q5. Are tax residency certificates issued by the UAE recognized for domestic tax purposes by local authorities?
Yes, certificates issued by the FTA are accepted as proof of tax residency by local authorities.
Q6. What is the process for renewing or updating a tax residency certificate for domestic taxation in the UAE?
Certificates are renewed every year by filling out an online form having an option to submit additional files if necessary.
Mostafa is a seasoned Tax Consultant with over 5 years years of experience gained in diverse taxations matters. He has vast expertise in settling tax disputes with the Federal Tax Authority and handling of tax procedures in compliance with tax laws. He is adept in investigating underlying tax intricacies and offering expert tax advisory. He is also well-versed in conducting tax analysis’s and negotiations with the Tax Regulators, upon tax preparation and filing. Mostafa specializes in the areas of Tax law, Auditing, Accounting and Banking law.
