You could be paying tax twice without even knowing. That’s the problem many individuals and companies face when they deal with cross-border income. This isn’t just about losing money. It’s about compliance, financial credibility, and access to international markets.
There’s a way to prove your tax status, protect your earnings, and benefit from the UAE’s tax agreements. Let Tax Gian break it down for you on why a TRC (Tax Residency Certificate) is a must for your business.
What is a Tax Residency Certificate (TRC)?
A Tax Residency Certificate, also known as a Tax Domicile Certificate, is an official document issued by the UAE’s Ministry of Finance. It proves that an individual or business is a tax resident in the UAE.
The certificate is valid for one year and can be used for a specific country at a time. Both individuals and companies can apply, provided they meet the residency conditions. You can also seek assistance from tax agents in the UAE for this purpose.
Avoid Paying Tax Twice
This is the main reason most people apply for a TRC. The UAE has signed Double Taxation Avoidance Agreements (DTAs) with over 90 countries. These agreements protect you from being taxed on the same income in two countries.
With a TRC, you can submit proof to the foreign tax authorities that you already pay taxes (or are a resident) in the UAE. This helps lower or even eliminate taxes on your foreign income.
Strengthen Your Global Standing
When dealing with international banks, foreign clients, or tax authorities, credibility matters.
A TRC confirms your status as a legal tax resident. Many financial institutions ask for this document before processing certain transactions like opening a foreign bank account, making large transfers, or registering foreign investments. In short, it supports your reputation as a compliant taxpayer.
Stay Compliant with International Tax Laws
International tax regulations are becoming stricter. Tax authorities around the world want more proof before offering tax relief. A TRC is now required in many countries to apply tax treaty benefits. Without it, you may face withholding taxes, delays, or disputes. For individuals, especially non-resident Indians (NRIs), freelancers, or investors, it’s a key document to maintain transparency with tax authorities back home. Get clearer insights on this from a tax agent in the UAE.
Make Cross-Border Business Easier
Running a business with foreign clients? Exporting goods? Receiving royalty income from another country? A TRC helps reduce tax on such income streams. Some countries reduce or waive withholding taxes on income like dividends, royalties, or interest if the recipient can provide a TRC. For UAE-based companies, this can mean real savings and easier access to international deals.
Prove Residency for Legal and Financial Reasons
A TRC is also used to prove your residency for legal matters or for filing tax returns in another country. It shows that your centre of life, whether for personal or business reasons, is in the UAE.
When You Might Need a TRC
You might need a TRC in situations like:
- Filing taxes in your home country while living in the UAE.
- Receiving income from abroad.
- Claiming tax refunds or reduced rates under DTAs.
- Opening foreign bank accounts.
- Importing or exporting goods with tax exemptions.
Common Use Cases of TRC
- NRIs sending income to India may need a TRC to avoid Indian tax on UAE-earned income.
- Freelancers or remote workersbased in the UAE can show proof of tax residency to international clients.
- Businesses working with global partners often need a TRC to benefit from tax treaty provisions and to ease compliance.
For more queries on this, ask directly from the tax agents in Dubai.
Documents Required for Application
For Individuals
- Passport copy
- Emirates ID
- Residence visa
- 6-month UAE bank statement
- Certified lease agreement or proof of residence
- Salary certificate or income proof
- Immigration report (showing days stayed in UAE)
- Any tax form from the foreign country (if required)
For Companies
- Trade license
- MOA (Memorandum of Association)
- Passports and visas of shareholders or directors
- Last year’s audited financials
- 6-month bank statement
- Certified lease agreement
- Company’s organisational structure
Documentation requirements are subject to change; your tax agents in Dubai will help you determine the required documents at the time.
How can Tax Gian help?
The UAE is an attractive place for living and doing business, but the benefits come with responsibilities. Without a Tax Residency Certificate, you may face extra taxes, financial blockages, and legal issues abroad. Tax Gian can help you obtain a TRC as soon as possible so that you don’t face double taxation or other tax issues. To get started, simply contact our expert tax agents in the UAE.
