The Federal Tax Authority (FTA) has taken over the responsibility of issuing digital tax residency certificates and commercial activities certificates to the investors through its e-services portal, starting from November 14, 2020. This decision is in accordance with the Cabinet Decision No. 65 of 2020 on Fees for Services issued in October 2020. Since the decision, the FTA completed its preparations in association with the Ministry of Finance (MoF).
The MoF is the strategic partner to the FTA to ensure a smooth transfer of the responsibility of issuing digital certificates. For this transfer, a joint working group was formed with members from both the FTA and the MoF.
This decision encompasses two types of certificates applicable to both individuals and companies:
Tax Residency Certificate :
Tax residency certificate is also called the Tax Domicile Certificate, it is an official certificate issued to either individuals who are permanent residents or have UAE residency visa for at least a period of 180 days or companies in the country for at least a year. It is valid for a year. Individuals and companies can submit a request for this certificate to the FTA in order to benefit from the Double Tax Avoidance Agreements (DTAA) signed by UAE with 76 other countries to avoid double taxation of income.
Commercial Activities Certificate :
Individuals and companies may pay VAT arising out of transactions outside the UAE whether or not DTAAs are applicable; they can obtain a refund on the advance VAT paid through this FTA-issued certificate. A commercial activities certificate is also called the Certificate of Status of Business or Business Person.
Individual and corporate investors benefit a lot from these online services of FTA of tax residency and commercial activities certificates issuance. In particular, they can claim for VAT refund for which they had paid in other countries only if they are registered with the FTA. Secondly, they can benefit from DTAAs to which the UAE is a party. Since they are registered with the FTA, it becomes a simpler and faster process, hence improving efficiency.
How to obtain a Tax Residency Certificate and Commercial Activities Certificate in the UAE?
Step-by-step procedures to obtain a tax residency certificate and commercial activities certificate in UAE
- Register on the FTA portal and create a tax certificate account
- Log in to your tax certificate account
- On the user main page dashboard, FTA user can create a new tax residency certificate request or commercial activities certificate request
- The portal will ask if the user is a registered taxpayer
- If the user happens to be a registered taxpayer, then he has to input TRN Number and his Email ID. The portal will take the user to a page where he can apply for the tax residency certificate or commercial activities certificate
- If the user is not a registered taxpayer, then he can click “No”
- One can apply for a tax residency certificate as a natural or legal person
- One can apply for a commercial activities certificate as a legal person
- One needs to agree to the terms and conditions and pay the fees by using an eDirham card or non-eDirham card
- The user needs to click ‘confirm and calculate prices,’ and the portal will show the details of the purchased service
- Once the user fully pays the applicable fees, he will be able to see the download icon next to his request, where he can click and download the tax residency certificate or commercial activities certificate
- The certificate so downloaded is password-protected, and the password for which will be a combination of the applicant’s username and the last 4 digits of their mobile number
Tax Residency Certificate and Commercial Activities Certificate
– Emirates ID Copy
– Passport Copy
– Residency Copy
– Source of Income
– Official Bank Statement
– Immigration Report of Residency
– Trade License Copy
– Authorized Signatory’s Passport Copy
– Audited Financial Statement
– Official Bank Statement
– Certified Tenancy Contract
– Memorandum of Association or any relevant document
To obtain a Commercial Activities Certificate in the UAE, the applicant must be a registered taxpayer with a TRN Number. He needs to submit the following documents:
– Trade License Copy
– Singed and stamped request letter for the issuance of Commercial Activities Certificate
If you are looking for assistance in applying for the Tax residency or Commercial activities certificates, you can contact us. We are there to help you whenever and wherever you face any obstacle in obtaining these certificates. Our experienced advisors, immense knowledge of MoF and FTA processes, and our professionalism help you comply with all the regulatory and statutory requirements smoothly without any hassles. We help you with the documentation, filling up the details, and making any changes/corrections in these certificates so that you always remain compliant.
N R Doshi and Partners with headquarters in Dubai is an accounting and audit firms in UAE with multiple services to companies and individuals in several industries. We are driving growth for our clients for the last 35 years through our rich experience, industrial expertise, and specialized talent pool. Our result-oriented professionals and experts engage in providing you the best audit and assurance, company formation, VAT consulting services, advisory services, accounting and finance, and outsourcing services. Our scope of services extends to gold and jewellery, financial and banking services, retail, healthcare, energy and utilities, and real estate sectors.