1. Intuit Management Consultancy
www.intuitconsultancy.com
TAX RESIDENCY CERTIFICATE – NEW REQUIREMENT TO TAKE TAX TREATY BENEFIT
INTRODUCTION
In today’s dynamic world of globalization, business is not restricted to a single geographical territory and
is spread worldwide. Each country has right to tax the profits earned in its land and also to tax the global
income of its residents. This leads to taxation of the same income more than once in different countries.
To avoid double taxation of same income, countries are entering into Double Tax Avoidance Agreement
(DTAA) with each other. This is generally a bi-lateral agreement, which is entered between two countries.
The meaning of Tax Treaty (DTAA) is that it is formally concluded and ratified agreement between
independent nations (bilateral treaty) for matters concerning taxation in written form.
If two countries have signed a tax treaty, it becomes mandatory by tax authorities to produce a Tax
Residency Certificate to claim the treaty benefit. It is noticed that in many instances the taxpayers who
are not tax residents of a contracting country claim benefit under the DTAA entered into by the
Government with that country. Thereby, even third party residents claim unintended treaty benefits.
TAX RESIDENCE CERTIFICATE IN DUBAI
The Tax Residence Certificate (TRC) is issued to a resident company operating in the country. A
company operating in the Mainland Dubai and a Free Zone Company can apply for a Tax Residency
Certificate. A Offshore Company is not entitled to the tax treaty benefit.
TAX RESIDENCE CERTIFICATE - CORPORATES
A company is resident in Dubai if it meets any one of the following criteria:
Criteria Description
It is incorporated in
Dubai
A company incorporated under the Dubai Economic Department and has a
trade license to do business locally.
Control by company
directors is exercised in
Dubai
Those acting in their capacity as directors control the company here, whether
decision-making is confined to Dubai or not.
It has its centre of
management in Dubai
This is the place from where the company as a whole is managed on a day-to-
day basis.
It has its head office in
Dubai
The head office of a company is the office from which the business of the
company is directed and carried out. The focus of the test is the physical place
of administration and management, which is superior to all others.
Rules around permanent establishment
The double tax agreement (DTA) between most countries and Dubai advises that a company with a
permanent establishment in Dubai will have income tax requirements here.

2. Intuit Management Consultancy
www.intuitconsultancy.com
Criteria Description
A permanent establishment for a
business is a fixed place where the
business activity is wholly or partly
carried on.
This includes:
 a place of management
 a branch
 an office
 a factory
 a workshop
 a mine, an oil or gas well, a quarry or any other place
of extraction of natural resources
 an agricultural, pastoral or forestry property; and
 a building or construction site, installation or assembly
project
The company does not have a
permanent establishment if it only uses
facilities in Dubai for certain activities.
These are:
 storage, display or delivery of goods or merchandise
 maintenance of goods or merchandise that are used
for the storage, display or delivery of the company's
merchandise
 maintenance of goods or merchandise that belongs to
the company but are used for processing by another
entity
 maintenance of a fixed place of business that is only
used for purchasing goods or merchandise or
collecting information for the company
 maintenance of a fixed place of business that is used
for any other activity of an introductory or supporting
nature, such as advertising or scientific research.
Dubai - Double Taxation Avoidance Agreements
United Arab Emirates had signed DTAA with Algeria, Armenia, Austria, Azerbaijan, Bangladesh, Belarus,
Belgium, Bosnia & Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Colombia, Czech Republic,
Egypt, Fiji, Finland, France, Germany, Greece, Hong Kong, India, Indonesia, Italy, Japan, Jordan, Kenya,
Latvia, Lebanon, Libya, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Mongolia, Montenegro,
Morocco, Mozambique, Netherlands, New Zealand, Pakistan, Philippines, Poland, Romania, Russia,
Seychelles, Singapore, South Korea, Spain, Sri Lanka, Sudan, Switzerland, Syria, Tajikistan, Thailand,
Tunisia, Turkey, Ukraine, Uzbekistan, Venezuela, Vietnam, Yemen.
Conditions of Dubai Tax Residence for Corporates:
1. The Tax Residence Certificates (TRC) is issued by Dubai in respect of those countries only with
which it has subsisting Double Taxation Avoidance Agreement.
2. An Application as per prescribed format has to be made to Ministry of Finance

3. Intuit Management Consultancy
www.intuitconsultancy.com
3. A Letter addressed to the Ministry of Finance requesting certificate and stating the country name
for which it is required.
4. Proof of paid up share capital needs to be attached. Copy of Share certificates is accepted for
fulfillment of this requirement.
5. Copy of Valid Trade License issued to Company.
6. The TRC is valid for a period of 1 year from the date of issue stated in the TRC.
TAX RESIDENCE CERTIFICATE - INDIVIDUALS
The proper certificate of residency issued for the natural person is a document in which the foreign tax
administration authority confirms the tax residency of a given natural person, which is the possession of
the residential place for the taxation purpose on the territory of a given country. It is equivalent to the
treatment of such a person in this country as a person subject to the absolute tax obligation.
This document is issued in order to avoid double taxation in the light of the bilateral agreements.
Non-Residents are required to obtain a Tax Residence Certificate duly verified by the government of the
country of which the Non Residence’s claim to be residents for the purposes of a tax treaty.
It has been mandatory for all foreigners to furnish a Tax Residence Certificate of their home country to
claim benefits under the Double Taxation Avoidance Agreement.
Conditions of Dubai Tax Residence for Individuals:
1. Instead of Trade License, copy of valid passport and visa is required.
2. The TRC is valid for a period of 1 year from the date of issue stated in the TRC.
CASE STUDY
A Poland based company had its operating subsidiary company doing business in Dubai. They had
contacted Intuit to assist them in obtaining the Tax Residency Certificate for its subsidiary company in
Dubai.
Engagement Planning:
We studied the client’s requirement and provided a suitable proposal to obtain the Tax Residency
Certificate from the Ministry of Finance. The client required this certificate to avail the tax treaty benefit
between Poland and Dubai. Intuit took necessary step to ensure the client was compliant with the
prescribed conditions by the Ministry of Finance and then the final application was submitted to obtain the
Tax Residency Certificate.
Obtaining TRC:
Once all the recommendations were adopted, we filled the application form and submitted to Ministry of
Finance, Dubai, along with the letter requesting the certificate of Tax Residency stating the country name
for which the same was required. Along with the form a copy of share certificate, copy of trade license,
and the prescribed fees was paid. Then the Tax Residence Certificate was issued for the period of 1 year.