Tax domicile certificate in UAE – Useful Information

If you’re planning to do business abroad, it is vital for you to understand the difference between two issues related to taxpaying – tax domicile and tax residence. Knowing the distinctions between the two is essential as your incorrect assumptions can result mistakes in tax declarations.

Tax residency predetermines the fact which state you pay your taxes to. The criteria for obtaining tax residency are different throughout the world. Normally, you would be required to spend certain time within the country (about 180 days in various jurisdictions), purchase real estate, register a company or have the financial interest in the state.

Domicile is a slightly different concept. In fact, there are two types of domicile. Domicile of origin is acquired right after the birth on the basis of your parents' domicile. However, you can change your domicile as soon as you reach the age of 16 if you move abroad and stay there for a stated period. Therefore, the second type of domicile is related to the place of your permanent residence.

It is highly important to understand that you can have your domicile of origin in one country and tax residency in another one. Anyway, if this is your case, it is essential to make sure that you don’t pay the same tax twice. There are treaties on the avoidance of double taxation signed by many countries of the world that guarantee this. In particular, the United Arab Emirates famous all over the globe for its tax-free environment have signed numerous Double Taxation Agreements.

Tax domicile certificate UAE or tax residency certificate UAE allows you to enjoy the tax benefits of the United Arab Emirates. As the holder of a tax domicile certificate UAE, you are exempt from income and corporate tax as well as tax on dividends and interest. There are several ways of obtaining a tax domicile certificate UAE.

First of all, you can purchase real estate on the territory of the UAE. This way, after getting UAE residency visa, you will be entitled to the possibility to obtain the tax domicile certificate UAE. Secondly, you can register a company in the UAE. Another way of getting a tax domicile certificate UAE is to be employed by one of the UAE companies.

There have been some slight changes in the tax legislation of the UAE. The VAT tax was introduced by the government January 2018. However, the majority of major taxes are still not levied on residents and non-residents of the state.

Having a tax domicile certificate, UAE breaks new ground for your business and for your personal income structuring. The UAE is the perspective investment direction and a permanently developing economy. The tax domicile certificate UAE enables investors and entrepreneurs to focus on the growth of their business in the secure environment of the UAE.