Tax clearance certificate in UAE

Tax clearance certificate in UAE - Makebiz

In the United Arab Emirates, where the economy is booming, tax discipline is an integral part of running a successful business. The Federal Tax Authority (FTA) actively implements a system of special rules and regulations aimed at ensuring transparency of financial transactions. In this regard, the Tax Clearance Certificate (Tax Clearance Certificate) acquires exceptional importance for legal entities and individuals.

The official document confirms that tax liabilities have been settled and can be a proof of financial purity and integrity of the taxpayer. 

A tax certificate will come in handy in some cases: 

  • Re-incorporating a business. The certificate demonstrates to a potential buyer the absence of problems with tax payment, which significantly increases the attractiveness of the deal. This allows the buyer to be sure that he will not inherit additional liabilities. 
  • Liquidation or bankruptcy. The document confirms that the company has no debts, which is important for creditors and other interested parties. The absence of debts increases the chances of obtaining more favourable terms in these processes.
  • If the company’s income has become less than the threshold for VAT, the tax certificate is a prerequisite for deregistration. It confirms that the company can be excluded from the VAT system. 
  • In the context of a merger or acquisition of companies, the availability of a Tax Clearance Certificate to all participants in the process greatly simplifies the procedure and increases its transparency. The document avoids delays and disputes related to tax liabilities.
  • Transfer of ownership. An opportunity to confirm the absence of debts when transferring ownership of real estate or other assets. 

You can obtain a certificate through the FTA’s online portal or by visiting their offices in person. It is necessary to provide the necessary documents, including company information, tax payer number and details of liabilities in this area. 

Having a debt-free certificate enhances the company’s reputation in the eyes of partners, investors and other stakeholders. The UAE has strict rules regarding tax liabilities and failure to comply with them can lead to serious consequences. Therefore, timely receipt and submission of Tax Clearance Certificate is an integral part of successful business in Dubai. It opens access to new opportunities and avoids many risks.

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