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What is a Tax Residency Certificate in the UAE

What is a Tax Residency Certificate in the UAE - Makebiz

In recent years, the United Arab Emirates has become a popular destination for business and investment. One of the key documents confirming the status of a resident is the Tax Residency Certificate, TRC. In modern realities, it will play an increasingly important role in the lives of individuals who are active internationally, and can significantly affect the business operations and financial security of companies. In the context of globalization and increasing tax control by various states, the availability of TRC is becoming critically important for organizations operating in an international environment.

What is a TRC certificate?

TRC (Tax Residency Certificate) is an official document confirming the status of a UAE tax resident for an individual or company for a specific reporting period. It certifies that the main center of the applicant’s economic, personal or managerial interests is indeed located on the territory of the Emirates.

Such a certificate is especially relevant for those who receive income from different countries, conduct active financial activities abroad, or regularly move between jurisdictions. Its presence helps to apply the provisions of international agreements on the avoidance of double taxation and facilitates the conduct of cross-border banking transactions.

In modern conditions, states exchange financial data within the framework of the CRS (Common Reporting Standard), and banks and other financial organizations carefully check the source of funds and the tax status of clients. Against the background of stricter control over compliance with tax legislation, TRC allows minimizing additional requests and reducing the risk of questions from the UAE tax authorities (FTA).

TRC certificate for individuals

It becomes especially important for physical education. persons who:

1. They mostly travel around the world or live in different countries. This is an opportunity to avoid problems with tax authorities and simplify the process of confirming residency.

2. They have foreign accounts. The certificate serves as proof of UAE residency, which can help avoid additional obligations in other countries.

3. For people who work or do business in several countries, TRC minimizes tax risks and simplifies the income declaration process.

4. They use international investment instruments. Tax residency makes it possible to safely invest in foreign assets without fear of possible consequences.

5. They are serviced by banks in the UAE, Europe, Singapore or the USA. This will help reduce the risk of blocking bank accounts and simplify interaction with financial institutions.

To issue this document to a physical person. the person must confirm their actual residence in the Emirates using the following documents:

  • A lease agreement or a certificate of ownership of real estate — proof of residence in the Emirates.
  • Utility bills — regular payments for electricity, water and other services that confirm the use of housing.
  • Bank statements reflecting financial transactions and activity in the UAE.
  • Data on entries and exits from the country — marks in the passport showing the frequency and duration of stay in the Emirates.
  • An employment contract or other document confirming a legitimate source of income.

The value of the TRC certificate for business

1. It serves as confirmation that the company is indeed operating in the region. This is especially important for organizations that are subject to inspections by tax authorities in other countries. 

2. By checking counterparties, TRC allows you to confirm the status of a tax resident, which can be critical for concluding transactions and cooperation with foreign partners.

3. To open and maintain bank accounts of the fin. institutions often require a certificate. It is an important document for meeting compliance requirements and confirming the legitimacy of a business.

4. The TRC certificate allows residents to avoid double taxation, thanks to the relevant agreements.

Since the beginning of 2026, the Agreement for the avoidance of double taxation (SIDN) concluded between the UAE and the Russian Federation has been in force. The document will provide additional legal and tax guarantees for companies and individuals operating simultaneously in two jurisdictions.

It is important to keep in mind that anyone who does business or earns income in both countries will need to confirm their status as a UAE tax resident. Such confirmation will make it possible to correctly apply the provisions of the agreement, avoid double taxation and optimize the fulfillment of tax obligations.

However, to issue a document, a number of conditions must be met:

— Companies must have a physical presence in the country, confirmed by the presence of a registered office or rented workspace.

— Availability of workers or administration working in the UAE.

— Enterprises must conduct real commercial activities within the country. This may include executing contracts, making payments, and having active funds flow.

— It is also important to comply with the requirements of the Economic Substance Regulations (ESR). 

An application for a TRC certificate can be submitted to the Federal Tax Administration. 

The Tax Residency Certificate is an important tool confirming tax residency, which is becoming increasingly relevant in the context of globalization and growing demands for transparency of financial transactions. Obtaining it not only simplifies doing business, but also protects the interests of individuals, allowing them to avoid double taxation and problems with tax authorities. If you plan to operate in the UAE, you should take care of obtaining this document.

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