What Are The Advantages Of VAT Registration In Dubai?

The United Arab Emirates has become one of the first countries to apply an indirect tax on all taxable products and services. We’ll take a deep look at the benefits of VAT registration in  UAE in the region in this piece.

The Benefits of VAT in the UAE

The UAE government established VAT registration in UAE  because it provides the following benefits:

  • VAT boosts personal savings and investment – one of the main arguments for adopting VAT is that it stimulates personal savings and investment.
  • The indirect tax is transparent and imposes a minimal burden on consumers because they collet it in pieces at many points in the distribution, supply, and manufacture of products and services.
  • Facilitates business transactions – in the UAE, organizations, and suppliers prefer to conduct business with SMEs and non-VAT-registered businesses. If your company fails to submit valid VAT invoices, established businesses may be unwilling or hesitant to do business with you. Firms registered for VAT, both voluntary and required, get a tax registration number (TRN) to make dealings with other businesses easier.

How Can You Apply For VAT Registration In The United Arab Emirates?

The Federal Tax Authority in the United Arab Emirates requires enterprises with annual revenue of DH375,000 to apply for VAT registration. The tax authorities have permitted qualified tax agents to assist firms with the registration procedure to make it easier for them.

The FTA announces the registration dates, and you must complete the procedure before the deadlines. The firm will face severe fines and penalties if it fails to apply. While it is critical for companies to understand all of their requirements linked to FTA registration, it is also critical for them to understand how VAT applies to their enterprises and activities. During the registration procedure, the Federal Tax Authority has the authority to require further information from enterprises.

What Happens If Your Company Doesn’t File Its VAT Returns On Time?

A firm will be placed on probation for a year if it fails to file VAT returns on time or make payments to the Federal Tax Authority. Authorities will impose penalties if a company submits late returns or makes repeated late payments.

If your firm surpasses the obligatory VAT registration level, you must immediately notify the tax office. Failure to do so within thirty days after crossing the threshold raises the company’s chances of being fined for failure to register. It is essential to seek the assistance of vat registration professionals to expedite the VAT registration procedure and ensure that the firm is not penalized. Do you have a trusted regulated tax expert in the UAE who can assist you with VAT-related processes? We recommend that you contact us at Earningo UAE right away. Having us as your tax counselor will provide you with the following benefits:

  • You save money and time for your company; you don’t have to pull out records or file VAT returns since our team can handle it.
  • Our professionals can assist you when your company is subjected to an audit.

Get in touch with our team at Earningo for VAT registration in UAE today!

Benefits of Working and Living in Dubai and UAE

Apart from the scrumptious food, scenic beauty, and rich cultural heritage, what makes Dubai and the UAE the most sort locations for immigrants from across the globe? It’s the flexible, convenient, and growth-oriented work-life that adds further charm for the expatriates. The cities are constantly enveloping changes to facilitate its global workforce and invite fresh talent from around the world.

Ask any tax agent Dubai and the most promising factor that allures job seekers to opt for the city is their tax exemption policy on personal income. Following is a list of some other latest improvements in favor of working executives that deserve all the eyeballs.

1. The Latest PwC Consultancy Report – Higher Take-home Salaries for Executives

One of the recent pieces of information published by the Dubai Media Office, reports some crucial statistics cited by the PwC Consultancy (Price Waterhouse Coopers). As per a survey conducted across highly-paid resident executives from different countries, Dubai stands top in offering 100% take-home salaries followed by Honk Kong and Singapore. The city tops in providing commendable incentives and other benefits for its massive workforce, which serves as a major attraction for prospective candidates.

2. Strong Economy – Rebounded Rapidly

At the onset of the pandemic, Dubai’s economy was feared to fall steeply. Estimations specified that the recruiting industry in the city would experience a major downfall due to the declining opportunities in the banking sector, dip in oil prices, and changes in the working of tax consultants Dubai. However, the worst scenarios haven’t popped up and the economy seems to have been regaining normalcy at a rapid pace. The IMF (International Monetary Funds) reports a 3% plus growth which is a plus point.

3. No Tax on Personal Income

Dubai expats are exempted from paying taxes on their personal income for the past 18 months. The same rule applies for VAT as well. Despite the ongoing transformations in the taxing sector, which are better served and understood by the tax agents Dubai, the city stands firm in the tax-free offerings for talented job-holders.

Moreover, experts believe in possible changes along the long-term incentives in varied industries, similar to that of the Western World. And, these perks are expected to improvise the take-home salaries even further.

4. Emerging Jobs in Varied Industries

Unlike the expected drop in vacancies and job postings, it was quite surprising to see new opportunities pop up during the pandemic. Promising improvement was observed in banking, energy, and non-oil industries. For instance, the banking sector transitioned physical postings to online offerings to meet the growing online banking requirements. Moreover, the energy industry shifted its focus towards renewable or green energy which also brought about immense opportunities at varied job levels.

Businesses, excluding the oil industry reported gradual increase in sales after the pandemic hit terribly. Exports still need to recover, but local sales have seen a boost which produces new work offers for many.

It is Worth Working in the Middle East!

Dubai and the UAE are prepping tremendously to not lose global talent to competitors. Constant advancements in favor of the working executives are being implemented to keep attracting worldwide job-holders. The welcoming policies and convenient work-life balance make it worth the effort to spend your working years in the Middle East.

Advantages and Challenges of Setting Up Mainland and Freezone Company in the UAE

The UAE brings in a lot of benefits for investors of all scales and mediums. The city is bound to create a growth-oriented business culture to foster organizations in all sectors. From having the best tax consultants Dubai, who guide through the city’s taxation rules to maintaining strong frameworks for proper business functioning, the UAE makes an ideal space for companies to exist and prosper.

If you are along the lines to invest in setting up an organization in the UAE, it is obvious to feel dubious and challenged. Nevertheless, the Emirate is a great place to start with. However, the primary concern here could be deciding between a Mainland or Freezone company. The decision depends on a plethora of factors that surround the company type, its client base (whether in UAE or abroad), the ins and outs of business activities (within the city or outside), etc.

Following are a couple of challenges and advantages of Mainland and Freezone Companies to ease the choice for you.

Pros and Cons of a Mainland Company

Signing up as a Mainland Company implies that you can have an onshore organizational set up in the mainland UAE. Foreigners, in this case, can penetrate the market by opting for LLCs or establishing a branch office of a foreign store. This approach of investing in a company can have potential advantages and quite a lot of difficulties too. So, here’s the gist of it:

  1. Restriction-free trade opportunities both within and outside the UAE as long as the setup is onshore and established in the Emirate where the company was licensed.
  2. Financial auditing is obligatory for Mainland Companies. A well-versed tax agent Dubai can solve the complications here.
  3. Minimum office space of around 140 sq. ft. is mandatory to establish a Mainland company. The area further depends on the number of visa holders in the organization.
  4. Workers are eligible for visas without restrictions but the number of people your company holds depends on the office space you acquire.
  5. With effect from July 2021, foreign owners of a Mainland company are allowed to take 100% ownership. Before this, foreigners would have to have a 51% partnership with local sponsors to register in the mainland.
  6. Around 1000 foreign business listings are now offered 100% ownership but there are still some limitations for certain organization types.

Pros and Cons of Freezone Company

The very first Freezone in the UAE started in the 1980s. As much as the name implies, these areas allow complete ownership for foreign companies and operate under separate jurisdictions within the specific Emirates. At present, there are 45 Freezones in the UAE namely, Dubai Multi Commodities Centre, Dubai Healthcare City, Dubai Internet City, JAFZA, DIFC, ADGM, etc.

  1. As a foreign company, you have 100% ownership and do not have to involve any local sponsor.
  2. These companies can trade only within other Freezones of the same jurisdiction or outside the local UAE market.
  3. Since such setups are governed by special regulatory bodies called the ‘Freezone Authority’, they are exempted from all forms of taxes for 50 years.
  4. Financial auditing is not mandatory in all cases but top tax consultants Dubai highly recommend getting it done.
  5. Freezones do not have any limitations in terms of office space but impose restrictions on the number of visas. Usually, virtually incorporated offices are allowed one to six visas. For physical stores, it depends on the office space taken.


It all boils down to the requirements of your company’s establishment. If penetrating the local markets is the goal, then Mainland organizations are compatible. Whereas, if quick setup, freedom to complete ownership, and tax exemption are the target, then Freezones are ideal. Do a reality check, assess your goals, and move accordingly.


Ways to Amend your VAT Registration in UAE

The newly introduced VAT system in Dubai, UAE, makes it essential for qualified and experienced tax professionals and consultants to support your business. We, at Earningo’s VAT Registration Dubai, UAE are here to lend you a helping hand, with our team of highly experienced and FTA verified consultants for taxes and audits who can work with you as your tax advisers.

Who requires VAT Registration Dubai, UAE?

Every business based in any Emirate in the UAE and whose taxable imports plus supplies are more than or are expected to exceed AED 375,000 in a financial year must mandatorily register for VAT. An optional provision is given for businesses whose supplies and imports exceed AED 187,500 per annum for VAT registration Dubai, UAE.

Why do you need us?

Serious penalties are imposed on those who do not comply with VAT regulations. The penalties are as follows:

  • AED 20,000/- Failure to submit VAT Registration within the given time frame.
  • AED 1,000/- Failure of VAT Return Filing for the first time.
  • AED 2,000/- Failure of VAT Return Filing within the subsequent 24 months.
  • AED 15,000/- Failure to display prices without including tax.
  • AED 10,000/- Failure to maintain records for the first time.
  • AED 50,000/- Failure to maintain records subsequently.

Hence, by trusting Earningo’s VAT registration consultancy services, you can be free of such worries about the penalties imposed for not following up with tax payments.  So, complete your VAT registration Dubai, UAE with our help. Our step-by-step guides, expert advice, and follow-up services will help you ease your VAT journey!

Why Choose Us?

Our team of skilled, FTA (Federal Tax Authority)-certified experts has years of experience and is well-versed in the tax and audit laws of the UAE.  We believe in the “client-first” mindset and hence, give the utmost priority to them. Your data is in safe hands with us!

Our VAT Registration Services

As or client, you’ll benefit from the following three VAT-related services provided by us:

1.   VAT Advisory

Here, we aim to perform a detailed analysis of how VAT impacts and will impact your business. We will also provide information about FTA guidelines and updates through our VAT-based workshops and training sessions.

We will also assist you in identifying, managing, and drafting VAT action. In addition, our VAT advisory services cover invoicing under VAT guidelines along with IT mitigation.

2.   VAT Compliance

We help you to easily complete your VAT returns and successfully review your account. We also help in negotiating with tax authorities for VAT-related audits and queries, while adhering to all the rules and regulations of VAT registration Dubai, UAE.

3.  Tax Agent

We are regarded as one of the leading tax agencies in UAE and have represented nearly 200 clients for VAT handling and accounting services. We also have a 100% VAT Refund success ratio.

Our thirty-year experience in the field has helped in tackling situations and providing the best solutions to our clients, therefore ensuring a smooth VAT registration process.

Being a trusted tax agency we uphold our responsibility of being aware of every VAT-related update in the UAE, to represent your business on a positive note before the FTA.

We keep you informed about the latest VAT-related procedures, declarations, assessment proceedings, penalties, appeals, and auditing. All in all, Earningo is your one-stop solution to fulfill all your VAT responsibilities in an efficient, compliant, systematic, and timely manner.

Contact Us Today!

So if you are looking for a consultancy to complete your VAT Registration, Dubai, UAE, call us now to enquire about our reasonable charges and exemplary services!

How to Secure Tourist VAT Refunds on your Purchases in UAE?

The UAE is a shopper’s paradise with its luxury outlets, glitzy malls, and gold souqs and luxury outlets. It offers the best brands from around the world, and tourists can take advantage of the shopping opportunities when they visit the country.

The UAE government’s decision to refund Value Added Tax (VAT) paid by tourists on their purchases is excellent news for the travel, tourism, and retail sectors. Keeping with the global practice of exempting tourist purchases from VAT, the Federal Tax Authority (FTA) implemented the VAT refund scheme for tourists starting November 18, 2018, after introducing VAT on January 1, 2018, in the UAE.

Steps to get a VAT refund for tourists in the UAE

The Federal Tax Authority (FTA) has announced that eligible tourists can request refunds of VAT incurred on their purchases in the UAE. Anybody who is not a resident of the UAE, including the GCC nationals, is eligible for Tax-Free shopping under the current rules.

Here are a few primary conditions and steps to get your VAT refund:

  • The goods purchased by tourists need to be supplied within the UAE border.
  • The tourist must leave the country within 90 days from the date of supply, along with the purchased supplies.
  • The goods must be exported out of the UAE by the tourist within three months from the date of supply.
  • The claim for a refund must be made within 90 days of purchase.
  • The tourist must have purchased the goods from a registered retailer in the system.
  • The minimum spending for VAT refund by the tourist is 250 Dirhams.
  • The maximum limit for a cash refund is 7,000 Dirhams.
  • The tourists will receive 85% of the total VAT amount paid in the refund, minus an administration fee of 4.8 Dirhams per tax-free form.


Any retailer who follows the authority’s specific criteria can participate in the scheme. The FTA has issued decision No. (1) specifying the requirements for retailers for participating in the Tourist VAT Refund Scheme.

How can you claim a VAT refund on your purchases as a tourist?

Follow the below steps to claim a VAT refund on your purchases as a tourist:

  • Determine the conditions to fulfill: As a tourist, you must follow the primary requirements and steps given above in the article to get your VAT refund.
  • Check the designated places for VAT refund: A tourist can avail the VAT refund on the tax paid for their shopping from various outlets and point of sales registered under the Tax Refund Scheme for tourists through an electronic system. It determines the taxes eligible for a refund and shall be paid accordingly.
  • Don’t forget to get the tax-free tag: Once you have finished shopping as a tourist, a tax-free tag will be attached to your payment receipt. The tax-free tag is crucial as it allows the tourist to avail the refund scheme with a minimum purchase of AED 250. Remember, the tax-free tag is only valid for 90-days from the date of purchase.
  • Validate your eligibility for VAT refund as a tourist: It is a mandatory process to avail the tourist refund scheme. The tourist has to provide the passport and boarding pass, and additional checks, if necessary, will be carried out to ensure your purchase.
  • Pick a method of refund: There are two types of refunds in which you can avail tourist refund scheme, i.e., by cash or credit.

Vat Refund for tourists in UAE

The new amendment for VAT refund for tourists is fully electronic with minimal human intervention. It has led to an excellent customer experience for retailers and the FTA. The VAT refund scheme has various conditions and procedures for the retailers, the scheme operators, and the tourists. The refund scheme is an attractive scheme for tourists visiting UAE. It has been implemented to incentivize tourists to shop in UAE. It is outlined that tourists will be able to collect a refund of VAT at the time of departure from the airport.

As a tourist, it would be beneficial to have proper knowledge regarding the VAT refund scheme before visiting UAE. Contact the experts for the latest clarifications and judgments regarding the scheme.

Know the Myth And Realities Behind Obtaining A UAE Tax Residence Certificate

Many confusions have transpired around the views and the norms of application for the UAE Tax Residency Certificate. Numerous misinterpretations surround the rules of application for the certificate. Here is a clear picture of applying for the UAE Tax Residence Certificate.

What is a Tax Residence Certificate?

The Tax Residence Certificate (TRC) is a technical document issued by the UAE Ministry of Finance for verifying the applicant’s formal status as a resident of the UAE concerning the Double Taxation Avoidance Agreements (DTAA) between the UAE and specific foreign jurisdiction. Once the DTAA is signed between the two countries, it mandates tax authority to produce a Tax Residence Certificate.

What is a Tax Residence Certificate used for?

A Tax Residence Certificate is an essential and core document that helps the applicant seek the benefits of DTAA.

Can an Individual obtain a TRC, and what requirements are to be fulfilled?

Yes, the individuals can apply for the UAE Tax Residence Certificate but, they are subject to meet the prerequisite conditions applicable.

Here are the conditions to be met by the individuals to obtain the certificate. They have to submit the copies of:

  • Passport and valid permit of residence
  • Emirates ID card
  • Residential lease agreement
  • Validated six months bank statement from a local bank
  • A valid proof of income in UAE, i.e., Salary certificate
  • An immigration report from the GDRFA – exit and entry report stating that he/she stayed in the country for more than 180 days
  • Tax forms from the country where the certificate needs to be submitted

Can a company apply for a TRC, and what requirements are to be fulfilled by the corporate entity?

Of course, yes, a corporate entity or company can apply for the UAE Tax Residence Certificate by fulfilling certain conditions. The companies have to submit the copies of:

  • Trade licence and partners’ attachment
  • Establishment contract certified by the official authorities
  • Company owners/ partners/ directors’ passports, IDs and permits of residence
  • Certified audited financial accounts of the previous year
  • Validated six months bank statement from a local bank
  • Certified lease agreement or MOA of the company
  • The organizational structure of the company

Is a UAE offshore company entitled to obtain a Tax Residence Certificate?

No. The Ministry of Finance does not issue Tax Residence Certificates for offshore companies as the latter are considered non-resident corporate entities for tax purposes.

How much time will it take to process the application?

The process of obtaining the Tax Residence Certificate in the case of an individual will take about 3-10 days and for corporate entity or companies, it will take not less than 12 working days depending on the approval from the authority.

What is the procedure to apply online for the UAE Tax Residency Certificate?

The applicant should create an online account on the Ministry of Finance (MoF) portal. A tax residence certificate application form is filled out and uploaded alongside the supporting documents for review and approval by the MoF. Once the MoF issues the license, fees are paid electronically, and the certificate is generated and available for collection in person at the Ministry or couriered to a domestic address. The whole process takes about 3-10 days for an individual and not less than 12 working days for companies depending on the approval from the authority.

Misconceptions surrounding the UAE Tax Residence Certificate

Myth #1: An individual must stay in UAE for 180 consecutive days to meet the Ministry of Finance requirements.

It is partially true. The MoF has fixed a prerequisite for an individual applicant to have spent at least 180 days in the UAE within the year preceding the applications for the certificate. This is an objective criterion (day-counting). It is, however, possible to apply or reapply even if this condition is not met by the applicant if they prove to have strong ties to the jurisdiction.

Myth #2: There is no need for a residential address in the UAE

A residential address in the UAE and a valid tenancy contract in the applicant’s name are mandatory conditions to apply for the UAE Tax Residence Certificate.

Myth #3: An applicant can submit international bank account statements as part of their application

The Ministry of Finance will not accept any foreign bank statements. The applicant must have a UAE personal bank account and have held such an account for a minimum of six months. They also require six-monthly statements stamped by the UAE bank. The online generated bank statements are not acceptable.

Myth #4: The Tax Residence Certificate cannot be predated

An individual or a company can acquire backdated Tax Residency Certificates. The Ministry of Finance allows applicants to backdate their Tax Residence Certificate application as long as there is documented proof that the applicant has had a UAE resident visa, six months UAE bank statements, and a residential address for that period.

Expo 2021 Dubai Attendees Should Use VAT Refund Scheme

Dubai Expo 2021 is one of the biggest events in the post-pandemic world. After being postponed from the last year, the organizers have retained the 2020 branding for marketing purposes. Hence, it is Dubai Expo 2020 and 2021 also. It has started in October 2021 and is scheduled till March 2022. It’s the first-ever Expo in the MEASA region, covering the Middle East and Africa, and people from across the globe are taking part in the event. The event covers over 1083 acres or 438 hectares between Abu Dhabi and Dubai.

In an official statement, the Federal Tax Authority (FTA) has called the attendees to benefit from the Value Added Tax (VAT) refund scheme for taxes paid on goods and services connected with Expo 2021. It has been implemented by the authority in line with UAE Cabinet Decision No.1/2020. The authority added they had issued a comprehensive guide for the official attendees at the Expo.

“The FTA has been cooperating with all relevant authorities to prepare for a smooth and efficient implementation of the procedures for the refund of Value Added Tax paid on goods and services connected with Expo 2021 Dubai,” explained H.E. Khalid Ali Al-Bustani, Director-General of the FTA. He further added, “The FTA has established a daily direct communication channel with the Expo 2021 Bureau of International Participants to enhance coordination and ensure fast processing of applications from participants in Expo 2021 Dubai, whether in regard to VAT registration requests by the participating countries, or processing of refund requests, as well as promptly responding to their enquiries.”

Categories of taxes come under the VAT refund scheme

Here’s what we have received from our tax consultant Dubai. The authority has mentioned the categories of taxes that can be refunded under the VAT refund scheme in their guide. They are:

  • The official participants on goods and services related to construction, installation, alteration, decoration, and dismantling of the exhibition space.
  • The official participants on goods and services related to organizing works and activities and the official participant’s exhibition space operation. Also, the participants are responsible for any presentations and events taking place on the site.
  • The official participants on goods and services related to the actual operations of the official participant provided the value of each product or service claimed is not less than 200 AED.
  • The official participant in connection with all operations, services, and activities provided for the participation in the Expo, whether located in or outside the boundaries of the Expo site.
  • The VAT is incurred on importing goods for the personal use of the official participant’s section commissioner-general, section staff, and the beneficiaries.

The guide also clarifies that the official participant must possess a certificate of entitlement issued by Expo 2021 Dubai, established by virtue of Dubai Decree No. 30/2014. Suppose the participant wants to qualify for VAT refunds for expenses under the first or second category. However, it is not applicable for third, fourth, or fifth category participants. They don’t need to obtain a certificate of entitlement to apply for a VAT refund.

It clarifies the procedures in refund mechanism and VAT reclaimable, and the special case for imports certificate of entitlement. It provides more details about the eligibility criteria for the certificate of entitlement, applying procedures, request form, and supporting documents. It also explains the procedures to apply for refunds, procedures for the offices of Official Participants registered and not registered for VAT, and the supporting documents for the refund request. Finally, it reveals the processing of the refund application by the organizers and the frequency of the refund application and the payment of the tax on the sale of imported goods.

The tax consultant Dubai reminds the guide is available on the FTA website – www.tax.gov.ae – which clarifies the refund mechanism, the VAT reclaimable, and all the doubts related to Expo 2021 Dubai.

Tax Refund Criteria

Cabinet Decision No. 1/2020 on the Refund of VAT paid on goods and services connected with Expo 2021 Dubai includes nine articles, presents the eligibility criteria for tax refunds where VAT incurred on the import or supply of goods or services is associated with the Expo. It also identifies all procedures related to applying for a refund, the requirements, the certificate of entitlement and clarifies the FTA’s jurisdiction in relation to the Expo.

Global Tax Deal to Hurt Indians Who Moved Trust to the UAE

It is not new that the rich Indians have created and registered their family trusts in tax-friendly nations. As per the tax agents in UAE, they transferred their assets, including shares held in India and money repatriated from India, to the countries such as UAE, Singapore, and Malta to insulate themselves from the taxman status and other government agencies. Earlier, countries such as Ireland and Switzerland were the favorite locations of rich Indians to create family trust structures. Family trusts are being created in the USA and Africa also.

According to an Economic Times report, these rich Indians feared that they might get harassed by the government agencies in case of any load default in the future. Hence, to avoid the troubles, they shift their resources and properties to family trusts and holding entities abroad. They believed that it would make it difficult for the Indian authorities to access the assets held outside of their home country. However, following the new global tax deal of the Organization for Economic Co-operation and Development (OECD) and UAE’s plans to introduce more taxes, several rich Indians are contacting their advisers, fearing additional taxes.

Many wealthy Indians, including businessmen, Bollywood celebrities, and politicians, had created or have invested in companies based in tax-friendly countries like UAE. They were handling the operations from India and availing tax benefits due to UAE’s liberal tax regime. After all the leading countries, including the UAE, signed OECD’s global tax deal, the government might introduce a corporate tax of at least 15% across the board that applies to the income of holding trusts and entities. Hence, there’s a fear of getting stuck with tax and other regulatory issues, comments a tax agency in Dubai.

The founder of tax advisory firm Transaction Square, Girish Vanvari, said, “Many Indian families had moved their holding companies and trusts to Dubai in the last two years either completely or partially. Now with the OECD global tax deal, the fear is that there could be a 15% tax in the UAE even on these entities that would eventually wipe out a large part of the tax arbitrage.”

Until recently, countries like the UAE were the preferred location to set up family trusts or holding entities as no income taxes or other direct taxes were incurred. But, OECD, in a deal with 136 countries, made sure that large multinationals pay a minimum tax of 15% on their global income from 2023, and those with profit above a threshold pay taxes in the markets where they conduct business. The tax experts say that, though the OECD deal is only applicable to 100 multinationals as of now with a particular size, it will create tax complications for the companies present in the countries like UAE.

“This is mainly because countries which have low or no corporate tax may be increasing or introducing corporate tax at 15% across the board at some point in next one or two years and that will then also impact the trusts or holding entities in these countries,” said Ajay Rotti, partner at tax advisory firm Dhruva Advisors.

People who have advised their clients on tax, VAT registration in UAE, and other regulatory issues opined that in the future, these companies would end up holding global operations, including the Indian business, by restructuring their holding entities. Apart from family trusts, operational entities might also be restructured.

The partner at UAE-based tax advisory firm WTS Dhruva Consultants, Nimish Goel, said, “With a likely introduction of corporate tax in countries like the UAE and Bahrain, large business houses are already looking at their business structures and have started assessing the impact. The tax landscape in the region is now at an interesting and evolving crossroad.”

The OECD deal targets large corporate companies such as Google, Facebook, Apple, and Amazon for creating complex structures in tax havens, including Ireland, the British Virgin Islands, Bermuda, the Cayman Islands, and Mauritius. Government authorities want these large enterprises to shell out at least 15% tax on their global profits irrespective of the complex structures.

Role of Tax Consultants and Benefits of Hiring them in Organizations

The tax consultants Dubai give advice, to prepare, and assist individuals or companies in tax filing or returns. They are tax preparers and suggest steps which would help companies save more money. As tax consultants, they are experts on matters related to tax and financial experts familiar with all the tax laws in Dubai. Since companies and individuals pay high taxes to the government, they need tax consultants to minimize their tax exposure by using effective tax management strategies.

The tax consultants Dubai is expected to fulfil certain responsibilities. It is to keep their client’s tax to the minimum, keep track of the latest schemes provided by banks, and organizations, and provide suggestions conferring to the financial ability of the clients. It’s a great responsibility to suggest and provide the necessary information to ensure their clients are following all the legalities. Additionally, they need to act transparently.

During the preparation and submission of documents to the Federal Tax Authority (FTA) in Dubai, tax consultants assist on the best practice. They possess very good knowledge regarding environmental factors such as the change in tax rules and change in government guidelines that might affect the client or the client’s business.

Let us look at the major roles of tax consultants in organizations

  • Preparing the monthly and yearly tax returns and other compliance documents
  • Recording maintenance and documentation of files
  • Following the developments of frequent updates on tax laws, regulations and practice
  • Conducting research on tax and customs related issues exclusively on behalf of organization and their clients
  • Communicating with the Federal Tax Authority and customs officials
  • Active participation in knowledge management, professional development, and firm’s administrative activities whenever required
  • Long-term tax optimization and budget planning

Benefits of hiring tax consultants Dubai

  • The tax consultants Dubai are professional consultants who give flawless expert guidance and services
  • With their exhaustive training, they communicate easily with the clients and lead the company on the correct path
  • A well-experienced tax consultant is well versed on government policies and other compliance rules that helps to deal with the tax issues
  • Knowledgeable in the optimised usage of available resources of the organization in an effective way without breaking any laws
  • The tax consultants are well updated with the changes in rules and regulations made by the FTA
  • They provide accurate and professional legal advice to their clients and their business
  • With the experts on their side, clients can be relieved from the stress about tax and tax-paying processes
  • The experts’ objective is to save the money for the client with a smooth navigation through the tax process
  • They ensure to prevent error and misconduct in transactions

The tax consultants Dubai ensures the integrity of financial and accounting information, promote accountability, and prevent fraud. They ascertain the procedures are set up properly to manage the process without errors. Since UAE follows international accounting standards, the tax consultants play a vital role in running business through proper control of finance. The SME sector in the UAE is growing rapidly and hence the knowledge, monitoring, studying the changes in the business sector, and implementing the necessary changes is of high-priority in the organization.

How to Obtain Tax Residency Certificate or Tax Domicile Certificate in the UAE

A few decades ago, UAE was completely reliant on oil revenue but, its transformation into a country that attracts investment from across the world is an inspiration and unimaginable. The Emirates of Dubai and Abu Dhabi, in particular, have become the centre of international finance, embracing the latest technology innovations. The UAE has also developed many attractive tourist attractions with renowned landmarks and high-class hotels.

Many factors contribute to the nation’s overall development. The favourable tax environment in the UAE is one of the major incentives that is attracting businesses. Many companies which base themselves in the UAE are exempt from income tax. Also, in order to avoid the imposition of taxes in two countries on the same taxpayer, they have established double taxation agreements with numerous trade partners. It encourages the free flow of trade and investment from other countries and protects the member countries from double taxation on the exchange of goods and services.

The companies or individuals are advised to apply for a Tax Domicile Certificate (TDC), also known as a Tax Residency Certificate (TRC), to get the benefits from the double taxation agreement in the UAE.

What is a Tax Residency Certificate?

A Tax Residency Certificate is an official document that used to be issued by the UAE Ministry of Finance (MoF) till 11 November 2020. But, according to the resolution taken by the cabinet on 14 November 2020, it shall be issued by the Federal Tax Authorities (FTA) on an application made by the resident (individual or incorporated entity) of UAE.

A Tax Residency Certificate in the UAE is beneficial:

  • For Double Tax Avoidance Agreements (DTAA)
  • To prove that you’re a tax resident of the UAE, and
  • It’s a means of registration with the authorities

Eligibility criteria to get a Tax Domicile Certificate

Any company operating on the mainland or in a free zone in the country for at least a year is eligible to apply for a Tax Residency Certificate. Offshore companies may apply for a tax exemption certificate as they don’t have a physical presence in the UAE and are ineligible for TRC.

The Tax Residency Certificate is also available for individuals who have resided in the UAE for at least 180 days and wish to establish tax residency in the country. It mainly benefits those individuals whose native countries do not have a double taxation agreement with the UAE. The individuals who wish to apply must have a valid resident visa for more than 180 days.

Requirements to obtain the Tax Residency Certificate

For individuals

  • Passport copy and valid resident visa copy of at least 180 days
  • Emirates ID copy
  • Attested personal UAE bank statement of 6 months
  • Proof of income in UAE – Ex., employment agreement, salary certificate
  • Report from the General Directorate of Residency and Foreign Affairs (GDRFA), showing evidence of all entries from the UAE
  • A copy of the certified tenancy contract, valid for at least 3-months before the application

For companies

  • Valid UAE Trade License – Mainland DED or Freezone – the company must have been active for at least one year
  • A copy of MOA (Memorandum of Association) for the company
  • A copy of the Certificate of Incumbency for the company – Chamber of commerce certificate
  • The Organizational chart structure of the company
  • Certified commercial tenancy contract copy – valid for at least 3-months before application, physical office space is mandatory (virtual office space will not be sufficient)
  • Passport, valid UAE resident visa copy and Emirates ID of the company directors
  • Latest certified audited financial statement or UAE company bank statements from the last 6-months, attested by the bank authority

Benefits of obtaining a Tax Residency Certificate

The Tax Residency Certificate or Tax Domicile Certificate is an undisputed document proving that you’re a resident of the TRC issuing country. Since it is issued by the Statutory Authority, i.e., Federal Tax Authority in the UAE, it’s a reliable document to substantiate your residency.

For companies, the TRC provides freedom to justify the applicability of provisions of DTAAs. The provisions of DTAA also benefits companies in restructuring their business or transactions, or they can consider tax planning. Favourable conditions of Withholding Tax and Permanent Establishment provide ample opportunity for the businesses to plan tax-efficient structures.

Since the UAE government and the Statutory Authorities is on the verge of promoting their development goals, they have concluded 115 DTAA with most of its trade partners. Hence, if the applicant is confident with his/their residency status, there are abundant opportunities to get the maximum benefit from UAE tax residency.