Page 9 - ICAI UAE TAX UPDATE_October 2024

For natural persons, the Tax Period is the Gregorian
Where the tie-breaker rules do not resolve the dual calendar year.
residency status of the natural person, the competent
authorities under the relevant DTA may consult with Newly incorporated companies who have yet to file a
each other and agree the natural person’s tax residency Corporate Tax Return must be established for 12 months
status before being eligible to apply for a Tax Residency
Certificate.
Permanent home test - The natural person needs
to regularly occupy the home, with some degree of A juridical person or natural person can apply for a Tax
permanency and stability, based on a right of occupation. Residency Certificate via the FTA’s online EmaraTax
This test applies to the period of time in which the natural portal, using their EmaraTax account.
person’s residency position affects their tax liability. The
accommodation should be continuously available at all If the FTA is satisfied that the applicant meets the
times to pass the permanent home test conditions to be considered a Tax Resident in the UAE
in accordance with the provisions of the relevant
Centre of vital interests test - The country with which a DTA, the FTA will approve the application and issue a
natural person’s personal and economic relations are Tax Residency Certificate stating the applicable DTA.
the closest. Both the number as well as the depth and The Tax Residency Certificate is only applicable to the
importance of the natural person’s connections should period selected by the applicant. However, the FTA has
be considered in determining where the centre of vital the authority to withdraw a Tax Residency Certificate if
interests is located. they become aware of incorrect information or a change
in facts that prevent the applicant from being a Tax
Habitual abode - If the counting of days in a particular Resident.
period does not determine where the natural person is
resident, then a longer period of time may be considered The FTA can request supporting evidence and any
in order to determine where the natural person habitually documentation which it deems necessary for deciding
spends their time. whether to issue a Tax Residency Certificate.

Nationality - The natural person should be considered International form stamping
resident in the country of which they are a national.
Where they are a national of both countries or neither of Some jurisdictions require Persons applying to avail
them, the cross-border tax dispute shall be decided by benefits under a DTA to provide an authorised or signed
the two contracting states through a MAP. document to show that they are a Tax Resident of a
particular jurisdiction. The FTA can, upon request, stamp
Where the natural person is considered resident in a forms provided by other jurisdictions.
foreign country covered by a DTA between the UAE and
that foreign country, the provisions of the applicable DTA Some jurisdictions provide their own Tax Residency
has an impact on his or her tax residency status. Any Certificate forms which they require to be stamped by
income that falls under the “Business Profits” article of the tax authority in the country where a Person claims
the relevant DTA would generally remain taxable in the to be a tax resident.
UAE if the non-resident natural person has a Permanent
Establishment in the UAE. In order to have their form signed and stamped, the
applicant must send the form by courier service to the
Obtaining a Tax Residency Certificate FTA. If the applicant does not purchase a return courier
service, the applicant will be required to collect the
A Tax Residency Certificate can be obtained for DTA documents and form physically from the relevant FTA
purposes and for purposes other than the application office. Applicants also have the option to submit any
of a DTA. specific forms online as a scanned copy to be signed
with an FTA ink signature, provided it is recognised and
Applicants must include which Tax Period or other accepted by the other country.
12-month period to be covered by the Tax Residency
Certificate, depending on the specific situation. If a Tax FTA takes, in general, 10 business days to respond
Period is selected, it can only be the current Tax Period from the date the completed form is received and the
or a prior Tax Period. processing fee of the relevant Tax Residency Certificate
has been paid.
For juridical persons, the Tax Period is the Financial Year.
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UAE TAX UPDATE NEWSLETTER ISSUE 07 - October 2024 ISSUE 07 - October 2024 UAE TAX UPDATE NEWSLETTER