Double Taxation Avoidance Agreement (DTAA) and its Benefits to Expats Residing in UAE

Double Taxation Avoidance Agreement

A Double Taxation Avoidance Agreement (DTAA) consists into an agreement between two or more countries to avoid the same income twice. There have been established taxes for particular jurisdictions and specific type of incomes for each country. Therefore, it ensures that the taxpayers shall not pay the tax twice.

In other words, it means that if the rate has been paid into one of the countries, then it is not necessary to pay again. This agreement is applicable to the people who travel to any country that take part of it.

In this article you are going to learn more about the Double Taxation Avoidance Agreement (DTAA) and its Benefits to Expats Residing in UAE. Let´s observe:

  • Double Taxation Avoidance Agreement (DTAA) with UAE.
  • Which are the benefits that the Double Taxation Avoidance Agreement (DTAA) implicates?
  • Who can enjoy the benefits of the Double Taxation Avoidance Agreement (DTAA)?
  • Which documents do you need to get the residence certificate in UAE?
  • Do you need any additional documents for getting the benefits of the Double Taxation Avoidance Agreement (DTAA)?
  • Which countries take part of the Double Taxation Avoidance Agreement (DTAA)?
  • Tax residency certificate in UAE.
  • Foreign citizens in UAE.
  • Which are the easier ways for obtaining UAE citizenship?
  • What kind of companies you shall find there in UAE?

1. Double Taxation Avoidance Agreement (DTAA) with UAE

Every time it is more attractive for people and companies around the world to move and work to other countries. That happens, in special, if those countries whose politics include reducing tributes. Many countries can offer such benefits thanks to they have made a Double Taxation Avoidance Agreement (DTAA) with UAE.

In fact, the primordial function of the agreement is to divide the right of taxation between the contracting countries. It means it prevents or avoids differences, ensure equality and prevent evasion of taxation for particulars and companies that carry out activities in such countries.

In like manner, a person who applies for a residence certificate in any country has the obligation of paying a tax for it. For getting this certificate, the particular has to make a payment to the nation to allow its stay.

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2. Which are the benefits that the Double Taxation Avoidance Agreement (DTAA) implicates?

Which are the benefits that the Double Taxation Avoidance Agreement (DTAA) implicate

It is important to point out that there are multiple benefits for those who can get the certificate of residence in UAE and the Double Taxation Avoidance Agreement (DTAA). Let´s observe:

  • Companies can expand their spreads and increase their goals through moving and contracting more people in other countries. It promotes the exchange of capital in general.
  • People can contribute their knowledge and share them with many different public and private companies.
  • It is easier and motivator way to make people move to other countries and consequently adopt and share their cultures. Similarly, through moving to other countries, humanity can try understanding each other and be even more social, more comprehensive and better persons.
  • The quality of life in general increase because getting more money free of taxation allows people can get more services, comfort, health and financial stability.
  • With this, what is looking for is to build and bring better conditions that can help to improve the social work, the global economy, work conditions and the life quality of the people in general.

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3. Who can enjoy the benefits of the Double Taxation Avoidance Agreement (DTAA)?

Many people have the opportunity for enjoying the benefits of the Double Taxation Avoidance Agreement (DTAA), which are the following:

  • An individual investor or business owner.
  • A company that operates in the UAE mainland or in a free zone.
  • An individual employee.

For each case some conditions apply. Let´s observe:

  • Particular who have been living in the UAE for more than 180 days.
  • Companies who have been carrying out legal activities in UAE for, at least, 1 year.

However, it might not be as easy as you think for getting a residency certificate. In such meaning, it is worth to mention that there are some cases, where it is not possible to apply nor get  this kind of benefit, such as the following:

  • In a branch of a foreign company.
  • An off-shore company.
  • A non-employed individual with spouse visa.

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4. Which documents do you need to get the residence certificate in UAE?

There is a list documents that the government requires in order to approve the residence certificate and the benefits of the Double Taxation Avoidance Agreement (DTAA). For this matter, these are the following requisites:

  • Original and copy of the passport.
  • Copy of the residence permit.
  • ID card copy.
  • Certificate of salary.
  • Application
  • UAE ID card.
  • Passport-photos.
  • Copy of valid company card.
  • Valid commercial license of the company.
  • Medical check and a health certificate
  • Entry permit issued by the Ministry of Labor.

Equally, it is important to mention that other new requirements for obtaining a residence visa for Dubai are being applied from 2018. The conditions include a certificate of good conduct from the country of residence and having a valid email address in order to receive the emails about the process of the visa´s approval.

5. Do you need any additional documents for getting the benefits of the Double Taxation Avoidance Agreement (DTAA)?

Double Taxation Avoidance Agreement (DTAA)

In this case, there are some additional documents to enjoy the benefits of the Double Taxation Avoidance Agreement (DTAA). Let´s observe:

For individual residents, the required documents are the following:

  • A report of entry and exit from General Directorate of Residence and Foreigners Affairs.
  • Tax forms from the country where the certificate will be submitted.

For companies, the following documents are requested to apply:

  • Trade license and partners´ attachment.
  • Establishment contract which has to be certified by the official authorities.
  • Identification documents of the company owners, directors, partners, such as passports ID and permits of residence.
  • Financial accounts have to be certified previous audited.
  • Bank statement valid for 6 month.
  • Certified lease agreement.
  • Organizational structure of the company where indicates the role and position of the employees.

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6. Which countries take part of the Double Taxation Avoidance Agreement (DTAA)?

Regarding to this, there is a list of some countries of different continents which have taken part of the Double taxation Avoidance Agreement (DTAA) around the world:

In the American continent there are the following countries:

  • Canada
  • Mexico
  • Venezuela
  • Uruguay
  • Panama

In European continent there are these ones:

  • Iceland
  • Portugal
  • France
  • Italy
  • Spain
  • United kingdom

In the Asian continent, we find the following:

  • China
  • India
  • Japan

There are many other countries that integrate this long and interesting list. So, in total, 90 countries have signed the Double taxation Avoidance Agreement (DTAA) with EUA.

It is perfectly valid to say that all of those countries have taken the best decision and generally speaking; they have winner and friendly attitude.

7. Tax residency certificate in UAE

Tax residency certificate in UAE

A Double Taxation Avoidance Agreement (DTAA) in the UAE is possible to apply to those subjects who work in the countries that integrate the Emirates. It supposes a way to make easier the work and life conditions of workers. Then, individuals who try, for example, carrying out more than one job into two or more countries can get such benefits.

Tax Residency Certificate consists into a document issued by the UAE Ministry of Finance where it can be evidenced the applicant’s formal status as a UAE. In like manner, it can be proved that the migration status is legal and correct.

Having a license for working in UAE is fundamental for the purpose of applying for the residency. The costs for obtaining the certificate are 2.209 AED for individuals and 10.209 AED for companies, corporates or government entities.

There are many and different work opportunities for native and foreign people in UAE, for this reason is a top destination for many professionals. Every time developed countries include in their social politics more benefits for foreigners who want to work there. Hence, it contributes to the growing of the global economy.

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8. Foreign citizens in UAE

As a foreigner, in first place, you should know that the entry permit has a limited validity and the residency must be obtained before its expiration.  It is important to remark that the Tax Residency Certificate is valid for 1 year, so it has to be renovated after finished that period.

With this in mind, expats residing in UAE have to follow a similar process than the other persons who apply for the residence certificate, but certain conditions can apply.

In particular, if one employer applies for the foreign citizen’s entry visa, it implicates that company must also apply for such permission for the employee and must submit its business license.

In the case of those who sponsor their family members, for obtaining a Dubai residence visa (for example) must have a monthly income of at least 3,000 AED and  if the accommodation is provided by the employer, or 4,000 AED per month, as minimum, if the sponsor has an own property.

9. Which are the easier ways for obtaining UAE citizenship?

  • Marrying an UAE citizen is one of the simplest ways to obtain the UAE citizenship. Foreigners married to Emiratis may acquire UAE citizenship if the marriage lasts, for at least, 3 years. In that case, in the lapse of 10 years of marriage, a foreign citizen can be naturalized.
  • Another way to obtain an UAE passport is if after years of work within a Dubai company, the employer offers to the employee a work or residence permit with an indefinite time.
  • Close family members, such as spouses, children and parents can obtain a residence visa through direct
  • Residency by buying a property in UAE is another way for obtaining a residence visa. Therefore, this option is available for individuals with a high income. As a result, it is very common for foreign enterprisers to acquire residency through investing in real estate business, which suppose the growing of the economy.

10. What kind of companies you shall find there in UAE?

What kind of companies you shall find there in UAE?

Many different companies located in UAE, such as air transportation, basic industries, petroleum companies, etc. are applying the regulations and giving the benefits of the Double Taxation Avoidance Agreement (DTAA) to their employees.

As a result of the development of the countries that integrate the Emirates, many people have decide to travel, visit, work, invest and live there. All of that  promotes the multicultural exchange thus enriching the place.

Food service is much demanded and it is worth to highlight, for example, the case of the restaurants which is having an important growing in the recent times.  It is being motivated to the different population that lives there, what is causing the interest of many investors to establish their companies in UAE.

Furthermore, every time more and more nations and their companies eventually will join to this agreement because it represents a positive change to the world economy.

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Would you like to contact Connectfz.ae to help you obtain the benefits of the Double Taxation Avoidance Agreement with UAE? You can call at +971 433 166 88 or send an email to contact@connectfz.ae  , and you’ll talk to one of their representatives that will gladly answer all of your questions.

Sanjyam Dhingra

Avatar photoSanjyam DhingraShe is an esteemed Compliance Officer with extensive experience in ensuring corporate adherence to regulatory standards. Her expertise spans a wide range of compliance functions, including regulatory analysis, risk management, and the implementation of compliance programs. She excels in identifying potential compliance issues and developing strategic solutions to mitigate risks.

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