As a company finalizes its operations, it should obtain a tax clearance certificate in the UAE for asset transfers and refunds. A tax clearance certificate (TCC) indicates that a tax-registered business has settled all its outstanding tax debts. During the finalization process, you must obtain this document, as its absence can result in delays, denial of your application, and fines.
In simple terms, a Tax Clearance Certificate (TCC) is a document issued by the Federal Tax Authority in the United Arab Emirates confirming that the company has no outstanding tax liabilities. It serves as proof that you are tax compliant, whether it is corporate tax, VAT, or any other taxes imposed. The document also serves as your financial clean slate, whether you’re wrapping up your business, transferring ownership, or applying for government approvals.
What is a Tax Clearance Certificate in UAE?
Business entities and individuals must fulfil their tax obligations to get their tax clearance certificate from the FTA. The document confirms that both individuals and businesses have no outstanding tax dues and are fully compliant. Also, you can use the certificate as proof that you have no more tax dues when:
- The company is going through bankruptcy or liquidation
- Another company is taking over your business
- When you need to deregister for VAT because your company’s sales fall below the voluntary and mandatory thresholds.
- Applying for government contracts or approvals
The TCC certificate ensures that the company has fulfilled all its obligations and can proceed without any complications.
Who Should Get a Tax Clearance Certificate in UAE?
A tax clearance certificate (TCC) is essential for both individuals and businesses under certain circumstances, such as,
- Company Owners. During the liquidation or closing of a business.
- Tax Refunds Applicants. To ensure there are no tax dues.
- Businesses Undergoing Acquisition or Mergers. To prove tax compliance before a transfer.
- Banking or Government Transactions. Necessary for financial or regulatory compliance.
- Transfer of Ownership. To confirm the complete tax agreement before handing over the company.
What are the Eligibility Criteria for Tax Clearance Certificate in UAE?
A tax clearance certificate requires you to fulfil the following criteria,
Compliance with Tax liability – Tax Clearance Certificate in UAE
Companies must file all tax returns, including VAT, and ensure they have no outstanding tax liability.
No Outstanding Penalties or Fines
The company must apply for a TCC after the payment related to incorrect tax submissions or late tax filings.
Valid Trade License
Businesses must attach a valid or recently expired license to their application.
Eligibility for Tax Refund (if required)
An applicant can apply for a refund if they have a clean relationship with the federal tax authority.
Business Liquidation Documents (If Required)
Companies going bankrupt or ending their business operations must complete their liquidation documents and deregister for VAT.
Situations Where a TCC is Required – Tax Clearance Certificate in UAE
The requirement of a tax clearance certificate is in the following circumstances,
Business Closure or Liquidation
Before liquidation and deregistration, the company’s owners must settle all their tax liabilities and present a Tax Clearance Certificate (TCC) to the Federal Tax Authority.
Change of Business Ownership
Buyers or stakeholders often require a TCC to confirm that there are no outstanding obligations.
Financial or Government Contracts
When bidding on government contracts or applying for a loan, authorities may request that you provide a TCC along with other documents.
Application of Tax Refund
For tax refunds by the FTA, you may need a TCC to confirm tax compliance.
Business Mergers or Restructuring
A TCC finalizes a merger or restructuring of a company by verifying the settlement of tax obligations.
How to Apply for a Tax Clearance Certificate in UAE?
Follow the steps given below to apply for a Tax clearance certificate in the UAE.
Fulfilling All Tax Obligations – Tax Clearance Certificate in UAE
Ensure VAT returns, corporate tax filing reports, and all other tax documentation are error-free. The business needs to demonstrate that it has paid all due taxes to the FTA and has no outstanding fines or penalties. Companies must settle their pending tax dues before proceeding.
Submit Required Documents – Tax Clearance Certificate in UAE
The document requirement for businesses and individuals is as follows,
For Businesses
- Copy of trade license
- Liquidation documents (if applicable)
- Bank statements (if required)
- VAT and corporate tax registration documents
- Payment receipts and tax return filings
For Individuals
- Copy of Emirates ID and passport
- Tax return filings and payment receipts
- No dues confirmation
Submit Application Via FTA’s Portal
Login to the Federal Tax Authority’s e-services portal and open the “Tax Clearance Certificate” section. Fill out the form and attach the required documents.
Submit Your Fee – Tax Clearance Certificate in UAE
You may need to pay processing fees for specific conditions. Every applicant must pay dues during the application completion process.
FTA Verification
The FTA reviews and verifies your application and may require you to provide additional information or make some corrections. The processing time varies depending on the type of case.
Receive Your TCC
After obtaining approval from the FTA, you can download the tax clearance certificate via email or the FTA’s e-services portal.
The TCC certificate is applicable for both business Liquidation and transfer of ownership, as well as other official requirements.
What is the Cost of a Tax Clearance Certificate in UAE?
The fee for obtaining a tax clearance certificate is AED 50. Additional charges may apply for documents required and based on tax compliance history.
What is the Importance of a Tax Clearance Certificate in UAE?
TCC serves as proof that businesses and individuals have no outstanding tax obligations with the FTA. Obtaining a tax clearance certificate brings the following benefits to the registered entities in the UAE.
benefits to the businesses in the UAE,
Evidence of Legal Tax Compliance
The certificate confirms that the company is operating by the tax laws of the UAE and has fulfilled all its tax obligations.
Mandatory for Business Closure
TCC is mandatory for the cancellation of a company’s trade license and VAT deregistration.
Smooth Business Transfers
Facilitates transparent and smooth transfer when restructuring or selling your company.
It avoids Delays and Fines.
An incomplete application without clearing tax dues may result in rejection and legal penalties.
Helps with Visa and Residency Application
If your residency visa application is related to a business activity, you may need to submit a TCC to the immigration authorities.
Promote Business Reputation
It demonstrates financial transparency, which enhances trust among clients, business partners, and government authorities.
How to Download a Tax Clearance Certificate from EmaraTax Portal?
Here’s how you can download TCC from Emaratax Portal.
EmaraTax Portal Sign up or Login
The first step is to log in to the Emaratax Portal using your UAE pass or log in details. If you don’t have an Emaratax account, you can sign up using your credentials on the website. After logging in, you will be able to view the user dashboard.
Fill Out the Form
On the left panel, select clearance certificate under the “other services” option. Click on “New Request” to access the application form. This page provides the necessary guidance for completing the TCC application form.
Provide the Following Information
The trade license drop-down list displays your trade licenses for deregistered accounts, including those for VAT, excise, or tax agencies. Provide all the details, including the license issuance authority, license number, issuance date, and expiry date.
Please mention your license and legal name in both English and Arabic and attach a copy of your trade license.
Reviewing the Tax Application Form
The applicant must review all the details carefully in the application form. Verify the document information and confirm that the provided documents are accurate and complete. After reviewing the form, please fill out the declaration. The last step is clicking the ‘submit’ option to submit your form to the Federal Tax Authority.
Endnotes
Obtaining a tax clearance certificate is essential to demonstrate that you have no outstanding tax liabilities. Whether you require the certificate for closing your company, transferring ownership, or any other reason, your company must clear its tax dues. The process is complex and time-consuming, which is why it is advisable to seek professional help.
Al Riyady can assist you with your TCC application, ensuring that all your business meets all tax requirements and that the documents are accurate and complete. Our expert team can also help you with Accounting Services, Auditing Services and more. Contact us today for a hassle-free business and tax consultation.
