What is a Tax Clearance Certificate in the UAE and Why Is It Important?

As you finalize operations in the UAE you need tax clearance certification for both refunds and asset transfers. After checking every document you suddenly realize you need the Tax Clearance Certificate (TCC) to finalize your paperwork which seems to be complete. Your process needs this document since its absence creates unanticipated obstacles which lead to delay problems along with fines and application denial.
What is a Tax Clearance Certificate?
Businesses and individuals who want the Federal Tax Authority (FTA) of UAE to issue them a Tax Clearance Certificate must fulfill all their tax obligations for FTA to grant it. The certificate proves both business entities along with individuals are completely compliant with all tax laws without existing tax dues. The certificate functions as valid documentation of tax compliance despite legal or financial transition requirements.

Why is a Tax Clearance Certificate Important?
Think of a TCC as your financial clean slate. If you’re:

•  Closing or liquidating a business
•  Applying for government approvals or contracts
•  Transferring company ownership
•  Claiming a tax refund
•  Restructuring or merging your business

…a TCC ensures that you’ve fulfilled all obligations and can proceed without complications.

Who Needs a Tax Clearance Certificate?
A TCC is essential for both businesses and individuals under certain conditions. Common scenarios include:

•  Business Owners: When closing or liquidating a company.
•  Companies Undergoing Mergers or Acquisitions: To demonstrate tax compliance before a transfer.
•  Tax Refund Applicants: To validate there are no pending tax dues.
•  Ownership Transfers: Required to confirm full tax settlement before changeover.
•  Government or Banking Transactions: Often mandatory for regulatory or financial approvals.

Situations Where a Tax Clearance Certificate is Required

1. Company Liquidation or Closure
Before deregistering a company, owners must settle all tax dues and present a TCC to the FTA.

2. Change of Business Ownership
Buyers and new stakeholders often request a TCC to confirm no outstanding tax obligations.

3. Tax Refund Applications
A TCC may be required to validate compliance before the FTA processes refunds.

4. Government or Financial Dealings
Whether bidding for a government contract or securing a bank loan, authorities may request a TCC as part of the documentation.

5. Business Restructuring or Mergers
To finalize any restructuring or merger, a TCC is typically needed to verify tax obligations are settled.

Eligibility Criteria for a Tax Clearance Certificate in UAE
A TCC application requires you to fulfill several requirements.

•  Full Compliance with Tax Obligations
  Businesses need to file all tax returns which include VAT corporate tax among others while avoiding any outstanding tax obligations.
•  No Outstanding Fines or Penalties
  Apply for a TCC only after you make all payments related to late filings and incorrect tax submissions.
•  Business Closure Documentation (if applicable)
  The procedure for VAT deregistration alongside liquidation documentation forms the requirements for companies that have finished their operations.
•  Eligibility for Tax Refund (if applicable)
  Any applicant who wants a refund needs to maintain a clean relationship with the FTA.
•  Valid or Recently Expired Trade License
  A business needs to present either an active or an expired trade license when making their application.

How to Apply for a Tax Clearance Certificate in UAE

1. Ensure All Tax Obligations Are Met
Confirm that VAT returns together with corporate tax filing reports and other mandatory tax documents have been filed without errors. The business needs to verify that it has no pending taxes with the FTA together with no fines or penalties. Clearance of pending dues becomes necessary before moving ahead with any operation.

2. Gather the Required Documents

For Businesses:

• Trade license copy
•  VAT and corporate tax registration certificate
•  Tax return filings and payment receipts
•  Liquidation documents (if applicable)
• Bank statements (if requested)
  For Individuals:
•  Emirates ID and passport copy
•  Tax return records and payment receipts
•  No dues confirmation

3. Submit Your Application via FTA Portal

•  Log in to the FTA e-Services portal.
•  Go to the “Tax Clearance Certificate” section.
•  Complete the form and upload the required documents.

4. Settle Any Applicable Fees
The application completion requires payment of processing fees for certain circumstances. Every applicant needs to pay outstanding dues as part of their application completion process.

5. FTA Review and Verification
The FTA determines your application by requesting supplementary information or corrections which they would communicate to you. The processing duration needs assessment due to individual case factors.

6. Receive the TCC
The Tax Clearance Certificate becomes available for issuance following approval through email service or portal download at FTA.
The certificate functions for both business shutdown and ownership transition purposes and other official requirements.

Fees for a Tax Clearance Certificate in UAE
The fee to obtain a Tax Clearance Certificate stands at AED 50. Additional fees together with document requirements get determined by how you have handled your taxes and compliance history. The FTA maintains the most accurate fee information while Apeiron and FTA serve as the reliable sources regarding the fees.

Importance of a Tax Clearance Certificate in UAE
The Tax Clearance Certificate confirms that both individuals and businesses have no unfulfilled tax obligations in their dealings with the FTA. The procurement of a TCC brings essential benefits to entities operating in the UAE due to the following reasons.

• Confirms Legal Tax Compliance
  It serves as evidence that you’ve met all tax obligations and operate within UAE tax laws.
•  Required for Business Closure
  A TCC is mandatory when applying for VAT deregistration or canceling a company license.
•  Avoids Fines and Delays
  Submitting an application without clearing dues may result in legal penalties or administrative rejections.
•  Facilitates Business Transfers
  Ensures a smooth and transparent transition when selling or restructuring your company.
•  Helpful in Visa or Residency Applications
  Especially if your residency is tied to business activity, a TCC may be required by immigration authorities.
•  Boosts Business Reputation
  Demonstrates financial transparency, improving trust with clients, partners, and government bodies.

How Apeiron Can Help
Obtaining a Tax Clearance Certificate becomes complicated when there are missing tax returns or wrong documentation. That’s where Apeiron comes in.

As experienced tax and accounting consultants in the UAE, Apeiron can assist you with:

•  Preparing and reviewing all required documents
•  Ensuring tax compliance before application
•  Submitting and tracking your TCC application
•  VAT and corporate tax registration services
•  Resolving penalties or missed filings
  Apeiron delivers a customized TCC processing experience which provides easy and smooth services for your business needs whether you close a company, transfer ownership or need peace of mind.

Get in touch with Apeiron today to start your Tax Clearance Certificate application and ensure your business stays compliant with UAE tax laws.