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uae double taxation

UAE Double Tax Treaties: UAE Signs Agreements on Avoidance of Double Taxation

Tax transparency is an essential matter that should be observed by countries in the world. There have been concerns regarding international tax evasion and avoidance. The Ministry of Finance (MoF) of UAE is eager to take continuous actions regarding these obstacles that being faced by most nations.

The UAE, being a member of the Forum on Transparency and Exchange of Information for Tax Purposes, further shows its driven desire to be one of the competitive countries in the world through the Ministry of Finance (MoF)’s a continually growing network to be in discussion with other countries with regard to the agreements on exchanging tax information and avoiding double taxation.

These days, the UAE spreads its network across the five continents, having 94 agreements. This covers most of the UAE’s trading partners. Still, the UAE is on ongoing negotiations with 15 other countries.

Country List/Agreements on the Avoidance of Double Taxation:

Date of RatificationDate of Final SigningCountryNo.
7/16/19954/12/1994Egypt1
6/25/20044/24/2001Algeria2
4/29/20042/13/2001Yemen3
5/27/19974/10/1996Tunisia4
7/1/20002/9/1999Morocco5
6/6/20043/15/2001Sudan6
1/12/20021/26/2000Syria7
3/23/19995/17/1998Lebanon8
3/2/20049/24/2003Mozambique9
11/20/20002/7/1993Pakistan10
11/30/19924/29/1992India11
10/3/20073/27/2007Amendment Protocol
3/12/20134/16/2012Amendment Protocol
7/4/20049/24/2003Sri Lanka12
10/20/20089/23/2003Philippines13
3/9/20059/22/2003South Korea14
7/18/199612/1/1995Singapore15
Under Ratification10/31/2014Singapore / Amendment Protocol
6/1/199911/30/1995Indonesia16
1/4/20013/1/2000Thailand17
1/4/20013/1/2000Thailand17
9/24/199611/28/1995Malaysia18
7/22/19947/1/1993People’s Republic of China19
7/29/20049/24/2003New Zealand20
3/9/20042003Ukraine21
2/1/20012/27/2000Belarus22
1/23/19964/11/1993Romania23
Under Ratification5/4/2015Romania (New)
12/30/20116/9/1998Turkmenistan24
9/23/20034/22/2002Armenia25
3/27/200012/17/1995Tajikistan26
2/24/20042/21/2001Mongolia27
9/23/20049/23/2003Austria28
2/3/19941/31/1993Poland29
5/1/201512/11/2013Poland / Amendment Protocol
7/14/20117/1/2010Germany30
12/26/19973/12/1996Finland31
10/5/19971/22/1995Italy32
1/1/20059/30/1996Czech Republic33
11/8/19947/19/1989France34
12/22/20039/30/1996Belgium35
6/19/200911/20/2005Luxembourg36
Under Ratification10/26/2014Luxembourg / Amendment Protocol
1/29/19951/29/1993Turkey37
5/25/20046/9/2002Canada38
9/25/20079/18/2006Mauritius39
4/14/20079/19/2006Seychelles40
5/19/20099/18/2006Bosnia and Herzegovina41
6/12/200711/20/2006Azerbaijan42
4/2/20073/5/2006Spain43
9/13/20063/13/2006Malta44
6/2/20105/8/2007Netherlands45
11/16/20086/26/2007Belgium46
2/25/201110/26/2007Uzbekistan47
11/27/201312/22/2008Kazakhstan48
4/12/20102/16/2009Vietnam49
Under Ratification1/18/2010Greece50
Under Ratification6/27/2013Amendment Protocol
7/6/20117/1/2010Ireland51
4/28/201111/24/2010Georgia52
6/20/201112/11/2010Venezuela53
5/22/20121/17/2011Portugal54
6/13/20111/17/2011Bangladesh55
3/17/20132/27/2011Cyprus56
3/29/20124/20/2011Estonia57
10/21/201210/6/2011Switzerland58
7/9/201411/13/2011Guinea59
Under Ratification11/21/2011Kenya60
6/23/201312/7/2011Russia61
6/11/20133/11/2012Latvia62
2/11/20133/26/2012Montenegro63
12/20/20139/2/2012Fiji64
Under Ratification9/24/2012Palestine65
10/23/201310/13/2012Panama66
7/9/201411/20/2012Mexico67
7/2/20131/13/2013Serbia68
Under Ratification3/4/2013Benin69
Under Ratification4/1/2013Libya70
10/4/20144/30/2013Hungary71
12/24/20145/2/2013Japan72
11/21/20145/21/2013Nation of Brunei, the Abode of Peace73
12/19/20146/30/2013Lithuania74
9/29/201410/12/2013Slovenia75
3/25/20153/13/2014Albania76
Under Ratification9/22/2014Barbados77
Under Ratification10/10/2014Uruguay78
Under Ratification12/7/2014Kyrgyzstan79
Under Ratification12/11/2014Hong Kong80
Under Ratification2/12/2015Bermuda81
Under Ratification3/26/2015Comoro Islands82
Under Ratification4/12/2015Ethiopia83
Under Ratification6/8/2015Uganda84
Under Ratification7/27/2015Gambia85
Under Ratification7/28/2015Andorra86
Under Ratification10/1/2015Belize87
Under Ratification10/1/2015Liechtenstein88
Under Ratification10/22/2015Mauritania89
Under Ratification10/21/2015Senegal90
Under Ratification10/26/2015Macedonia91
Under Ratification11/23/2015South Africa92
Under Ratification12/21/2015Slovakia93
Under Ratification1/18/2016Nigeria94

Source: Ministry of Finance

The UAE has its best interests in protecting and promoting investments as well. There are 58 agreements that the UAE has signed with countries that represent investment opportunities. Negotiations are still ongoing with other five countries. In regards to better the international tax compliance that is associated with the Foreign Account Tax Compliance Act (FATCA), the UAE signed an agreement with the USA government.

The Agreements

The agreements that have been dealt with and continuously discussing with other countries helping in achieving a balance in the economy.
As per the decisions of G20, MoF is keen and dedicated to the execution of the highest transparency and information exchange standards for tax purposes. Along with this are the terms and conditions that go with the agreements, all for avoiding double taxation with the UAE’s economic and trading partners.

A. Double Taxation

A double taxation is paying tax twice for the same earned income. When you are tax twice in two different countries this happens. This is where the double taxation agreement comes in, which ensures that you won’t be charged twice for tax at the same time in different states or countries for the same income.

The Ministry of Finance (MoF) organized together with a team that is comprised of representatives from different divisions, namely the Ministry of Foreign Affairs (MOFA) and Abu Dhabi Investment Authority (ADIA), and named it the International Financial Relations and Organisations Department. This group has the responsibility of negotiating and following up with nations regarding agreements on avoiding double taxation.

The Avoidance of Double Taxation agreement has the following goals:

  • Promoting UAE’s development goals and diversifying the sources of the country’s national income
  • Eliminating is not just double taxation, but, also additional and indirect taxes, tax evasion
  • Eradicating cross-border trade and investment flow obstacles
  • Providing taxpayers the protection they need from double taxation—direct or indirect
  • Promoting the capital’s free movement and the exchange of goods and services

B. Investor Protection

The protection of the investments is in one of the UAE’s best interests, signing 58 agreements with the aim to protect and promote investments. These agreements have done between the UAE, 25% of the nations in the world, and most of its trading partners.

The Investment Protection Agreement has the following goals:

  • Protecting the investments of the UAE from non-commercial risks, including those that are related to the transfer of profits and revenues in convertible currency
  • Organizing of conflict resolution (if needed)
  • Establishing investments within the states’ agreement signatories and granting licenses to investors who are Emirati
  • Stipulating the rules and regulations for granting the UAE investors with just and instantaneous compensations (without discrimination), in the events that investment expropriation happens; all compensations are necessary to be based on the investment’s market value.

C. Information Exchange

The MoF has been conducting agreements with countries in order to achieve transparency, justice, and protection for the economy. A Memorandum of Understanding (MoU) was signed by the MoF with the Organisation for Economic Cooperation and Development (OECD).

This agreement is with regard to creating and establishing a partnership that takes care of taxation matters, by which the UAE is strengthening its reputation as a training hub of MENA with regard to information exchange, as well as being the country that has qualified and active network of tax experiences.

There were eight MoUs that signed:

  • Central Bank of the UAE
  • Dubai International Financial Centre (DIFC)
  • Jebel Ali Free Zone (JAFZA)
  • Dubai Multi Commodities Centre (DMCC)
  • Fujairah Free Zone Authority
  • Ras Al Khaimah Free Trade Zone (RAK FTZ)
  • Ras Al Khaimah Investment Authority (RAKIA)
  • Umm Al Quwain Free Trade Zone Authority

MOF has signed An extended MoU for the 2016-2018 fourth period. Workshops had presented, showing the introduction to tax information with tax experts from different places in the world.

The points that have discussed in the workshops include the following:

  • Common international standards in the field of tax reports,
  • Implementation mechanisms,
  • Approved legal frameworks

The intention was to strive in developing a system for tax information exchange automatically. But, still has the interest of protecting the information and complying with confidentiality rules of the tax information exchange.

Conclusion

The UAE has always been venturing into becoming one of the most competitive countries in the world. The works that Ministry of Finance has been doing to safeguard and enhance economy balance shows the country’s vigor.
when it comes to things that might affect you with regard to tax, however, It is essential to be knowledgeable. Especially with the never-ending changes that are happening in the State. FAR – Farahat & Co. is happy to assist you. You can contact us here to book a consultation.