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Double Tax Treaty UAE-The Netherlands

Double Tax Treaty UAE-The Netherlands

The UAE and the Netherlands have signed their first double taxation agreement in 2007. Compared to other UAE double taxation treaties which are usually signed for definite periods of time, the one with Holland does not contain any clause referring to a validity period. The agreement was renewed in 2010 and enforced in 2011. The new double taxation agreement between the UAE and the Netherlands aims towards better economic cooperation and the minimization of taxation of incomes in both countries.

What are the provisions of the UAE-Holland double tax treaty?

The taxes covered by the UAE-Netherlands double taxation agreement are:

  • the income, the corporate, the wages and the dividend tax in the Netherlands,
  • the income and the corporate tax in the UAE.

The agreement also covers the tax applied to the net profits of exploitation of natural resources imposed to companies in the Netherlands. Therefore, UAE petroleum companies operating and paying this tax in Holland will receive a tax credit.

The UAE-Holland double taxation treaty applies to both individuals and companies residing, respectively registered in one or both contracting states. There are also provisions regarding how residency is determined you can ask our company formation agents in Dubai.

With respect to companies, the UAE-Netherlands double tax treaty has enabled the term permanent establishment which determined how the avoidance of double taxation will occur for branch offices, places of management or factories open by UAE companies in Holland and by Dutch companies in the Emirates. The agreement also establishes how and where the taxes will be levied and how the avoidance of double taxation will occur in both contracting states.

New tax rates under the UAE-Netherlands double tax agreement

The latest double taxation agreement between the UAE and the Netherlands has brought few changes to the tax rates. Under the new convention, companies owned by the UAE Government will benefit from a 0% tax rate when repatriating dividends, while non-governmental companies will pay a 5% withholding tax on dividends compared to the previous 15% tax rate.

For additional information about the contents of the UAE-Holland double taxation treaty, please contact our agents in company registration in Dubai.