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UAE-Austria Double Tax Treaty

UAE-Austria Double Tax Treaty

The United Arab Emirates has signed a double tax treaty with Austria in 2003. The agreement was enforced by both countries starting with the following year. The taxes covered by the double taxation treaty are:

  • the income and the corporate taxes in Austria,
  • the income and the corporate taxes in the UAE.

Additionally, any similar taxes applied by the authorities in both states will fall under the governance of the double taxation agreement. For information about taxes levied in the UAE, you can refer to our company formation agents in Dubai.

Definitions provided by the UAE-Austria double tax treaty

The UAE-Austria double taxation agreement covers the taxes applied to both natural persons and corporations based on residency. The treaty also refers to permanent establishments as special operating sites of Austrian or UAE companies in the other country. The convention specifies that any offices, building sites, places of management or factories will be applied to the permanent establishment status if they operate in the country for at least twelve months. Branch offices of UAE and Austrian companies are also considered permanent establishments under the UAE-Austria double taxation treaty.

Taxation under the UAE-Austria convention

The UAE-Austria convention for the avoidance of double taxation establishes that incomes derived from the transfer of immovable property in one state by a resident of the other contracting state can be taxed in the country the property is situated in. Companies will be taxed on their profits only in their country of residency. Only permanent establishments will be taxed in the country they supply services in. Among the profits covered by the UAE-Austria double tax treaty are:

  • profits derived from operating vessels and aircraft in international traffic,
  • interests generated by the operation of such vessels or aircraft,
  • dividends,
  • royalties,
  • governmental services.

The agreement covers the following taxes when it comes to natural persons:

  • directors’ fees,
  • salaries,
  • pensions,
  • teachers and students’ payments.

For complete information about the reduced tax rates applied under the UAE-Austria double tax treaty, do not hesitate to contact our Dubai agents in company registration.