The United Arab Emirates has recently started to conclude double taxation agreements with more countries. However, there are also countries the UAE is still negotiating with. The UAE has started negotiating a double taxation agreement with the United Kingdom at the beginning of 2015. During the summer, the UAE Minister of State for Financial Affairs and the UK ambassador in the UAE have met to discuss bilateral trading relations between the two states which were focused on signing a double taxation agreement. The only agreement concerning economic relations between the UAE and the UK is a protection and promotion of investment agreement signed in 1992.
What will the UAE-UK double taxation agreement contain?
The UAE-UK taxation treaty will regulate the avoidance of double taxation with respect to the incomes of individuals and companies in the Emirates doing business in the UK and the other way around. The UAE-UK double taxation agreement will make sure that individuals are not taxed for the same income in both countries and on the investments they make by both governments.
As with all other UAE’s double taxation agreements, the one with the UK will also contain a provision for a reduction or elimination of taxes on dividends and interests. The agreement will also regulate how the taxation of capital gains will occur. Exemptions might also be provided for freight taxes for airline and shipping companies.
For details about the UAE’s taxation system, you can obtain more information from our company formation agents in Dubai.
What will the benefits of the UAE-UK double tax treaty be?
The most important benefit of the UAE-UK double taxation agreement will be the investment opportunities it will create. The agreement will attract UK companies to the UAE and UAE companies to the UK. The double taxation agreement between the UAE and the UK will also offer security in regard to cross-border trade and investment. Most double taxation treaties also contain provisions about the prevention of tax evasion and the UAE-UK tax treaty will most likely contain such dispositions.
For a complete list of UAE’s double taxation agreements, please contact our agents in Dubai.