Tax treaties signed by the Emirates

List of tax treaties

The United Arab Emirates have signed several double taxation agreements with the following countries:

Algeria, Germany, Armenia, Austria, Azerbaijan, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, Canada, China, Cyprus, South Korea, Egypt, Spain, Estonia, Finland, France, Georgia, Hungary, Mauritius, India, Indonesia, Italy, Kazakhstan, Latvia, Lebanon, Lithuania, Luxembourg, Malaysia, Malta, Morocco, Mexico, Mongolia, Montenegro, Mozambique, New Zealand, Pakistan, Panama, the Netherlands, the Philippines, Poland, Portugal, the Czech Republic, Romania, Russia, Serbia, Seychelles, Singapore, Slovenia, Sudan, Sri Lanka, Syria, Tajikistan, Thailand, Tunisia, Turkmenistan, Turkey, Ukraine, Venezuela, Yemen.

Understand a tax treaty

An international tax treaty is an agreement binding two states that concerns all or part of their tax relations.

International tax treaties prevent taxpayers from being taxed twice as a result of the simultaneous application of the tax laws of the two contracting states.

What a tax treaty provides

Affected people and period
  • Individuals - income tax, inheritance tax, etc. - and legal entities.
  • A period of application, with retroactive effect when the income concerned relates to years preceding its effective date.
Organization of the authority to impose taxes
  • The allocation of taxing rights.
  • Methods for avoiding double taxation.

1. Concept of residence

The taxpayer’s country of tax residence, as an individual, generally makes it possible to determine the applicable tax rules. The criteria are examined in order of priority.

Permanent residence

Primary criterion considered when determining the taxpayer's country of tax residence.

Centre of vital interests

Personal and economic ties of the taxpayer.

Usual place of stay

The place where the taxpayer usually stays may also be taken into account.

Nationality

Nationality may potentially be one of the determining criteria.

2. Allocation of the right to tax

International tax treaties generally provide for three main methods of taxation, depending on the category of income.

Exclusive taxation in the state of residence

For example, for certain capital gains on securities, unless otherwise specified.

Taxation exclusively in the source state

For example, for certain public-sector salaries, except in specific cases.

Non-exclusive taxation in the source state

For example, for real estate income and capital gains.

Methods for avoiding double taxation

Exemption method

Full exemption: income already taxed is not taken into account.

Exemption with progression: income already taxed is taken into account to determine the tax rate applicable to other income.

Imputation method

Full imputation: calculation of tax on the total amount of income, followed by deduction of the tax paid in the other State.

Ordinary imputation: deduction of tax already paid, up to the limit of the tax payable in the State of residence on the income taxed abroad, in the form of a tax credit.