Dubai Double Tax Treaties
DeltaQuest can assist you whether you are an individual or corporate entity in setting up a Dubai trust or Dubai foundation to achieve complete and comprehensive asset protection. For more information about Dubai double tax treaties, please read the information below. Alternatively, to establish a Dubai Trust or foundation please complete our Application Form, or if you require further information please Contact Us.
Dubai is a “no tax” emirate. Accordingly double taxation treaties are aimed at making Dubai a more attractive territory in which to operate by reducing taxation levied in the foreign jurisdiction on profits remitted abroad by foreign corporations operating in Dubai.
Currently there are 43 double taxation agreements signed by UAE. Under these treaties profits derived from shares, dividends, interest, royalties and fees are taxable only in the contracting state where the income is earned.
Although corporate income tax is not levied in the UAE the provisions of the treaties do not state that such income must be taxed to qualify for benefits.
Thus dividend income paid by a UAE company to a company, which has a double taxation treaty with UAE, may not be taxable in the hands of the foreign parent corporation even though it has not been taxed in the UAE.
However, many countries have anti-avoidance provisions which either set minimum levels of tax for income to benefit from tax treaties, or set out lists of low-tax countries, which do not qualify under tax treaties. Therefore it is necessary to study the tax legislation of each treaty partner as well as the text of the treaties themselves before assuming anything about the tax treatment of untaxed income flows originating in Dubai.
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