The proliferation of tax treaties provides a number of benefits for the UAE. It encourages the flow of goods and services across borders and also aligns seamlessly with the nation's economic diversification strategy. Moreover, these UAE double tax treaties serve as formidable tools for swiftly and transparently resolving tax evasion issues, ensuring a fair taxation system.
Benefits of Double Taxation Treaties to UAE-Based Companies
UAE tax treaties provide the following benefits:
- Protecting Your Rights
Double taxation avoidance agreements prevent the same income from being taxed twice. They also clear up confusion about how various types of income, like dividends or property income, should be taxed. Plus, they ensure everyone gets fair treatment, no matter where they're from or where they live.
- Relief from Foreign Taxes
These agreements can provide relief from foreign taxes and certain foreign tax requirements in other countries. This is particularly significant for UAE companies, given the UAE's minimal tax burden, which mainly consists of Value Added Tax. Sometimes, these agreements result in exemptions and lower withholding tax rates on dividends, interest, and royalties for UAE companies operating internationally. Additionally, if a UAE company has international shareholders, it enjoys protection from being subject to the tax jurisdiction of those shareholders.
- Clarity on Taxation
For UAE companies, tax treaties ensure that income is not subject to double taxation. This means you won't face the burden of paying taxes on the same income in both your home country and the UAE. Moreover, these treaties offer clear guidelines on how various types of income, such as pensions, property income, and dividends, should be taxed.
Does the UAE have any double tax treaty with Turkey?
Yes, Turkey and UAE have both been part of a double tax avoidance agreement since 1995. This means that your business in Turkey can also be brought to the UAE without any double taxation risks. The Ministerial and Federal Decree no. 84/8 (1993) and 5 (1994), respectively govern this agreement.
Choose the Best Tax Consultants in UAE
Learn more about double tax treaties and how they operate with the help of our reputable tax consultants and advisors in the UAE. Our tax professionals are committed to furnishing expert tax solutions which ensures compliance with statutory tax regulations. Thus, contact us today and we shall be glad to assist you.