UAE TAX RESIDENCY: WHAT IS THE DOUBLE TAXATION AVOIDANCE TREATY?
The United Arab Emirates has signed Double Taxation Avoidance Treaties (DTAT) with a number of countries so that individuals and businesses:
- Aren’t paying income tax to two governments for income earned in one country
- Aren’t paying income tax on investments to more than one government
- Can reduce or eliminate taxes paid on dividends and tax-exempt deposits
- Can be exempt from capital gains taxes
- National airlines and shipping companies can be exempt from freight taxes
- Government investment in the UAE can take advantage of tax breaks
DTATs benefit the United Arab Emirates because foreign investment and capital is attracted to the country and bilateral economic relations are enhanced. As of March, 2012, the UAE has signed DTAAs with more than 63 countries.