Advisory on Double Tax Avoidance
Creating a Smarter Tax Ecosystem
When two countries impose similar taxes on the same taxpayer within the same tax base, it negatively impacts cross-border trade, the exchange of goods and services, capital flows, and technology transfer. The UAE, however, features a relatively simple domestic tax structure and offers exemptions for double taxation.
With a network of tax treaties covering nearly 115 countries and additional treaties under negotiation, the UAE offers valuable tax relief to its companies and expatriates. These treaties also facilitate the Exchange of Information (EOI) between nations. Similarly, other GCC countries have established their own networks of Double Tax Avoidance Agreements (DTAAs).
Public and private companies, investment firms, air transport businesses, and residents in the UAE can all benefit from these DTAAs. To fully leverage these advantages, businesses must understand the specific provisions and implications of each treaty. Our global network of experts can help navigate these provisions and ensure you benefit from tax treaty reliefs.
With the expertise of PTG Consultant Corporate Services, you can discover innovative ways to utilise DTAAs and fully understand the exemptions available for double taxation. Additionally, by leveraging the Exchange of Information agreements, you can enhance your business strategy and strengthen your interests.
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How Double Tax Avoidance Agreements Help Your Business
The UAE has signed one of the world’s largest networks of Double Tax Avoidance Agreements (DTAAs), covering well over 100 countries. These treaties decide which country has the right to tax income such as business profits, dividends, interest, royalties and salaries, and they provide relief where both countries could otherwise tax the same income.
- Reduced withholding tax on dividends, interest and royalties paid to UAE entities from treaty countries
- Permanent establishment protection – clear rules on when foreign activities create a taxable presence
- Tie-breaker rules for individuals and companies that could be resident in two countries
- Mutual Agreement Procedure (MAP) to resolve disputes between tax authorities
Our DTA Advisory Services
- Review of your cross-border income flows and the applicable treaty articles
- Tax Residency Certificate (TRC) applications to claim treaty benefits
- Treaty-rate withholding tax claims and refund support in the source country
- Structuring advice that meets substance and Principal Purpose Test (PPT) requirements
- Interaction of treaty relief with UAE Corporate Tax and the foreign tax credit
Frequently Asked Questions
Do I need a Tax Residency Certificate to use a UAE treaty?
In most cases, yes. Foreign tax authorities and payers usually ask for a UAE TRC issued by the FTA before applying a reduced treaty rate.
Can a free zone company benefit from UAE tax treaties?
Generally yes, provided it is UAE tax resident and has genuine substance. Some treaties have specific conditions, so each case should be checked.
Paying tax twice on the same income?
Speak to an FTA-registered tax agent. Free 15-minute initial consultation.
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