The UAE, which is considered as a cooperative jurisdiction for tax purposes by the European Union, has implemented an extensive favourable Double Tax Treaties network with 90 applicable double tax agreements and 39 in negotiation, signature or ratification.
UAE joined, on 16 May 2018, the Organisation for Economic Cooperation and Development (“OECD”) Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) and adhered to the multilateral convention incorporating BEPS (Basis Erosion Profit Shifting) clauses into its double tax treaties.
In addition, UAE applies a 0% corporate income tax rate, 0% withholding taxes on outbound dividend, interest and other payments, no foreign exchange control & 0% capital gain tax. UAE has implemented Economic Substance Regulations (requiring appropriate operational expenditures, management & control, core income generating activities & other minimum substance criteria in UAE to maintain a commercial purpose activity) and Real Beneficiaries (UBOs) / shareholders & nominee shareholders/ nominee directors registries.
Furthermore, UAE has established two insulated free zone jurisdictions which benefit of a direct application of English common law, with 100% foreign corporate ownership subject to independent ad hoc courts and regulator.
“UAE has substantial tax, legal, corporate, geographical, political and financial upsights to be considered as a jurisdiction of choice for corporate and transactional tax efficient structuring’’.
For a comprehensive understanding of Double Tax Treaty (“DTT”) Application to UAE Entities, list of UAE Double Tax Treaties, UAE Double Tax Treaty network rates UAE Tax Residency Certificate (“TRC”), VAT Exposure for UAE Holding Companies and Economic Substance Regulations – BEPS Related DTT Actions, then read our full article here on UAE Double Tax Treaties.
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