Since mid-August, several trade agreements have been signed between the two countries, in which they have agreed on a normalization of relations. To implement the BEPS measures, the United Arab Emirates has signed a multilateral instrument that facilitates the modification of its existing treaties. “It allows the UAE to change all tax treaties through an agreement,” says Khan of the law firm Al Tamimi. “For example, between Austria and the United Arab Emirates, there is a provision that your VaE income is exempt from Austrian income tax,” says Azhari, an expert in international tax law. “The German Double Taxation Convention stipulates that any income tax you pay in the United Arab Emirates is deducted from German income tax, so you pay the full income tax in Germany.” “The first round of negotiations on a safeguarding and investment promotion agreement confirms the efforts of the two countries to establish investment partnerships in different areas,” Khoori said. Participation in an international tax framework offers significant guarantees and benefits for businesses and expatriates in the United Arab Emirates. Double taxation agreements assign tax duties and ensure that individuals and businesses are taxed only once. They clarify how certain types of income, such as dividends, property income and pensions, should be taxed and establish non-discrimination rules to avoid differences in treatment based on factors such as nationality or residence. The United Arab Emirates has concluded about 100 double taxation agreements covering most of its trading partners. “The United States, in particular, receives special treatment for the UAE government and double taxation,” Said Al Khoori.

“We didn`t negotiate anything, but we worked closely with the U.S. Treasury on the possibility of engaging in negotiations.” “We have covered almost 120 countries and are still expanding, we are signing other agreements with South American countries and a few other African countries, as well as cooperation with the Nordic countries,” Younis Al Khoori, undersecretary of state at the UAE Ministry of Finance, told The National. South Africans in the United Arab Emirates, who reside in South Africa, may soon have to pay foreign income tax. As part of a double taxation agreement with the United Arab Emirates, a provision of South African tax law provides for an exemption from the tax on income from working abroad, also known as the “Expat Tax”. This means that South African residents who work more than 183 days outside the country and who work for a continuous period of more than 60 days for a period of 12 months are not subject to South African tax. However, an amendment that will come into effect in March next year will limit this exemption to incomes up to 1 million rand (Dh252.950).

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Last Modified: April 13, 2021