Although tax treaties directly affect individuals and businesses, they are subject to a broader political environment. „The high level of fiscal sovereignty is, to some extent, concerned that too many companies are opening a branch or business in the United Arab Emirates. You can have a business in Europe and sometimes pay up to 50 percent in taxes, and here in the United Arab Emirates you pay zero percent tax,” says Azhari. We are confident that the European Union will remove the name of the United Arab Emirates from its list of non-cooperative tax systems and look forward to moving on to the next stage of cooperation with the relevant authorities of the European Union on other important issues related to tax cooperation between the two sides,” he added. However, Al Khoori said the ministry is „currently working with all stakeholders at the local and international levels to come up with a plan that meets all the required standards on time.” This agreement is the first DTT among the members of the Gulf Cooperation Council (GCC). The DTT came into effect on April 1, 2019 and normally applies from January 1, 2020. The DTT could offer a reduction or potential exemption from the KSA National Energy Tax (WHT) for KSA payments in the United Arab Emirates. Of the 90 tax treaties in force, 42 are in Europe, 23 in Asia, 13 in Africa, 4 in the Middle East, two in South America, two in Central America, two in Oceania and one in North America and one in North America and the Caribbean. The treaty with Russia is a state agreement on investment income tax, which means that it applies only to the profits of dividends, interest and capital gains of governments and their financial or investment institutions. „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.” 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 States, in particular, receives special treatment for the UAE government and double taxation,” Said Al Khoori.