Represented by the Ministry of Finance (MoF), the UAE signed yesterday a final agreement to avoid double taxation on income with Palestine.
The agreement was signed by Younis Haji Al Khouri, Undersecretary of MoF, and Dr Khairi Al Oraidi, Ambassador of Palestine to the UAE.
This agreement aims to support the development of economic relations, improve the investment climate between the two economies, promote importing and exporting operations in addition to developing direct trade between both countries. It reflects the efforts of MoF to enhance financial relations with various countries around the world, and its continuous quest to provide full protection for taxpayers from double taxation, whether direct or indirect.
Furthermore, the agreement serves to strengthen the UAE s efforts to further access the world s economy through promoting the free movement of production factors, increase investment opportunities, and encourage import and export operations while avoiding the obstruction of the free flow of trade and investment.
Commenting on the signing of this agreement, Al Khouri said, "The signing of the agreement to avoid double taxation between the United Arab Emirates and Palestine is one of the important steps that we have undertaken to strengthen mutual relations between both countries economically and financially. This agreement comes under considerable efforts by the Ministry to consolidate and strengthen the economic and investment cooperation between the UAE and the world. This is a mutual beneficial arrangement that will have a positive impact on the investment climate and economic development in the UAE." "This type of agreement positively affects the protection and guarantee of investments and economic and trade cooperation between nations. In addition, it provides significant benefits to citizens, companies, sovereign funds, private sector institutions and residents as well as institutions of the federal and local governments, in addition to state owned airlines which are exempt from all taxes." he added.
The UAE has signed 64 agreements to avoid double taxation, and all have been adopted and under implementation. Some of these agreements are with the most important trading partners worldwide, thus creating a distinctive investment climate for the private and public sectors as well as the development of the air transport sector. These agreements have aided in increasing the volume of trade and tourism further contributing to the economic and social development of the nation.
Double taxation agreements such as this help promote the development goals of countries by diversifying the sources of national income and increasing the volume of inward investment. Additionally, it takes into account tax matters and the prominent changes witnessed in the financial and economical world, along with new financial instruments and mechanisms for pricing and the removal of most forms of tax discrimination and reduction on certain taxes that were imposed on foreign investors.
These agreements also provide a package of normative acts for states that face tax evasion, and create a framework to resolve tax disputes. They also provide a stable tax environment for foreign investors, leading to the enhancement of international competitiveness of the UAE economy.