UAE And South Korea Sign Double Taxation Agreement

by Lorys Charalambous, Tax-News.com, Cyprus

24 September 2003

During his visit to the IMF and World Bank annual meeting in Dubai last week, South Korean Finance Minister Kim Jin-pyo signed a double taxation accord with his counterpart from the United Arab Emirates which is expected to lead to an increased capital inflow to the Asian country.

"The deal is expected to help double the capital investment from the UAE by the end of this year," Kim told reporters after a joint signing ceremony with UAE Finance Minister Al Maktoum. "A huge amount of short-term capital in the region has been drifting in search of investment vehicles since the war in Iraq," he added.

Under the terms of the agreement, investors from the UAE will enjoy a tax cut on dividends and interest from 27.5% to 10% and Kim revealed that 41 Korean firms operating in the Middle Eastern nation will benefit from the treaty.

According to the Korea Times, investors from the Emirates pumped $1.3 billion into the Korean stock market during August, accounting to 0.5% of total market capitalisation.

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