UAE, Ireland Sign DTA

by Lorys Charalambous, Tax-News.com, Cyprus

13 July 2010

Ciarán Madden, Ireland's Ambassador to the United Arab Emirates, and Younis Haji Al Khoori, Director General of the UAE Ministry of Finance, have signed a Double Taxation Convention on behalf of their respective countries.

The Convention is comprehensive in scope and generally follows the OECD Model Convention. It applies to taxes on income and gains imposed by both states.

The main purpose of the Convention is to avoid the taxation in both countries of the same income or gains. This is achieved by allocating exclusive taxing rights to one or other country, or where both countries retain taxing rights, by requiring the country of residence of the taxpayer to grant relief for the tax paid in the other country.

The Convention provides for no withholding taxes on dividends, interest and royalty payments. Other important Articles in the Convention include exchange of information provisions, which will aid the two states’ tax authorities in the fight against tax evasion.

If, as expected, the provisions for ratifying the Convention are completed by both countries in 2010 it will enter into effect from 2011.

Ireland has currently 48 Double Taxation Treaties in effect with several others in the pipeline.

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