Avoid payment of withholding tax by using available double taxation treaties

What are Double Taxation Agreements (DTA)?

Double Taxation Agreements (DTA) are treaties between two or more countries to avoid international double taxation of income and property. On the one hand, there can be an exemption from tax payments or a reduced tax rate on respective payments.

Are there examples of double tax treaties in GCC?

United Arab Emirates and Saudi Arabia signed double tax agreement on the 1st of March 2019. The effect of this Double Tax Treaty (DTT) are as follows:

  • An exemption from withholding tax (“WHT”) on interest and service fees
  • A reduced WHT rate of 10% on royalty payments
  • A maximum 5% WHT on dividends (same as the domestic dividend WHT rate in KSA)
  • No relief from non-resident taxation on the transfer of shares or immovable property
  • Foreign national residents of the UAE or KSA may also benefit from the DTT
  • Sovereign Wealth Funds and certain entities that are exempt from tax expressly qualify for DTT benefits.

Am I automatically exempted from tax if there is DTT?

Unfortunately, not. There are residency certificates as well as relevant forms to be completed in order to avoid the Double Tax Treaty. You will need to consult expert tax advisors for this. Averyx is a registered tax agent in many jurisdictions and have many years’ experience in dealing with DTT and their impact on taxes.

Why Averyx?

Averyx is the leading tax consultancy in the GCC. We are at the forefront of latest information pertaining to taxes both locally and internationally. Our consultants have a competitive advantage for the following reasons:

  1. Registered tax agents in relevant jurisdictions such as UAE, Ireland and Australia;
  2. Expertise in Withholding tax, Double Tax Treaties and international tax law;
  3. Expertise in GCC VAT including a) advisory and accounting system upgrade; b) VAT compliance; c) VAT lodgment; d) VAT Impact Assessment for Operations and IT Systems; e) Import/ Export VAT advisory and consultation;
  4. UAE Excise duty consultation and lodgment;
  5. Consultants experienced in all areas of taxation such as Goods and Services Tax (GST), Value Added Tax (VAT), corporate taxes and income taxes;
  6. International advisory service providing the most efficient and effective corporate tax structures including BV and BVI structures.
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