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Double Taxation Avoidance Agreement (DTAA)

Paying tax on the same income in two different countries can be a big burden for many people, especially for international investors and expatriates. This situation is known as double taxation. To help avoid this, countries around the world sign agreements called Double Taxation Avoidance Agreements (DTAA).<br>

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Double Taxation Avoidance Agreement (DTAA)

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  1. DTAA DTAA DOUBLE TAXATION DOUBLE TAXATION AVOIDANCE AGREEMENT AVOIDANCE AGREEMENT

  2. Paying tax on the same income in two different countries can be a big burden for many people, especially for international investors and expatriates. This situation is known as double taxation. To help avoid this, countries around the world sign agreements called Double Taxation Avoidance Agreements (DTAA). These agreements make sure that individuals and businesses don’t have to pay tax twice on the same income. The UAE has signed DTAAs with many countries to support global trade, attract foreign investment, and show its strong commitment to fair and transparent tax practices.

  3. WHAT IS DTAA WHAT IS DTAA DOUBLE TAXATION AVOIDANCE AGREEMENT DOUBLE TAXATION AVOIDANCE AGREEMENT A Double Taxation Avoidance Agreement (DTAA) is a treaty between two or more countries designed to prevent individuals and businesses from being taxed twice on the same income. This situation often arises when income is earned in one country (the source country) and the taxpayer resides in another (the residence country). DTAAs establish clear guidelines to determine which country has the right to tax specific types of income, thereby eliminating or reducing the burden of double taxation.

  4. HOW DTAA WORKS HOW DTAA WORKS GLOBALLY Globally, DTAAs play a crucial role in facilitating international trade and investment by providing tax clarity and reducing the risk of double taxation. These agreements typically follow models like the OECD Model Tax Convention or the UN Model Double Taxation Convention, which outline standardised provisions for taxing rights and relief mechanisms. By doing so, DTAAs help in avoiding tax disputes and encourage cross-border economic activities.

  5. KEY PRINCIPLES & KEY PRINCIPLES & BENEFITS OF DTAA BENEFITS OF DTAA Understanding the key principles of a DTAA helps individuals and businesses know how these agreements work and how they can benefit from them. 1. TAX RESIDENCY 1. TAX RESIDENCY 2. SOURCE OF INCOME 2. SOURCE OF INCOME 3. ELIMINATION OF DOUBLE TAXATION 3. ELIMINATION OF DOUBLE TAXATION 4. REDUCED WITHHOLDING TAX RATES 4. REDUCED WITHHOLDING TAX RATES 5. MUTUAL AGREEMENT PROCEDURE 5. MUTUAL AGREEMENT PROCEDURE 6. EXCHANGE OF INFORMATION 6. EXCHANGE OF INFORMATION

  6. UAE’S NETWORK UAE’S NETWORK OF DOUBLE TAXATION AGREEMENTS OF DOUBLE TAXATION AGREEMENTS The UAE has established an extensive network of Double Taxation Avoidance Agreements international trade, attract foreign investment, and prevent the double taxation of income. As of 2025, the UAE has signed DTAAs with over 140 countries, covering most of its major trade and investment partners, such as: (DTAAs) to promote INDIA INDIA UNIT UNITED KINGDOM ED KINGDOM G GERMANY ERMANY FRA FRANCE NCE U UNITED STATES NITED STATES C CHINA HINA SINGAPORE SINGAPORE MALAYS MALAYSIA JAP JAPAN AN CA CANADA NADA SAU SAUDI ARABIA DI ARABIA QAT QATAR AR IA

  7. SECTORS BENEFITING SECTORS BENEFITING THE MOST FROM DTAA THE MOST FROM DTAA Several sectors in the UAE significantly benefit from the DTAA network, including: 1. FINANCE AND BANKING Reduced withholding taxes on interest and dividends enhance the attractiveness of the UAE as a financial hub. 2. OIL AND GAS Energy companies benefit from clear tax frameworks, reducing the risk of double taxation on international operations. 3. SHIPPING AND LOGISTICS DTAAs provide tax relief for shipping companies operating across borders, promoting the UAE’s position as a global logistics centre. 4. AVIATION Air transport firms benefit from tax exemptions or reductions, supporting the UAE’s aviation industry’s growth. 5. TECHNOLOGY AND TELECOMMUNICATIONS Tech companies enjoy favourable tax treatments on royalties and service fees, encouraging innovation and investment.

  8. HOW DTAA WORKS IN THE UAE HOW DTAA WORKS IN THE UAE Understanding how the Double Taxation Avoidance Agreement (DTAA) operates within the UAE is essential for individuals and businesses engaged in international activities. 01 02 03 1. Tax Residency Certificate 2. Eligibility Criteria 3. Application Process 1.Applications are submitted through the FTA’s Emara Tax portal. 2.Applicants must provide necessary documentation, including statements and proof of residency. 3.The TRC is typically issued for a specific tax period and must be renewed annually. Individuals: specific conditions, such as spending a certain number of days in the UAE or having their primary residence and financial interests country. Companies: incorporated in the UAE or those effectively managed and controlled Must meet To provisions of a DTAA, one must establish tax residency in the UAE. This is achieved by obtaining a Tax Residency Certificate (TRC) from the UAE’s Federal Tax Authority (FTA). The TRC serves as official proof of residency and is a prerequisite for claiming DTAA benefits. benefit from the financial in the Entities

  9. METHODS OF AVOIDING DOUBLE METHODS OF AVOIDING DOUBLE TAXATION IN UAE TAXATION IN UAE DTAAs employ two primary methods to prevent the same income from being taxed in both countries: 1. Exemption Method 2. Tax Credit Method Under this approach, income is taxed in only one of the two countries involved. For example, if a UAE resident earns income in a country with which the UAE has a DTAA, and the agreement specifies method, that income may be taxed only in the UAE and exempted in the other country. Here, the income is taxed in both countries, but the resident country (e.g., the UAE) provides a credit for the tax paid in the source country, reducing the overall tax liability. the exemption

  10. ELIGIBILITY ELIGIBILITY FOR DTAA BENEFITS IN THE UAE FOR DTAA BENEFITS IN THE UAE Individuals: Must have resided in the UAE for at least 183 days during the relevant financial year. Companies: Must be established in the UAE and have completed at least one year of operation. Ineligible Entities: Branches of foreign companies and offshore companies are not eligible to obtain a TRC, as they are not considered established in the UAE.

  11. AVOID DOUBLE TAXATION AVOID DOUBLE TAXATION SHURAA TAX THE EASY WAY WITH THE EASY WAY WITH SHURAA TAX Double Taxation Avoidance Agreement helps expats and businesses in the UAE avoid paying taxes twice on the same income. It’s a great benefit for those earning income in more than one country, giving them financial relief and more clarity on their tax responsibilities. But claiming DTAA benefits can get confusing without proper guidance. That’s why Shuraa Tax and Business Consultants are here to help. Our experts will guide you in getting your Tax Residency Certificate, explain the terms of the agreement clearly, and handle the paperwork for you. With Shuraa, you can enjoy the benefits of DTAA without any hassle.

  12. CONTACT US Phone +(971) 44081900 Email info@shuraatax.com Website shuraatax.com Location 601 Sheikh Zayed Road, 6th Floor, Aspin Commercial Tower – Dubai

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