UAE signs initial agreement with Japan to avoid double taxation on income
- United Arab Emirates: Wednesday, October 17 - 2012 at 15:33
- PRESS RELEASE
The United Arab Emirates, represented by the Ministry of Finance (MoF), recently signed an initial agreement with Japan to avoid double taxation on income at the Ministry of Finance - Japan in Tokyo. The Ministry of Foreign Affairs in the UAE and Abu Dhabi Investment Authority (ADIA) attended the agreement signing with the presence of the UAE Ambassador to Japan.
The agreement aims to identify all the recipients of tax and financial benefits that will be covered by the main agreement, including federal government institutions and local and sovereign funds, in addition to UAE nationals and private sector institutions that own investments in Japan.
This agreement also exempts national airlines from taxes, as well as any other airlines based in the UAE.
Furthermore, this agreement states that taxes are reduced on dividends from 20% to 5% with a reduction rate of 75% in cases where any UAE institution or company owns 10% capital of any Japanese company. Additionally, in cases where companies do not own that percentage, the taxes will be decreased from 20% to 10% with a reduction rate of 50%.
According to the agreement's provisions, Japan will exempt all UAE federal and local government institutions in addition to the UAE sovereign funds from 20% tax on interest profits. Typically, Japan imposes a 30% tax on capital profits as well, for residents and non-residents. The provisions of this agreement stipulate exemption of capital profits tax which results from owning shares or any interest in a company, including trust funds.
The agreement also provided various provisions and a protocol stating that no prohibition or restriction on tax exemptions or reductions will be applied, regardless of current or future local laws or as a result of any bilateral agreement between the two countries or multilateral agreement that either countries takes part in.
In conclusion, the parties agreed to complete the procedures for the final signing of the agreement as soon as possible, to strengthen the strategic partnership between both countries and facilitate the movement of capital, investments and technology as well as to promote trade, tourism and air transport between the UAE and Japan.
It is worth mentioning that the UAE has signed and adopted 66 agreements to avoid double taxation. These agreements included the most important trading partners of the UAE in order to strengthen its regional and international role through creating a distinctive investment climate of public and private sectors and developing of the air transport sector.
In addition, these agreements increased the volume of trade and tourism exchange, which contributed to the achievement of economic and social development for the UAE.
Articles in this section are primarily provided directly by the companies appearing or PR agencies which are solely responsible for the content. The companies concerned may use the above content on their respective web sites provided they link back to http://www.ameinfo.com
Any opinions, advice, statements, offers or other information expressed in this section of the AMEinfo.com Web site are those of the authors and do not necessarily reflect the views of AME Info FZ LLC / 4C. AME Info FZ LLC / 4C is not responsible or liable for the content, accuracy or reliability of any material, advice, opinion or statement in this section of the AMEinfo.com Web site.