MoF holds 2015 consultative meeting on double taxation avoidance and the protection and promotion of investment agreements
The Ministry of Finance (MoF) recently organised a consultative meeting at its premises in Abu Dhabi; which was attended by key UAE foreign investment partners at a federal and local level. The meeting covered future plans to grow the UAE’s network of double taxation avoidance as well as protection and promotion of investment agreements with several UAE trading partners, in order to support growth and investment in the country.
The meeting was headed by HE Younis Haji Al Khoori, Undersecretary of MoF; with the participation of HE Khalid Ali Al Bustani, Assistant Undersecretary of International Financial Relations at MoF. They were joined by representatives from the Ministry of Foreign Affairs, UAE Central Bank, Emirates Investment Authority, Executive Council of Abu Dhabi, Executive Council of Dubai, Abu Dhabi Investment Authority, Mubadala Development Company, Investment Corporation of Dubai, International Petroleum Investment Company, DP World, Etihad Airways, Emirates Airlines and Air Arabia.
The agenda featured double taxation avoidance agreements, tax treaties on UAE investments before and after signing double taxation avoidance agreements, agreements on the protection and promotion of investments, agreements on the exchange of information for tax purposes and the 2014-2016 operational plan for future negotiations. Participants also shared their opinions about potential agreements and listed them in terms of priority.
Commenting on the meeting, HE Younis Haji Al Khoori, Undersecretary of MoF, stressed the importance of working closely with the UAE’s foreign investment partners. He highlighted that collaboration is key to expanding the UAE’s investor base across the world, which also strengthens the country’s position on the world trade map.
HE said: “The Ministry not only manages the federal government’s budget and revenue development but also plays an important role in boosting UAE investments across the world. The Ministry is keen to support and develop UAE investments, and provide protection from any non-commercial risks.”
The UAE Cabinet issued resolution no. (163/3) for 1989 as part of the Ministry’s mandate regarding negotiations on signing double taxation avoidance agreements with Arab and foreign countries; and resolution no. (16/382) for 1989 on selecting the Ministry as the authorised entity to negotiate and sign agreements on the protection and promotion of investments with Arab and foreign countries. Based on these decisions, the Ministry has established a negotiation team which includes representatives from MoF, the Ministry of Foreign Affairs as well as Abu Dhabi Investment Authority.
MoF has held talks on double taxation avoidance agreements with 18 new countries and conducted negotiations with 12 countries for protection and promotion of investment agreements in 2015. The Ministry plans to hold negotiations with 21 countries on double taxation avoidance agreements in 2015, alongside talks with 17 countries on protection and promotion of investment agreements. For 2016, the Ministry plans to sign double taxation avoidance agreements with 15 countries and agreements for the protection and promotion of investment with five countries.
The Ministry has signed 83 double taxation avoidance agreements, including 34 with European countries, 10 with Arab countries, 25 with Asian countries, 8 with African countries, five with Latin American countries and one with a North American country. These agreements are designed to promote the country’s development goals, diversify its sources of national income and eliminate double taxation as well as additional and indirect taxes. They also work to eliminate tax evasion and any obstacle related to cross-border trade and investment flows, as well as provide protection for taxpayers from double taxation whether direct or indirect, and promote the exchange of goods and services and the free movement of capital.
In regards to agreements for the protection and promotion of investments, the Ministry has signed 50 treaties with key trading partners, including 21 European countries, 9 Arab countries, 16 Asian countries as well as 4 African countries. Through these agreements, the Ministry aims to protect UAE investment from conflict resolution as well as non-commercial risks and those related to the transfer of profits and revenues in convertible currency. They also establish international investments and grant licenses to investors.
The agreements stipulate the rules and regulations to grant UAE investors with fair compensations and immediate confiscation in the case of expropriation of investments, as per the non- discrimination law. All compensation should be based on the market value of the investment.
The Ministry has signed initial agreements on the exchange of information for tax purposes with Scandinavian countries, including Sweden.
