UAE-Netherlands tax treaty in force - features for UAE investors |
Treaty puts the Netherlands on top of list of most favourable holding jurisdictions for UAE investors
On 21 April, the Netherlands formally ratified its income tax treaty with UAE. As a result, the UAE-Netherlands tax treaty (the “Treaty”) will enter into force as of 1 January 2011, while withholding taxes may already be reduced 30 days after the Netherlands and the UAE have officially notified each other on the ratification procedures.
Features: Dutch holding for global investments
The Treaty contains several features which put the Netherlands immediately on top of the list of most favourable holding jurisdictions for UAE investors investing internationally.
The Treaty, in combination with the domestic Dutch tax regime and the Dutch treaty networks may provide for
o tax free dividend income and capital gains income received by the Dutch holding from qualifying global investments
o tax free repatriations and payments of dividends, interest and royalties to the UAE.
o reduced/zero withholding taxes and capital gains taxes in the countries of investments (including countries such as India,
Indonesia, Turkey, Vietnam and the EU etc.)
o access to the extensive Dutch Investment Protection Treaty network: these treaties provide for protection against potential nationalizations without proper compensations in the countries of investments.
Treaties play a vital role in achieving tax efficiency and investment protection on cross-border investments. The Netherlands has one of the most extensive and internationally recognised treaty networks in the world, comprising tax treaties and investment protection treaties with over 90 countries. By using the Netherlands as an investment hub UAE investors can get indirect access to all these tax treaties, and therefore may substantially increase their return on the investment by way of tax savings in the target countries under the Dutch tax treaties
with these target countries.
In the case of UAE, the Treaty is accessible for
o any Emirati individual who has a permanent home, his centre of vital interest, or habitual abode in the UAE,
o any company having its place of effective management in the UAE;
o the state itself, any political subdivision, local authority or statutory body thereof; and
o a pension fund that is recognised and controlled according to the statutory provisions of the UAE and the income of which is generally exempt from tax.
How can we assist?
Loyens & Loeff can assist in (i) investigating your current international tax exposure, (ii) identifying alternative investment routes for crossborder
investments and (iii) coordinating the implementation of efficient investment structures. In short, we are fully equipped to assist you
with this opportunity of increasing your return on global investments.
Loyens & Loeff N.V. - Contact for the Gulf region: Stijn.Janssen@loyensloeff.com Tel: +971-4-4372707 |
