TAX NEWS - JUNE 2010

UAE Tax: UAE signs double taxation avoidance and tax evasion prevention on income and capital agreement with Venezuela

The Ministry of Finance of United Arab Emirates announced today that it has signed an agreement of double taxation avoidance and tax evasion prevention on income and capital with the Bolivarian Republic of Venezuela. This agreement is in line with UAE's efforts to strengthen financial relations with various foreign countries and supporting investment promotion and economic development and cooperation.

This is the first such agreement signed by the UAE with a Latin American country and signals the start of negotiations with other countries of that continent.

The agreement enhances UAE's economic openness and the assists freedom of production and financial flows. It also plays a key role in strengthening and developing economic relations and partnership between the two countries. It will have a positive impact on trade by encouraging import and export operations and increase investment opportunities.

The agreement covers all types of taxes on income and capital, namely taxes imposed on total income or on elements of income including taxes on gains from transferring the ownership of the movable and immovable properties. It also covers taxes on investments in public and private sectors and contains simplifies financial and tax benefits of air and sea carriers.

Commenting on the agreement, HE Younis Haji Al Khoori, Director General of the Ministry of Finance, said, "This agreement is in line with our efforts to strengthen UAE's economic and investment cooperation with all countries of the world. In addition to improving investment climate and economic development, it also confirms UAE's lead in of double taxation avoidance agreements in the region. It will have a positive impact on protecting and securing investment, trade and economic cooperation between the two countries."

Like all double taxation avoidance agreements with countries that have strategic ties with UAE, this agreement will provide full protection to exchanged goods and services, in addition to facilitating capital movement. It is consistent with enhancing cooperation and developing economic relations and will have a positive impact on our macro-economy.