🇬🇧 United Kingdom — 🇦🇪 United Arab Emirates

Tax Treaty / Double Tax Avoidance Agreement detail

The UK-UAE Double Taxation Convention was signed on 12 April 2016 and entered into force on 25 December 2016. It is a relatively modern treaty and particularly significant given the UAE's role as a zero-corporate-tax jurisdiction (until the introduction of 9% corporate tax in 2023) and the large British expatriate and business community in the Emirates. Dividends from UAE companies to UK recipients are fully exempt from UAE withholding tax, as the UAE historically levied no dividend withholding. The treaty imposes a 15% limit on withholding that could theoretically apply if UAE law were to introduce such a tax. The more practical application is limiting UK withholding on dividends paid to UAE residents, where the treaty provides relief. Interest and royalties paid from either country to residents of the other are exempt from withholding under the treaty. The UAE does not impose personal income tax, capital gains tax, or withholding taxes on most categories of income under its current tax regime (the 9% corporate tax introduced in June 2023 applies only to corporate profits above AED 375,000). As a result, the treaty's primary utility for UAE residents is establishing treaty protection when investing into the UK, particularly for rental income, business profits, and capital gains where UK domestic rules might otherwise apply. HMRC has historically scrutinised UK residents claiming UAE residence to access treaty benefits, particularly given the UAE's zero personal income tax environment. Genuine residence—including a permanent home and centre of vital interests in the UAE—is required. No Totalization Agreement exists between the UK and UAE.