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Double Tax Treaty UAE – Canada

Double Tax Treaty UAE – Canada

The double tax treaty between Canada and the UAE was signed in June 2002, in order to avoid double taxation and fiscal evasion. The convention applies to income taxes and taxation of capital gains. Our Dubai lawyers can help you understand in detail the provisions of this convention which might apply to your company.

Beneficiaries of the double tax treaty UAE – Canada

The convention refers to residents of Canada or UAE, including the government structures of these two countries and the companies and entities established in both of them. Residence implies that the individual or the company is liable to taxation in that country by reason of having there a permanent establishment or domicile.

The income which enters the scope of the treaty may be either the one derived from immovable property or may consist of business profits. The convention provides that a company is in principle taxable in the resident state, but it can as well pay its taxes in the other state in the limit of the revenues which are obtained through a permanent establishment in the foreign state. Our Dubai attorneys can offer you counseling and representation, helping you understand and use your rights and options provided by the double tax treaty between UAE and Canada.

The treaty regulates how dividends, interests, royalties and capital gains are going to be taxed in Canada or UAE depending on each situation individually. It also explains how the taxation should function in the case of the associated enterprises.

The advantages of the tax convention between UAE – Canada

In case a Canadian company pays taxes in the UAE, the company can claim the payed amount as credit in the home country. 

The purpose of the convention is to encourage economic and trade relations between Canada and UAE. By reducing or eliminating the tax payment obligation, the foreign investments grow.

The shipping and airline companies benefit from freight tax exemption, thus trade exchange and cooperation being enhanced.

We invite you to contact our law firm in Dubai in order to clarify and implement the double tax treaty provisions to your enterprise in Canada or the UAE.