Free Zones in the United Arab Emirates: Domestic and International Tax Issues

INTERTAX, Volume 43, Issue 6&7, 2015

4 Pages Posted: 25 Feb 2018

See all articles by Jon M. Truby

Jon M. Truby

Newcastle University Law School

Date Written: February 12, 2015

Abstract

Free Zones in the United Arab Emirates (UAE) offer an abundance of tax and economic advantages for companies wishing to incorporate in the UAE and develop their business with a high degree of flexibility. However, the application of Double Taxation Agreements (DTAs) makes it increasingly difficult to their access benefits, namely the reduction of withholding tax on dividends or interests, as Contracting States tend to require at least Tax Residency Certificates (TRCs). This increasingly pressing requirement leads to a double issue: the choice of the Free Zone in which it is conceivable to obtain a TRC and the general anti-abuse clause which could still allow the Contracting State to deny the right of benefiting from the provisions of a DTA even when a TRC has been issued. This article utilizes the example of the DTA between the UAE and Switzerland to illustrate and analyse this problem.

Keywords: UAE, Tax, Free Zones, Tax Residency, DTA

JEL Classification: K34, K2

Suggested Citation

Truby, Jon M., Free Zones in the United Arab Emirates: Domestic and International Tax Issues (February 12, 2015). INTERTAX, Volume 43, Issue 6&7, 2015, Available at SSRN: https://ssrn.com/abstract=3122250

Jon M. Truby (Contact Author)

Newcastle University Law School ( email )

Newcastle upon Tyne, NE1 7RU
United Kingdom

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