Hong Kong signed a comprehensive double taxation agreement (DTA) with the United Arab Emirates (UAE) in Dubai on December 11, 2014 for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
This agreement sets out clearly the allocation of taxing rights between the two jurisdictions and thus will help investors better assess their potential tax liabilities from cross-border economic activities.
In the absence of the CDTA, income earned by UAE residents in Hong Kong is currently subject to both Hong Kong and Emirati tax, where applicable. Under the agreement, tax paid in Hong Kong will be allowed as a credit against tax payable in the UAE and vice versa. The agreement also provides a framework for the exchange of tax information between the two territories.
