Signed on 24 May 2023, the new income tax treaty between the Czech Republic and the United Arab Emirates (UAE), took effect on 13 May 2024. This tax treaty encompasses the UAE income and corporate income tax as well as the Czech income tax on individual and legal persons.
The new treaty is replacing the previous agreement signed between the two nations in 1996.
Withholding Tax Rates
The dividend rate is set at 5% but will be exempt if beneficially owned by a Contracting State or its government, political subdivisions, local authorities, the Central Bank of a Contracting State, or any entity wholly owned, directly or indirectly, by the aforementioned entities.
The interest rate is 0%, and the royalties rate is also 10%.
Capital Gains
Capital gains realised by a resident of one Contracting State may be subject to taxation by the other State for:
- Gains from the sale of immovable property located in the other State.
- Gains from the sale of movable property that is part of the business property of a permanent establishment in the other State.
- Profits from the sale of other property by a resident of a Contracting State can only be taxed by that State.
Double Taxation Relief
Both countries will utilise the credit method to eliminate double taxation.
