The tax convention UAE – Finland is an instrument to strengthen the economic and trade relationships between the two countries. Moreover the treaty brings an important advantage to commercial entities who operate in one of the two states (UAE or Finland) and who obtain revenues from the other. Our law firm in Dubai provides tax planning and other legal services that might help an investor to familiarize with the tax policies in the UAE.
The taxation of income, according to the tax convention between UAE and Finland
Residents in UAE operating commercial activities in Finland will not pay twice the taxes which are due to the income obtained in Finland. The income or the source of revenue may consist in capital gains, but other forms of earnings are also included in the tax treaty. Moreover, dividends, interests and royalties benefit from preferential rates. The convention prevents as well the application of the real estate tax and the corporation tax in both countries.
In order to be allowed to profit from the provisions of the tax treaty between UAE and Finland, a commercial entity must prove it has a permanent establishment in the other country than that of its residence. Several methods for avoiding over taxation are available to the legal entities through an application to the relevant authority.
Our Dubai lawyers can offer to investors more details about the tax convention between UAE ad Finland and its application to their particular business.
Over taxation avoidance, according to the UAE – Finland tax convention
One of the most effective over taxation avoidance methods used between Finland and the UAE is the credit method. This assumes that an enterprise can deduce the payment of a tax by accessing a credit in its country of residence. The money can be used for reinvestment.
The main advantage of avoiding over taxation is that the economic agents are much more motivated to enter the market of another country. An investor in the UAE, resident of Finland, will be thus encouraged to try the economic climate of the UAE when relying also on the taxation treaty that supports his financial balance.
Moreover in the free zones of Dubai there are particular tax rules that are very encouraging for foreign investors, reason for which they have received the name of fiscal paradises.
You can confidently contact our attorneys in Dubai in order to employ one of our legal services or for information regarding the double taxation treaty between Finland and UAE.