Double Tax Treaty UAE – Portugal
Double Tax Treaty UAE – PortugalUpdated on Wednesday 07th June 2017
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The UAE and Portugal have signed a double taxation agreement in January 2011 which entered into force a year later. Although the two states have a solid economic relation which started many years ago, this important convention came at the right time and it was meant to avoid the double taxation on incomes, both for natural persons or companies with activities in one of the two contracting countries mentioned above. Our Dubai lawyers are ready to offer information and legal advice in taxation matters for those interested in opening companies in the country.
Taxes covered by the DTT between the UAE and Portugal
The intentions of the double tax treaty between the UAE and Portugal are clear and refer to taxes on salaries, pensions, wages, royalties, dividends and interests which are levied only in one of the countries mentioned above. It is good to know that the withholding tax is set at a 5% rate and it is available for incomes registered in the UAE or in Portugal. Any individual or company with incomes in one of the contracting states stipulated in the convention is entitled to a deduction which corresponds to the amount of the income tax payable in the other country. The DTT between the UAE and Portugal needs to be understood by all businessmen who want to avoid the double taxation, a case where our lawyers in Dubai can offer legal advice.
The taxes on profits of companies in the UAE or Portugal
The important convention between the UAE and Portugal protects the profits of a company from a double taxation. For instance, the profits of a company from Emirates with a permanent establishment in Portugal which derive from the exploitation of the natural resources in the UAE shall be levied only in the UAE, the same thing being available for Portugal companies with establishments in the Emirates. It is good to know that the incomes generated from oil and gas companies are subject to a withholding tax of 50%. As for the banks, this rate is set at 20%.
Natural persons and the incomes in the UAE or Portugal
Individuals from Portugal can benefit from the great taxation system in Dubai, where there are no taxes on incomes. We remind that if you work in Dubai and also have other money sources in Portugal, these are going to be levied in the home country according to the rules and regulations related to the taxation system.
If you would like to know more details about the double taxation treaty between the UAE and Portugal, we invite you to get in touch with our law firm in Dubai.