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UAE – Netherlands Double Tax Treaty

UAE – Netherlands Double Tax Treaty

Convention for the avoidance of double taxation

The Netherlands and the United Arab Emirates have signed a Convention for the avoidance of double taxation and the prevention of fiscal evasion. This treaty covers taxes on income levied on individuals and companies in the Netherlands and the UAE.

The two Governments have signed this Convention in order to improve the economic relations and encourage foreign investments to and from one country to another. The treaty allows for preferential tax rates and is advantageous for companies that have opened branches in the Netherlands and in Dubai or the rest of the Emirates.

Our accounting firm in the Netherlands provides various services for companies and our agents can help you with tax compliance if you are a UAE investor in the country.

Taxes covered by the treaty

The double tax agreement (DTA) applies on taxes on income imposed in both countries. The taxes for which the treaty applies in the Netherlands are:

– the income tax;

– the tax on salaries;

– the company tax;

– the dividend tax.

The taxes to which the Convention applies in the United Arab Emirates are the income tax and the corporate tax.

Also included in the Convention are any taxes applicable after the signature date of the agreement and those which are levied in place of or in addition to existing taxes. The two Governments have agreed to notify one another of any tax changes in the country. 

Taxation relief according to the UAE-Netherlands DTA

The double tax treaty applies to companies or individuals which are considered residents of one of the contracting states. For the purpose of the treaty, a company is a tax resident if it is incorporated in one of the countries. Also, as defined in the treaty, a company has a permanent establishment in one of the counties if that place is used for the total or partial management of its activities in the country.

The Convention for the avoidance of double taxation offers a preferential withholding tax rate for dividends: reduced rates of 10%, 5% or 0% are applicable under the Netherlands-UAE tax treaty. Based on the agreement, income produced in one of the Contracting States is only taxed once, in the country where it is produced. 

If you are a foreign investor in the Netherlands and need to know more about taxation you can contact the experts at our Dutch accounting firm.