Tax agreement between Saint Vincent and the Grenadines and the UAE in force

Tax agreement between Saint Vincent and the Grenadines and the UAE in force

According to a recent update by the UAE Ministry of Finance, the income tax and capital tax agreement between Saint Vincent and the Grenadines and the United Arab Emirates entered into force on March 3, 2020. The agreement, signed on November 26, 2018, is the first of such agreements. view between the two countries.

Covered taxes

The treaty covers the personal income tax of Saint Vincent and the Grenadines, corporate income tax and PAYE. It covers income tax and corporate tax in the UAE.

Income from hydrocarbons

Article 3 (Income from hydrocarbons) provides that, notwithstanding any other provisions of the treaty, nothing shall affect the right of the UAE or any of its local authorities or local governments to apply its internal laws and regulations related to taxation of income and profits received from hydrocarbons and related activities located on its territory.

Service emergency

The contract includes a clause stating that a permanent establishment will be deemed to have been established when an enterprise provides services in a Contracting State through its employees or other hired personnel for the same or related project for a period or periods cumulatively more than 9 months.

Income tax rates

Dividends – 0%
Interest – 0%
Royalty – 0%
Capital gain

The following capital gains obtained by a resident of a Contracting State may be taxed in the other State:

• Profit from the alienation of immovable property located in another State, but the amount of tax collected in this way is reduced by 50%;
• Income from the alienation of movable property that forms part of the commercial property of a permanent establishment in another State;
• Profit from the disposal of shares of a company, the share capital of which is formed, directly or indirectly, by more than 50% of immovable property located in another State, unless they are quoted on a recognized stock market.
• Profits arising from the alienation of other property by a resident of a Contracting State may be taxed only by that State.

Elimination of double taxation

Both countries use the credit method to eliminate double taxation.

Exemption from payments to the state

Article 29 (Income of Governments and Institutions) provides that any income or capital gains received by the federal or local government of a Contracting State and their financial institutions from the other Contracting State shall be exempt from tax in the other Contracting State, with the exception of income from hydrocarbons as specified in article 3 in the case of the UAE.

Effective date

The agreement comes into force on January 1 of the year in which it was signed, that is, on January 1, 2018.

The above is for informative purposes only.  Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.