Tax Update 02

New Double Tax Avoidance Treaty Between Egypt and United Arab Emirates

Tax Update 02

New Double Tax Avoidance Treaty Between Egypt and United Arab Emirates

ALPHA ADVISORS Tax Update No. 02

Executive Summary

On June 3, 2021, new Double Tax Avoidance Treaty (DTAT) between Egypt and United Arab Emirates was published in the Official Gazette which was signed on November 14, 2019. The mentioned DTAT introduced core changes in dividends and capital gains treatments.

The new DTAT is expected be applied from January 1, 2022.

Update Highlights

  • Dividends and capital gains were exempted in Egypt under the old DTAT (provided that certain conditions should be met).

 

  • Dividends and capital gains were exempted in Egypt under the old DTAT (provided that certain conditions should be met).

 

  • Capital gains tax may be charged in Egypt on direct transfer of Egyptian shares.

 

  • New DTAT implications should be considered regarding any proposed transactions that would take place starting from January 1, 2022.

Update Details

Dividends tax treatment in the new DTAT
According to the new DTAT, dividends distributions by Egyptian companies to resident UAE shareholders will be subject to dividends WHT at a rate of 10%.
But it will be reduced to 5% if the shareholders hold at least 10% of the total share capital for a period of 365 days.

Capital gains tax treatment in the new DTAT
The new DTAT did not provide any protection from capital gains tax to be applied in Egypt on direct transfer of Egyptian shares.

About ALPHA ADVISORS

ALPHA ADVISORS has been established to provide wide legal and tax services through energetic and well-experienced Lawyers and Tax Advisors. It has been incorporated to provide tailored and integrated legal and tax services across a wide range of practice areas. Whether you are a start-up, growing business, well established organization or an entrepreneur with big dreams and bigger goals, ALPHA ADVISORS is established to fit your needs.

Responsibility & Commitment

ALPHA ADVISORS tax team has prepared this summarized tax update to introduce the new DTAT between Egypt and UAE.
Efforts have been combined to produce this report with clear and accurate content; however, this report aims only to spread general information and not intended to be relied upon as accounting, tax, legal or other professional advice. Please contact ALPHA ADVISORS for tailor made solutions.

Prepared By:

Mohamed Said – Partner – Tax Service Line

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