Israel, UAE sign double taxation prevention agreement

Israel and the United Arab Emirates signed a tax treaty on Monday to spur business development between the countries after they normalized relations last year, Finance Minister Israel Katz said on Twitter.

The tax treaty is based primarily on the OECD Model Tax Convention and is intended to encourage economic cooperation between countries. Along with clauses relating to nondiscrimination, exchange of information and prevention of abuse, the convention provides certainty to investors by providing reduced tax rates.

The convention must still be ratified in the Knesset and by the government, and final confirmation is expected later this year. Its provisions are expected to apply from January 1, 2022.

The tax treaty, the investment-protection agreement and the memoranda of understanding signed by the Finance Ministry lay the groundwork for increasing economic cooperation.

“The double-taxation prevention agreement with the UAE, which we signed today, is another significant milestone in the peace agreement and normalization between Israel and the circle of peace countries,” Foreign Minister Gabi Ashkenazi said.

“The agreement reflects the commitment and depth of relations we have developed between the countries in a short time,” he said. “This important agreement joins dozens of agreements that were signed by Israel and the UAE and dozens more agreements that are in the advanced stages of being signed.”

“This agreement will allow significant promotion of investment and trade, which will greatly help the Israeli and Emirates economies, as well as add weight to the two sides,” Ashkenazi said.

“I thank Finance Minister Israel Katz, the chief economist and employees, the Israeli head of mission to the UAE, Eitan Na’eh, the Foreign Ministry staff and the negotiating teams on both sides for the hard work that led to the signing of this agreement,” he said.