UAE, Israel working on double tax treaty to encourage investment

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The United Arab Emirates and Israel have reached a preliminary agreement on avoiding double taxation, as part of moves to encourage investments between the two countries, the UAE finance ministry said on Thursday.

Israel and the UAE signed a normalisation deal on Sept. 15, forging formal diplomatic ties. Israel ratified the deal in a cabinet vote on Monday and a parliamentary vote on Thursday.

Several commercial agreements have been signed between the two countries since mid-August, when they agreed to normalise relations.

“There is a preliminary agreement between both countries to start negotiations with Israel on Double Taxation Avoidance Agreement soon,” the UAE finance ministry said in a statement, citing undersecretary Younis Haji Al Khoori.

“The Ministry of Finance is keen to expand its international relations network by signing double taxation avoidance agreements and agreements to protect and encourage investments,” Khoori said.

Such tax treaties help prevent similar taxes being imposed by two countries on the same taxpayer, and are aimed at encouraging the exchange of goods, services and capital.

The UAE has around 100 double taxation agreements covering most of its trade partners.

“The first round of negotiations on an agreement to protect and encourage investment confirms the two countries’ efforts to build investment partnerships in various fields,” said Khoori.

Ahead of Thursday’s ratification vote in Israel’s parliament, Foreign Minister Gabi Ashkenazi said Abu Dhabi was expected to send its first official delegation to Israel next week.

Read More: Reuters