Israel, UAE sign tax treaty to boost economic cooperation

Published May 31, 2021
Israeli Finance Minister Israel Katz and UAE Finance Minister Obeid Humeid al-Tayyar sign the tax treaty on Monday. — Photo courtesy Israel Katz Twitter
Israeli Finance Minister Israel Katz and UAE Finance Minister Obeid Humeid al-Tayyar sign the tax treaty on Monday. — Photo courtesy Israel Katz Twitter

Israel and the United Arab Emirates signed a tax treaty on Monday, Israel's Finance Ministry said, describing the move as a spur to business development between the countries after they normalised relations last year.

The UAE finance ministry said in October that it had reached a preliminary agreement with Israel on avoiding double taxation.

The tax convention, once ratified by ministers and parliament this year, will be Israel's 59th and go into effect on Jan 1, 2022.

It is the first tax treaty reached in the wake of Israel's normalising relations with the UAE and Bahrain last year. In parallel, Israel has moved to improve ties with Morocco and Sudan.

The treaty is based primarily on the OECD model, Israeli Finance Minister Israel Katz said in a statement, adding that it “provides certainty and favourable conditions for business activity and will strengthen economic ties” with the UAE.

Under the agreement, tax deductions, dividends and royalties are capped.

Read: Land of wine and honey? Israeli settlers export to UAE, to Palestinian chagrin

Israeli Foreign Minister Gabi Ashkenazi said the treaty will enable significant promotion of investment and trade that will help both countries' economies.

Since a normalisation deal was signed last September, Israeli and Emirati banks and other companies have signed cooperation deals, while also establishing direct flights.

The normalisation has, however, created tensions with other Muslim states, especially in the backdrop of the recent Israeli violence in Palestine.

Read: Muslim states slam Israel — and each other’s ties to it

In a meeting of the 57-nation Organisation of Islamic Cooperation (OIC) earlier this month, diplomats criticised each other at different points over ties to Israel.

“The massacre of Palestinian children today follows the purported normalisation,” Iranian Foreign Minister Mohammad Javad Zarif said in the meeting. “This criminal and genocidal regime has once again proven that friendly gestures only aggravate its atrocities.”

Turkish Foreign Minister Mevlut Cavusoglu also joined Zarif in criticising the normalisation, though Israel maintains diplomatic ties with Ankara.

“There are a few who have lost their moral compass and voiced support for Israel,” he said. “If there are half-hearted statements within our own family, how could we criticise others? Who will take our words seriously?”

Opinion

Editorial

Agriculture tax
Updated 16 Nov, 2024

Agriculture tax

Amendments made in Punjab's agri income tax law are crucial to make the system equitable.
Genocidal violence
16 Nov, 2024

Genocidal violence

A RECENTLY released UN report confirms what many around the world already know: that Israel has been using genocidal...
Breathless Punjab
16 Nov, 2024

Breathless Punjab

PUNJAB’s smog crisis has effectively spiralled out of control, with air quality readings shattering all past...
Last call
Updated 15 Nov, 2024

Last call

PTI should hardly be turning its "final" protest into a "do or die" occasion.
Mini budget talk
15 Nov, 2024

Mini budget talk

NO matter how much Pakistan’s finance managers try to downplay the prospect of a ‘mini budget’ to pull off a...
Diabetes challenge
15 Nov, 2024

Diabetes challenge

AMONGST the many public health challenges confronting Pakistan, diabetes arguably does not get the attention it...