Impact of Double Taxation Agreements on Resident Taxable Persons

In some cases, due to cross-border activities, a Person may be resident for Corporate Tax purposes in more than one jurisdiction. For example, a company may be incorporated in one jurisdiction but effectively managed and controlled in another. If these criteria are used, as in the UAE, to determine the tax residence of a juridical person, this company would be tax resident in both jurisdictions.

In instances where there is an in-force Double Taxation Agreement between the UAE and that other jurisdiction, this agreement will, in general, contain provisions to determine where that Person would be considered as resident. These provisions take precedence over the treatment under the Corporate Tax Law and its implementing decisions.19

In general, Double Taxation Agreements include rules to solve dual residence situations for juridical persons either based on the place of effective management criterion or through the mutual agreement procedure.

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