Abu Dhabi: The second round of negotiations between the UAE and Libya concerning double taxation avoidance on income concluded with an initial agreement at Abu Dhabi yesterday.
As part of the Ministry of Finance's efforts to enhance UAE's international financial relationships, the initial agreement was signed by Khalid Ali Al Bustani, Executive Director of International Financial Relations Sector at UAE Ministry of Finance and Al Mahdi Hassan Al Warshfany, Deputy Director General of the Libyan Tax Authority.
Younus Haji Al Khoury, Director-General of the Ministry of Finance praised the effort made by the ministry's team to conclude the negotiations.
He confirmed that the agreement aims to strengthen cooperation and partnership between UAE and Libya and avoid double taxation — not imposing tax more than once on the same profits for individuals and business. It also facilitates capital and investment transfer between the two countries.
The process harmonises financial principles and standards applied at both, the origin and destination country for investors. The initial agreement confirms that tax collection will be done in the country of domicile of the investor or business.
The initial agreement has a sizeable and effective impact on reducing the financial burden arising from financial or economic double taxation.
The initial agreement provides full protection for taxpayers against both direct and indirect double taxation.
The UAE has already signed 50 agreements with important partners, including nine Arab countries and 41 other countries. Fifteen other initial agreements have also been signed and are being validated.
These agreements under validation will provide many financial advantages and savings to the UAE. For example, national carriers operating in international airspace have achieved significant financial savings.
The UAE's various double taxation agreements have resulted in the Ministry of Finance issuing 1,599 domicile certificates during 2006-09. Of these, 526 domicile certificates were issued to private sector companies, 593 to the public sector companies and sovereign wealth funds, and 480 to individuals residing in the UAE.
