UAE and Austria sign agreement on avoidance of double taxation

As part of its endeavours to strengthen cooperation frameworks in tax matters, protect taxpayers from double taxation, and avoid impeding the flow of trade and investment, the Ministry of Finance (MoF) signed a protocol to amend the agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion with respect to taxes on income with Austria. The agreement was previously signed between the UAE Government and Austria in September 2003.

Obaid Humaid Al Tayer, Minister of State for Financial Affairs, signed the agreement on behalf of the UAE, while Austrian Finance Minister Gernot Bluemel, signed it on behalf of Austria. The signing took place on Thursday, in the presence of Dr Andreas Liebmann, Ambassador of the Republic of Austria to the United Arab Emirates; Abdullah Ahmed Al Obaidly, Director of Relations and International Financial Organisations at MoF; and officials from both parties.

Obaid Al Tayer stressed on the importance of consolidating the financial, economic and investment relations between the UAE and Austria, in order to support the common interests of both countries. His Excellency said: “The UAE will continue to strengthen joint cooperation in all fields that benefit the peoples of both countries and enhance the comprehensive and sustainable development process. The signing of this protocol boosts the bilateral economic relations between the UAE and Austria in tax matters.” Through this protocol, both parties aim to avoid double taxation with respect to taxes on income, without creating opportunities for non-compliance with the tax system or reduced tax through tax evasion or avoidance.

During the meeting, both parties deliberated means of bolstering bilateral relations between both countries and enhancing joint cooperation in various fields, and exchanged views on several international issues of common interest.

The UAE recently participated in the G20 Finance Track’s second Global Partnership for Financial Inclusion (GPFI) meeting, which took place virtually. The meeting discussed the COVID-19 repercussions on remittances, future developments and possible solutions to existing challenges for cross-border payments and remittances, digital financial solutions to promote resilience and financial literacy, and Micro, Small & Medium Enterprises (MSMEs) financing and digital financial inclusion.

Mariam Al Hajri, General Budget Deputy Manager at Ministry of Finance; along with Thuraya Al Hashemi, Projects Manager at Ministry of Finance, represented the UAE G20 team participating in the meeting. G20 members and invited countries, non-G20 GPFI invited members, representatives of international organisations and the GPFI’s affiliated partners attended the meeting, which was held under the Italian presidency of the G20 this year.

During the meeting, the UAE G20 team reviewed the UAE’s global competitiveness in low-cost remittances which is one of the important goals of the G20 and the 2030 Sustainable Development Goals.

The team also reviewed the country’s second place global ranking on the list of exporters of remittances, noting that what the UAE has been able to achieve in this area is due to advanced digital infrastructure and interconnected payment networks available in the nation’s financial sector. The UAE also called for greater global collaboration on exploring the use of stablecoins and blockchain networks to enable faster, cheaper and more secure transactions.

The UAE also pointed to the importance of maintaining flexible legislative systems for consumer protection in order to facilitate the provision of new financial channels capable of reaching people outside the financial system in developing countries, as well as accelerating innovation in the field of financial technology. Additionally, the UAE stressed the need to build effective partnerships with the private sector, because of their positive impact on enhancing financial flexibility and raising the level of digital financial inclusion alike.

At the end of the meeting, the attendees reviewed the progress made on the reports that are being prepared by the GPFI this year, with an agreement to continue providing support until the reports are completed. Also, the members agreed to continue to provide support as the reports progress. The final version of the GPFI reports are planned to be delivered before the third and final GPFI meeting of the year on the 4th of October 2021.

The UAE, represented by the Ministry of Finance (MoF), also recently participated in the first meeting of the Finance and Investment Committee of the Saudi-Emirati Coordination Council, which took place virtually.

The meeting sought to follow up on strategic initiatives in various fields, including financial services and markets, support for entrepreneurship, customs cooperation and common markets, along with tourism and national heritage - in addition to the mechanisms for their implementation, in accordance with the approved plans.