🇦🇪 India–United Arab Emirates DTAA
India–United Arab Emirates tax treaty
Signed 1992 · notified 1993 (amended 2007, 2012). A practitioner's reference, not legal advice — confirm positions against current text and protocols before acting.
Highlights
- ·Popular routing jurisdiction; tightened by 2012 protocol + GAAR
- ·TRC from UAE authority mandatory; substance increasingly tested
- ·9% UAE corporate tax (effective 2023) changes the planning calculus
Withholding rates
| Income | Treaty rate | Domestic rate | Note |
|---|---|---|---|
| Dividends | 10% | 20% | — |
| Interest | 12.5% | 20% | 5% if bank / financial institution |
| Royalties / FTS | 10% | 10% | — |
| Capital gains (shares) | Per domestic law | Per s.111A / 112A | Post-2017 — India taxing right preserved |
Treaty rate available only on furnishing TRC, Form 10F and beneficial-owner declaration. PPT / GAAR / LOB tests may further restrict access.
Permanent establishment
Fixed place; building / installation site > 9 months.
Residency tie-breaker
Permanent home → COVI → habitual abode → competent-authority MAP.
FTC mechanism
India: Form 67 credit (rare given UAE 0%/9% rate). UAE: pre-2023 historically nil.
Common use cases
- ✓NRIs working in UAE — 0% UAE personal tax, India taxation depends on residency days
- ✓Indian companies with UAE free-zone subsidiary — substance test critical
- ✓UAE resident receiving Indian dividend / rental income
Pitfalls we see
- !TRC alone is not sufficient — GAAR + substance scrutiny
- !Indirect transfer rules (Vodafone) still apply
- !9% UAE corporate tax may erode treaty arbitrage benefit
Have an India–United Arab Emirates fact pattern?
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