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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
The details of the long-awaited double tax treaty between the UAE and the KSA (the “DTT”), which was signed on 23 May 2018, have finally been made available.
The decision approving the DTT in KSA was recently published in the official Saudi Gazette, Umm Al-Qura, together with the text of the DTT. The publication of the decision in the official Gazette completes the ratification process for KSA. Both countries are required to notify the other of the completion of the procedures required by their law to bring into force the DTT.
The main features of the treaty are as follows:
The DTT is the first of its kind between two Gulf Cooperation Council member countries and will enhance the economic relations and bilateral cooperation between the KSA and the UAE.
Once effective, the DTT will have significant tax implications. The conclusion of the DTT may impact the existence of a PE and have the effect of reducing the withholding tax rate in the KSA. Businesses and persons with cross-border transactions should review their transactions and corporate structures as soon as possible to ensure that they are eligible for treaty benefits.
Given that both the KSA and the UAE are signatories to the MLI, it is important to note that the provisions of the DTT may be amended by the MLI depending on the final MLI positions adopted by the KSA and the UAE. Currently the KSA in its provisional MLI positions has already included the DTT as a covered agreement whereas the UAE has not yet included the DTT as such.
As the largest law firm in the Middle East with strong tax expertise, Al Tamimi & Company is well placed to advise you on the tax implications arising as a result of the application of the DTT including whether you qualify for treaty benefits.
We can also liaise with the tax authorities on your behalf to clarify their interpretation of the DTT and assist with the obtaining of tax residency certificates.
Please do not hesitate to contact Al Tamimi’s Tax Team if you require any assistance.
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