Double Taxation Agreement Between UAE & United States Of America

Overview

As of 2025, the United Arab Emirates has not yet signed a double taxation agreement with the United States, but the two countries maintain strong economic ties through bilateral investment treaties. The absence of a double taxation agreement is largely because the UAE’s free zones, where full foreign ownership of companies is permitted, do not impose personal income or corporate taxes. Dubai, in particular, does not levy taxes on income earned by foreign investors. Nevertheless, Dubai has signed various double taxation treaties to enhance its appeal to foreign entrepreneurs. These agreements aim to reduce withholding taxes in the home countries of foreign companies operating in the UAE.

Double taxation Agreement – Decrees – UAE & USA

‘Decrees’ Although there is no double tax treaty between the UAE and the US, the UAE government has implemented several tax regulations that address the taxation of foreign nationals living, working, or owning businesses in the country. Each tax authority within the Emirates imposes an income tax of up to 50% on the taxable income of companies, regardless of their country of incorporation. However, this tax applies primarily to oil-exporting companies and foreign banks. It is important to note that the tax rate can vary, as it is determined through agreements between the company and the relevant Emirate’s tax authorities, making it personalized.

FATC Over DTAs Between UAE & USA

Foreign Account Tax Compliance – FATC is an initiative by the U.S. to combat tax evasion by U.S. taxpayers holding financial assets outside the country. The UAE has agreed to comply with FATCA through an intergovernmental agreement (IGA) with the United States. Under this agreement, UAE financial institutions are required to identify and report accounts held by U.S. persons to the U.S. Internal Revenue Service (IRS). The goal is to improve transparency and ensure that U.S. taxpayers are complying with tax obligations on foreign financial assets. In exchange, the UAE benefits from the ability to receive financial information from U.S. institutions to assist in its tax enforcement.

Key Takeaways

Unlike countries like Germany, Switzerland, India, the UK, Singapore, and more USA hasn’t signed any Double Taxation Agreement with UAE. Alternatively, these two countries have a concept called ‘FATC – Foreign Account Tax Compliance’ in which the UAE officials provide the account information of US individuals working or setting up a business there. In exchange, the UAE will also get financial reports of the individuals and past track records. To get a clear picture of DTA and FATC contact our experts at Arnifi.

Also Read: https://arnifi.com/blog/double-taxation-agreement-between-uae-germany/