The UAE has signed the final agreement for the avoidance of double taxation on income with the Republic of Hungary.

The agreement was signed by Obaid Humaid Al Tayer, Minister of State for Financial Affairs on behalf of the UAE and Peter Szijjártó, State Secretary for Foreign Affairs and External Economic Relations in the Prime Minister of the Republic of Hungary’s Office.

The agreement will contribute in strengthening economic relations between the UAE and the Republic of Hungary along with achieving an economic balance between the two countries.

The agreement will provide full protection for concerned parties from double taxation, whether direct or indirect. It will also help in avoiding the obstruction of free flow of trade and investments between the two countries, which will contribute to the promotion of their respective development goals, as well as in diversifying the sources of national income and increasing the volume of foreign investments for both states.

In addition, the agreement takes into account tax matters and notable changes taking place in the international economic, financial and tax fields in terms of new financial instruments and pricing transfer mechanisms.

The agreement will also contribute to the removal of most forms of economic double taxation while reducing some taxes that could be imposed on foreign investors. Moreover, it will provide a package of normative acts to divide tax profits between countries.

This agreement will help in facing tax evasion in addition to creating a framework for resolving tax disputes and will provide a stable environment for foreign investors, thereby increasing the international competitiveness of the local economy of both countries.

Al Tayer said: “This agreement will aid in achieving economical balance between the UAE and Hungary, as it is considered to be an important legal mechanism to push forward investments between both states.”

“This is especially true since the agreement provides tax-related privileges for state-owned investments and for the private sector as well, in addition to providing tax exemption for air transport activities.

“The document also identified a number of entities that would receive tax exemptions, which include the Abu Dhabi Investment Authority, Investment Corporation of Dubai, and pension funds,” he added. – TradeArabia News Service