UAE and Tanzania Sign Tax Treaty

On 29th September 2022, the Ministry of Finance of the United Arab Emirates (UAE) signed a Double Taxation Avoidance Agreement with Tanzania.

The signing ceremony took place in Dubai, where H.E. Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs of the UAE, and H.E. Dr. Mwigulu Lameck Nchemba, Minister of Finance and Planning of Tanzania, signed the agreement.

On the Twitter account of the Ministry of Finance of Dubai, Mohamed bin Hadi Al Hussaini wrote: “The Ministry of Finance signed an agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion with respect to taxes on income with Tanzania, as part of efforts to strengthen cooperation in tax matters, protect taxpayers from double taxation, and avoid impeding the flow of trade and investment. The Ministry will continue to strengthen trade and investment ties with all its trade partners. This is by devising mechanisms that explain to investors the financial status of their operations in commercial, economic, financial, and any other activities in countries with which the UAE has active economic relations.”

For his part, Dr. Nchemba said in the statement: “It is our hope that after this agreement, we will see the growth of investments from Arab countries that have always had the means but were hindered by double taxation issues. Tanzanian business persons will also be able to do business more smoothly now than before and thus increase economic growth.”

A Double Tax Avoidance Agreement (DTAA) is a tax treaty signed between two or more countries to avoid taxpayers paying double taxes on the same income.

A DTAA becomes applicable in cases where an individual is a resident of one nation, but earns income in another.

Under a DTAA, any tax paid in the country of residence will be exempt in the country in which it arises.

A DTAA clarifies and harmonizes the applicable cross-border rules on taxation, minimizing the risk of double taxation.

It also protects investors from unfair and discriminatory treatment and state actions that can amount to expropriation, which may also apply to tax matters.

Until now, Tanzania had only nine double taxation agreements in place with Canada, Denmark, Finland, India, Italy, Norway, South Africa, Sweden, and Zambia.

However, the UAE concluded 137 DTAAs to date with most of its trade partners.

In Sub-Saharan Africa, it has treaties in place with Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Chad, DRC Congo, Equatorial Guinea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea- Bissau, Ivory Coast, Kenya, Liberia, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Sierra Leone, South Sudan, Sudan, Uganda, Zambia, and Zimbabwe.