How can businesses in the UAE benefit from the KSA-UAE Double Tax Treaty?

There are many businesses in the UAE that provide services and deal with offshore clients. Some of the businesses can avail the double tax benefits with the clients of the countries with which the UAE has the DTT, or Double Tax Treaty. KSA is one of the nations with which UAE has the DTT, and hence the businesses in UAE that deal with the clients or customers from KSA can get the tax benefits if they are eligible and comply with the requirements. In this blog you will get to know the requirements and all about the application form Q7B and the submission procedure to avail the benefits. Via this form, the businesses in the UAE can get the benefits regarding the double taxation.

What is the Form Q7B?

Form Q7B is to be filed by the Saudi entity who may require to take the benefit of the UAE-KSA DTT. The form is to be submitted by the entity that is in the KSA, which may make the payments to the non-resident entity, which would be a UAE entity as per the scenario. The form is mandatory to be submitted for getting the benefits from the DTT.

What is the Procedure to be Followed for Submission of the Form Q7B?

The procedures that are to be followed include:

1. The form must be filled as per the guidance of the Saudi resident taxpayer.
2. The entity must apply for the TRC (Tax Residency Certificate) and simultaneously must apply for the FTA to stamp on the form.
3. The form must also be stamped by the MOFA and attested thereby.
4. The attested form must be submitted to the Saudi Embassy in the UAE.
5. Then the certified Q7B form must be submitted to ZATCA.

You can also read: All About Tax Residency in UAE Under Double Taxation Agreements

What are the benefits of the UAE-KSA DTT?

There are multiple benefits of the UAE-KSA DTT. The businesses operating in both locations can get the tax benefits out of the agreement. Some of the major benefits include the following:

1. Protection against double taxation

The agreement would protect the business entities from getting taxed on the same income in both countries. Hence, the tax would be payable in only one country, thereby ensuring proper cash-flow management of the companies.

2. Avoiding tax evasion by the entities

The tax authorities of the respective locations can ensure that there is no tax evasion and a proper tax framework is followed, thereby ensuring transparency.

3. Transparency between 2 countries

Both the countries can have the insights about the tax policies of each other's country and can maintain the transparency, thereby reducing any risks of misunderstanding and incomplete information.

How to Overcome the Complexities of Double Tax Treaties?

In order to avail themselves of the benefit of the UAE-KSA DTT, the taxable entities must be aware of the following points:

• The form Q7B must be accurately and properly filled and submitted within the stipulated timeline.
• All necessary documents must be prepared and kept while availing the benefits. These documents must be as per the instructions of the authorities.
• The entities can avail the guidance of professional tax consultants like CDA in order to ensure effective and efficient business operations between the UAE and KSA.
• The business entities must ensure compliance with all the tax rules and regulations and must also stay updated with the new amendments.

How Can CDA Assist in Availing the DTT Benefits?

CDA’s dedicated team of tax experts has been providing the entities with multiple tax guidance and assistance. The businesses in need of the assistance regarding the DTT can approach the experts to get more insights about the DTT rules and regulations and also regarding the UAE’s tax treaties with other countries. The entities can avail themselves of the benefits with the professional assistance and can also ensure the compliance with the rules and regulations of other countries. With the assistance of our experts, you can avail yourself of all the applicable tax benefits.

To explore more about the tax-related services, connect with our team now!

Mitesh Maithia

Tax Manager

Mitesh is a Tax Professional with expertise in direct, indirect, and international taxation, including transfer pricing, since 2018. Passionate about making complex tax matters simple, he shares insights to help businesses stay compliant and forward-looking.