In this article, we will discuss about...
Introduction:
Hey there! Remember when we talked about the DTAA between the USA and India? Well, today, let’s take a closer look at the DTAA between India and the UAE. If you’re an Indian citizen living in the UAE, whether as a resident or on a visa, and you’re thinking about selling property or exploring other income options, this discussion is just for you.
Don’t let reading hold you back, Watch our video instead
Understanding Taxes in the UAE:
Before we delve into the details, let’s clear up a common misunderstanding. While some people see the UAE as a tax-free haven, the truth is a bit different. Sure, there aren’t any individual taxes in place right now, but things could change. Recent developments, like the introduction of FAT and corporate taxes, suggest that. Enter the Organization for Economic Co-operation and Development (OECD), an international group pushing for fair tax rules worldwide. They’re suggesting a minimum 15% tax rate to stop tax evasion tricks like moving assets to low-tax countries.
Demystifying the OECD:
So, what’s the deal with the Organization for Economic Co-operation and Development (OECD)? It’s basically all about getting countries to agree on a fair way to tax practices. The goal? Making sure no country becomes a tax paradise while others get the short end of the stick. With that 15% tax rate idea, the OECD aims to level the playing field and put a stop to disapproved tax evasion.
Implications for the UAE:
As the OECD’s ideas move forward, the UAE might have to start charging a minimum 15% tax on income from selling assets outside the country. That could affect a lot of people, including NRIs thinking about selling property.
Consult CA Arun Tiwari for more information at 8080088288 or cs@aktassociates.com
Navigating Property Sales:
Let’s say you’re an NRI in the UAE selling property in India. According to the DTAA, India gets to tax those sales. But with the possible 15% tax coming in, the burden might shift, possibly saving you from getting taxed twice.
Understanding Other Income:
The same goes for other sources of income, like interest or dividends. Right now, India taxes those based on different rates. But with changes, it might be time to start thinking about how to manage your money.
Addressing Double Taxation Worries:
Worried about getting taxed twice? Don’t be. The taxes taken out at the source, like the 20% TDS on property sales, aren’t extra taxes. You can adjust them when you file your taxes in India, making sure you’re not paying more than you should.
Looking Forward:
The details of the DTAA’s tax rules depend on various factors, like what the OECD decides and talks between countries. Being smart with your money is always a good move. Whether you’re thinking about selling property or dealing with different income sources, keeping up with tax changes is super important.
Conclusion:
In conclusion, even though the tax landscape in the UAE seems pretty good right now, things might change soon. With global tax standards on the move, it’s important to be ready. By understanding how the India-UAE DTAA works and what it might mean for you, you can stay ahead of the game when it comes to taxes.