Nigeria announced it has signed a double taxation treaty on Trade, Finance and Judicial Matters with the United Arab Emirates. The treaty also includes Avoidance of Double Taxation; Trade Promotion and Protection; Judicial Agreements on Extradition, Transfer of Sentenced Persons; Mutual Legal Assistance on Criminal Matters; and Mutual Legal Assistance on Criminal and Commercial Matters, which includes the recovery and repatriation of stolen wealth.
It is not clear how Nigeria intends to benefit from this because the United Arab Emirates does not have an income tax law. Thus how Nigeria intends to benefit from this in the near to medium term treaty is quite unclear.
The National Assembly will still be required to ratify this treaty before it becomes law.
“It is not clear how Nigeria intends to benefit from this because the United Arab Emirates does not have an income tax law. Thus how Nigeria intends to benefit from this in the near to medium term treaty is quite unclear”.
Regarding your statement above, Nigerian companies may benefit from this treaty if they are shareholders in UAE companies or have a branch in UAE. I believe dividends received from overseas are taxed in Nigeria and vice versa in form of withholding tax. Accordingly double taxation treaties are aimed at UAE a more attractive territory in which to operate by reducing taxation levied in the foreign jurisdiction on profits remitted abroad by foreign corporations operating in UAE.
UAE has Double Taxation treaties with over 66 countries and all these countries benefit from it. I believe the same should be with Nigeria as well.
Thanks