The UAE-Morocco tax treaty

The UAE-Morocco tax treaty, signed in 1999, serves to prevent double taxation and facilitate cross-border economic activities. Here are the key provisions:

Interest Income:

Interest income derived from one country and received by a resident of the other country is subject to taxation in the country where it arises.interest is generally capped at 10%.

The treaty aims to avoid double taxation by allowing the country of residence to provide a credit for taxes paid in the source country.

Dividends and Royalties:

Dividends paid by a Moroccan company to a UAE resident are generally subject to a maximum withholding tax rate of 10%.

Royalties (such as payments for the use of intellectual property) are also subject to a maximum withholding tax rate of 10%.

Capital Gains:

Gains from the sale of shares or other movable property are generally taxable in the country where the seller is a resident.

However, gains from the sale of immovable property (such as real estate) are taxed in the country where the property is located.

Business Profits and Permanent Establishment:

Business profits are generally taxed in the country where the business has a permanent establishment (PE).

The treaty provides guidelines for determining when a PE exists.

International Transportation and Shipping:

Profits from international transportation (such as shipping and air transport) are exempt from taxation in both countries.

Elimination of Double Taxation:

The treaty includes mechanisms to avoid double taxation, such as the credit method or exemption method.

Exchange of Information and Assistance in Collection:

Both countries agree to exchange information to prevent tax evasion.

They also provide assistance in the collection of taxes.