Executive summary

On 25 June 2026, Qatar published in the Official Gazette Amiri Decree No. (39) of 2026 dated 11 June 2026 on the ratification of the Agreement between the Government of the State of Qatar and the Government of the United Arab Emirates (UAE) for the Avoidance of Double Taxation with respect to Taxes on Income and for the Prevention of Tax Evasion and Avoidance (DTT). The UAE ratified the DTT on 28 April 2025 via Federal Decree No. 39/2025.

The DTT is aimed at enhancing economic cooperation between the two countries, reducing double taxation, and fostering a transparent and predictable tax environment for bilateral investment by businesses and individuals in both countries.

Under Article 29 of the DTT, each Contracting State must notify the other in writing, through diplomatic channels, of the completion of their domestic ratification procedures required for entry into force. The DTT will enter into force on the date of receipt of the latter of these notifications.

Once the DTT enters into force, its provisions on withholding tax (WHT) will apply to amounts paid or credited on or after 1 January of the year following the date of entry into force. The DTT will apply to other taxes on income and capital for tax years beginning on or after 1 January of the year following entry into force.

Highlights of the DTT

Scope

The DTT applies to Qatar and the UAE, including their exclusive economic zones and continental shelves.

Taxes covered

The DTT applies to income taxes imposed by a Contracting State and levied on gross income or on elements of income, including taxes on gains resulting from the alienation of ownership of movable or immovable property, and taxes on the total wages or salaries paid by enterprises.

The current taxes to which the agreement applies are as follows:

• In the UAE:
• Income tax
• Corporate income tax
• In Qatar:
• Taxes on income

Residence criteria

For the purposes of the DTT, a resident is any person who is liable for tax in a jurisdiction by reason of domicile, residence, place of incorporation, place of management or similar criteria. The definition also includes the state, any entity directly or indirectly owned by the state or its governmental body, pension funds and qualifying nonprofit organizations, and excludes persons taxed only on income sourced in the state.

The DTT provides a tiebreaker rule for dual residence in individuals, considering an individual's: (1) permanent home, (2) center of "vital" interests, (3) habitual abode and (4) nationality, along with (5) mutual agreement by competent authorities.

For legal entities with dual residence — the dual residence may be eliminated through a mutual agreement between the competent authorities of the Contracting States.

Permanent establishment (PE)

The PE definition mostly aligns with the standards of the Organisation for Economic Co-operation and Development (OECD). It includes detailed descriptions for fixed-place PE, construction PE (if activities exceed 183 days), service PE (if services continue for more than nine months (270 days) in the relevant tax year) and dependent-agent PE. The DTT also lists the preparatory and auxiliary activities excluded from creating a PE.

Business profits

Business profits shall be taxable only in the state where an enterprise is resident, unless the income is attributable to a PE in the other jurisdiction. The PE's profits should be determined on the basis that it is a separate and independent business from its head office.

Income from immovable property

Income derived from immovable property may be taxable in the Contracting State where the property is located.

Income from international transportation

International transportation income is taxable only in the Contracting State of which the enterprise is a resident. It may include income from the leasing or chartering of ships and aircrafts.

DTT WHT rates

Dividends and interest are taxable only in the recipient's state of residence, while royalties and technical service fees may also be taxed in the source state at a rate not exceeding 3%.

DTT WHT rates apply only if the recipient is the beneficial owner and the payment is at arm's length. Any excess payment due to special relationships is taxed under domestic WHT provisions.

Domestic procedures with respect to claiming DTT WHT relief should continue to be followed.

Capital gains

Gains from the alienation of immovable property in the other Contracting State may be taxed in that state.

Gains from the alienation of movable property forming part of a PE situated in the other Contracting State may be taxed in that state. This includes gains from the disposal of the PE itself (separately or together with the entire enterprise).

Gains from the sale of ships or aircraft operated in international traffic, or movable property related to such operation, are taxable only in the Contracting State where the enterprise's place of effective management is located.

Gains arising from disposal of shares deriving more than 50% of their value, directly or indirectly, from immovable property situated in the other Contracting State may be taxed in that state, unless the shares are listed on a recognized stock exchange.

The taxing rights on assets other than those outlined above are allocated to the jurisdiction where the alienator is a resident.

Other income

Income not covered in other parts of the DTT should be taxable only in the jurisdiction where the recipient is a resident.

Government investments

The DTT contains clear provisions for both Qatar and the UAE with respect to government investments. Investments of a Contracting State in the other Contracting State and the respective income or gains derived shall be taxable only in the first-mentioned state. This provision does not apply to income from immovable property or gains arising from the disposal of immovable property.

Elimination of double taxation

If a resident of one Contracting State is taxed on income or capital in the other state, the residence state allows a credit for foreign tax paid, up to its own tax on that income or capital.

This credit may include foreign tax that is reduced or exempted under the residence state domestic incentives or investment promotion laws.

Exchange of Information

The DTT includes an Exchange of Information article broadly aligned with international standards, allowing the competent authorities to exchange foreseeably relevant information for administering, enforcing and collecting taxes covered by the DTT and certain domestic tax laws. It also covers confidentiality and information held by financial institutions.

Nondiscrimination provisions

The DTT contains nondiscrimination provisions intended to ensure that nationals, PEs and enterprises owned by residents of the other Contracting State are not subject to taxation or related requirements that are heavier than those imposed on comparable domestic taxpayers in similar circumstances.

Mutual Agreement Procedure

Taxpayers may present cases of double taxation to the competent authorities of either state, which must seek to resolve the issue through mutual agreement. Taxpayers should present the case within three years of the first notice of the action that led to the imposition of tax contrary to the provisions of the DTT.

Entitlement to benefits

Benefits under the DTT may be denied if obtaining the benefits was one of the principal purposes of an arrangement or transaction.

Implications

Businesses in Qatar and the UAE should review their operating models in light of the new DTT to determine its impact on their operations and investments.