Israel and the United Arab Emirates signed a tax treaty Monday, Israel’s Finance Ministry said, according to Reuters. Meanwhile, the Arab Gulf country has reportedly refused to help rebuild Gaza under the pretext of presence of Hamas.
The Israeli Finance Ministry described the move as a spur to business development between the countries after they normalized relations last year.
The UAE finance ministry said in October that it had reached a preliminary agreement with Israel on avoiding double taxation.
The tax convention, once ratified by ministers and parliament this year, will be Israel’s 59th and go into effect on Jan. 1, 2022.
It is the first tax treaty reached in the wake of Israel’s normalizing relations with the UAE and Bahrain last year. In parallel, Israel has moved to improve ties with Morocco and Sudan.
The treaty is based primarily on the OECD model, Israeli Finance Minister Israel Katz said in a statement, adding that it “provides certainty and favorable conditions for business activity and will strengthen economic ties” with the UAE.
Under the agreement, tax deductions, dividends and royalties are capped.
Israeli Foreign Minister Gabi Ashkenazi said the treaty will enable significant promotion of investment and trade that will help both countries’ economies.
Since a normalization deal was signed last September, Israeli and Emirati banks and other companies have signed cooperation deals, while also establishing direct flights.
UAE refuses to help rebuild Gaza
The United Arab Emirates (UAE) has reportedly refused to help rebuild the Gaza Strip under Hamas auspices, according to Israel’s Kan channel.
“US officials have in recent days visited the UAE to coordinate efforts to rebuild Gaza, but Abu Dhabi conveyed a clear message to Washington that it would provide direct humanitarian support to Gaza, but it will not finance any such mechanism if Hamas has a role in it,” Israel’s national broadcaster reported.
On 10 May, Israel launched a violent onslaught on the besieged Gaza Strip killing more than 270 Palestinians including 66 children. A ceasefire came into effect 11-days later.
Egypt is reported to have called on Israel, Hamas and the Palestinian Authority (PA) to meet in Cairo to discuss consolidating the current ceasefire, improving conditions in Gaza, and returning Israeli prisoners of war detained by Hamas.
Israel has stipulated that it wants all four of its detained citizens to be returned before any rebuilding programs are allowed to begin in the Gaza Strip.