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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 21

Elimination of Double Taxation

(1) In the case of Korea, double taxation shall be avoided as follows:

Subject to the provisions of Korean tax law regarding the allowance as credit against Korean tax of tax payable in any country other than Korea (which shall not affect the general principle hereof):

  • (a) where a resident of Korea derives income from the United Arab Emirates which may be taxed in the United Arab Emirates under the laws of the United Arab Emirates in accordance with the provisions of this Convention, in respect of that income, the amount of the United Arab Emirates tax payable shall be allowed as a credit against the Korean tax payable imposed on that resident. The amount of credit shall not, however, exceed that part of Korean tax as computed before the credit is given, which is appropriate to that income;
  • (b) where the income derived from the United Arab Emirates is dividends paid by a company which is a resident of the United Arab Emirates to a company which is a resident of Korea which owns at least 25 per cent of the voting shares issued by or the capital stock of the company paying the dividends, the credit shall take into account the United Arab Emirates tax payable by the company in respect of the profits out of which such dividends are paid.

(2) In the case of the United Arab Emirates, double taxation shall be avoided as follows:

  • (a) where a resident of the United Arab Emirates derives income which, in accordance with the provisions of this Convention, may be taxed in Korea, the United Arab Emirates shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Korea. Such deduction in either case shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Korea;
  • (b) where in accordance with any provision of the Convention income derived by a resident of the United Arab Emirates is exempt from tax in the United Arab Emirates, the United Arab Emirates may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.