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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 26

Entitlement to Benefits

(1) Notwithstanding the application of the other Articles of the Convention, with respect to taxation in the Republic of Korea only the following residents of the United Arab Emirates shall be entitled to the benefits of Articles 7, 8, 10 to 14, 19 and 20:

  • (a) the Federal and the local governments of the United Arab Emirates;
  • (b) a government institution of the United Arab Emirates such as Central Bank of the United Arab Emirates, Abu Dhabi Investment Authority, Abu Dhabi Investment Company, International Petroleum Investment Company (IPIC), Dubai Tourism Department, Dubai Investment and Development Corporation;
  • (c) a company provided that such company can prove that at least 75 per cent of its capital is beneficially owned by the United Arab Emirates and/or by a government institution of the United Arab Emirates and give substantial evidence that the remaining capital is beneficially owned by individuals being residents of the United Arab Emirates and that the company is controlled by the aforementioned residents.

(2) Notwithstanding the provisions of paragraph (1), also the following residents of the United Arab Emirates shall be entitled to the benefits of Article 8, 10 and 11:

  • (a) an individual;
  • (b) a company, provided that such company can give substantial evidence that its capital is beneficially owned exclusively by the United Arab Emirates and/or by a government institution of the United Arab Emirates or local governments and/or by individuals being residents of the United Arab Emirates and the company is controlled by
  • the aforementioned residents;

(3) A further prerequisite for relief from Korean taxes under paragraphs (1) and (2) is that the company resident in the United Arab Emirates proves that it was not a principal purpose of the company or of the conduct of its business or of the acquisition or maintenance by it of the shareholding or other property from which the income in question is derived to obtain any of such benefits to the advantage of a person who is not a resident of the United Arab Emirates.

(4) Relief from Korean taxes under paragraphs (1) to (3) is conditional on confirmation by the competent authority of the United Arab Emirates that the prerequisite mentioned in paragraphs (1) and (2) have been fulfilled. If the authorities of the Republic of Korea have evidence which casts doubt on the statements which have been made by the person to whom the income or capital is allocatable and which have been confirmed by the competent authority of the United Arab Emirates, the latter shall, as far as possible, make fresh inquiries and shall inform the competent authority of the Republic of Korea of the results. In case of disagreement between the competent authorities of the two Contracting States, the procedure under Article 23 shall be applied.

(5) Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention.

(6) Nothing in this Article shall be construed as restricting, in any manner, the application of any provisions of the law of a Contracting State which are designed to prevent the avoidance or evasion of taxes.