November 13, 2024

International Agreements between Georgia and the UAE: Trade, Taxation, and Investment Prospects

Georgia and the United Arab Emirates (UAE) are strengthening their economic ties by entering into several strategically important agreements aimed at easing tax burdens, promoting trade, and increasing investment.

Double Taxation Avoidance Agreement (DTA)

The signed Double Taxation Avoidance Agreement provides key tax benefits for airlines involved in transportation between Georgia and the UAE, exempting them from taxes on profits and income from service provision. Airlines such as Emirates and Etihad now benefit from simplified conditions, enhancing the accessibility and attractiveness of the Georgian market for business operators from the UAE. Government entities and private organizations registered in the UAE are exempt from taxation on interest income earned in Georgia, such as interest on loans extended to Georgian companies or banks. Under normal conditions, this income would be taxed at a rate of 10%. According to the DTA provisions, business profits earned in one country are taxed only in that country, provided the company has no permanent establishment in the other country. This is important for companies engaged in temporary or project-based work.

Comprehensive Economic Partnership Agreement (CEPA)

With the signing of the Comprehensive Economic Partnership Agreement, Georgia and the UAE aim to triple the volume of non-oil trade to $1.5 billion over the next five years. CEPA also grants access to the UAE's 10-million-strong consumer market by reducing or eliminating tariffs on more than 95% of goods. These measures remove barriers to exporting Georgian products such as mineral water, honey, textiles, and nuts to the UAE market, enhancing the competitiveness of Georgian producers and opening up additional trade opportunities.

Energy Cooperation

The countries are also actively developing cooperation in the energy sector. In 2023, an agreement was signed between the Georgian Energy Development Fund and the UAE's state-owned company "Masdar" to establish the largest solar power plant in the Kvemo Kartli region. This project marks a significant step toward diversifying Georgia's energy sources and reducing energy dependence.

These agreements form an essential foundation for the further deepening of economic cooperation between Georgia and the UAE, strengthening trade relations, and creating new investment opportunities for companies from both countries.