Egypt And The Sultanate Of Oman Convention For The  Elimination Of Double Taxation And The Prevention Of Tax Evasion With Respect To Taxes On Income.

In a historic move signalling a new chapter in the economic relationship between Egypt and Oman, Presidential Decree No. 320 of 2024 has been officially approved, paving the way for a landmark Convention aimed at eliminating double taxation on income and combating tax evasion and avoidance that published in the Egyptian Official Gazette, Issue No. 3, on January 16, 2025, this Convention marks a significant milestone in fostering economic growth and providing a clearer, more equitable tax environment for individuals and businesses in both countries.

The Convention, titled “Convention for the Elimination of Double Taxation on Income and the Prevention of Tax Evasion and Avoidance,” was initially signed by the President of Egypt on August 1, 2024, and underwent a thorough review and approval process. Following its endorsement by Egypt’s Council of Ministers, the Convention was ratified by the Egyptian Parliament on October 7, 2024, and formally signed by the President on October 14, 2024, now published in the Official Gazette, the Convention is set to come into effect upon the completion of final formalities in both countries.

KEY PROVISIONS AND SCOPE OF THE CONVENTION:

This historic Convention addresses a broad range of tax issues, providing clarity and stability for cross-border operations between Egypt and Oman, the Convention aims to eliminate the risk of double taxation for individuals and companies engaged in cross-border activities. Some of the key provisions of the Convention include:

FOR EGYPT:

Income taxes on individuals: Covering wages, salaries, income from professional services, and income generated from real estate investments, including agricultural land and furnished properties.

Corporate income tax: Addressing the tax obligations of companies conducting business across borders.

Withholding taxes: Including those levied on income from investments and other cross-border transactions.

FOR OMAN:

Income tax as outlined in Omani tax laws, ensuring the equitable treatment of individuals and businesses within Oman’s jurisdiction.

This Convention also extends to any future taxes that may be imposed by either country that are similar in nature to those covered by the Convention, ensuring long-term applicability and adaptability.

STRATEGIC OBJECTIVES AND BENEFITS:

The Convention between Egypt and Oman is designed to achieve several strategic goals:

1. Elimination of Double Taxation: The primary objective is to ensure that individuals and businesses are not taxed twice on the same income, reducing financial burdens and providing a more predictable tax environment for cross-border trade and investment.

2. Combating Tax Evasion: By fostering greater transparency and cooperation between Egypt and Oman’s tax authorities, the Convention aims to address tax evasion and ensure that all tax liabilities are met in full.

3. Preventing Treaty Shopping: The Convention includes provisions to prevent “treaty shopping,” ensuring that tax benefits are only available to those who are genuinely entitled to them under the Convention. This prevents third-party residents from misusing the Convention’s provisions to exploit tax advantages unfairly.

LEGAL FRAMEWORK AND IMPLEMENTATION:

The Convention adheres to Article 151 of the Egyptian Constitution, which governs Egypt’s authority to enter into international agreements, following the approval by the President of Egypt, the Convention was officially published in the Official Gazette, ensuring its legitimacy, the Egyptian Ministry of Foreign Affairs played a crucial role in overseeing the Convention’s ratification process.

SIGNIFICANCE FOR BILATERAL ECONOMIC RELATIONS:

This Convention holds profound implications for the economic relations between Egypt and Oman. By eliminating the possibility of double taxation, it opens the door for increased investment and trade, allowing businesses to operate more efficiently across both countries, it is a vital step toward creating a more competitive and transparent tax environment, which will undoubtedly foster greater business confidence and growth in both nations.

The Convention also signals both countries’ commitment to aligning their tax systems with international standards, reinforcing their positions as global economic players, it is expected to drive more cross-border cooperation in various sectors, including trade, finance, and technology, benefiting both Egypt and Oman economically.

CONCLUSION:

The signing of the tax Convention between Egypt and Oman is a momentous occasion that will have long-lasting benefits for both nations, the Convention not only eliminates double taxation and combats tax evasion but also lays the foundation for stronger economic and trade relations, this forward-looking Convention demonstrates the commitment of both Egypt and Oman to fostering a transparent, fair, and business-friendly environment for their citizens and companies.

As global economic challenges evolve, the Convention between Egypt and Oman stands as an exemplary model of how international tax agreements can address complex issues while supporting economic growth and cooperation.

SOURCE: 

• Egyptian Official Gazette – Issue No. 3, January 16, 2025