To gain a fundamental understanding of the special taxation features in Arabic countries, it is important to first highlight several essential differences to German tax law. Firstly it needs to be recognized that there is no “Arabic tax law”, but rather that each Arabic country recognizes its own tax law.

• The essential characteristics of the taxation systems in the Arabic countries are: Differentiation occurs according to the citizenship and religion of the tax subject; nationals are taxed differently to foreigners, whereby members of another Arabic country may experience special treatment. Moslems in Saudi Arabia and Kuwait pay “Zakat” and consequently are excluded from income taxation.
  
• The taxation systems are less complex when compared to German tax law.
  
• In many Arabic countries, foreigners are generally only present in limited numbers on account of the legal forms offered by the respective national companies law. The taxation fundamentals for foreigners are therefore concentrated on the limited number of legal forms of economic participation.
• In contrast to German tax law, the principle of formal justice, which guarantees equal treatment and legal surety, is of less significance. The taxation standards are characterized more by considerations of suitability and practicability.
  

For more information about the taxation systems of Arabic countries, including the double taxation agreement, feel free to contact us at any time.