Qatar and Egypt inked a deal on Monday to combat double taxation on income and prevent tax evasion or avoidance, a much anticipated agreement that has been in the talks for months.
The agreement comes as Egypt’s government works to promote both domestic and foreign investments in order to boost economic production, the Cabinet’s spokesperson Nader Saad said.
It also fits into Egypt’s efforts to expand its export market, increase its production capabilities, and draw in both domestic and foreign investors.
The agreement was announced while Prime Minister Mostafa Madbouly met with Qatar’s Amir Sheikh Tamim bin Hamad Al Thani and other top officials on Monday, Bloomberg reported. It covers topics including capital gains, interest, income tax, business earnings, dividends and other relevant matters.
Egypt is relying on investments and support that were promised by Qatar and other Gulf nations last year to ease a foreign exchange crisis sparked by Russia’s invasion of Ukraine. However, only a small portion of the cash has been delivered, reports said.
Meanwhile, Qatar wants to boost its financial involvement in Egypt, the north African country’s cabinet said in a statement, citing the nation’s leader. The prime minister of Qatar stated that the taxation deal will have a “tangible” effect on the growth and promotion of investments from his nation.
Green hydrogen, ports, pharmaceutical manufacture, construction, and real estate were a few of the areas of cooperation that were addressed.
The latest deal comes against the backdrop of a months-long wait as officials from both sides worked to solidify cooperation plans on paper.
Cairo and Doha signed a Memorandum of Understanding (MoU) in June 2022 to expand financial and economic cooperation during the Qatar Economic Forum event.
The MoU, signed between Qatar’s Minister of Finance Ali bin Ahmed Al Kuwari and his Egyptian counterpart “will help [the] two ministries, Finance of Egypt and Qatar, to cooperate further,” Egypt’s Finance Minister Mohamed Maait told Doha News in an exclusive interview at the time.
“And we’re gonna start next month discussions about removal of double taxation between our two countries,” Maait revealed.
Egypt has made huge progress in its infrastructure over the last seven years, with over $400 billion worth of investments “and we have a lot of opportunities and we believe
that with Qatar diversifying its investment,” the economic sector between the two will expand, the minister added.
Separately, the Egyptian government said in March 2022 that Qatar and Egypt had struck investment agreements worth a combined $5 billion in various industries.
“Since last year, there are regular visits to Doha and to Cairo and also there was
an agreement for $5 billion, $3 billion deposited in the Central Bank of Egypt
and $2 billion dollars for investment,” Maait told Doha News.
Qatar and Egypt’s bumpy road
Egypt joined Saudi Arabia, United Arab Emirates and Bahrain to impose an illegal air, land and sea blockade on Qatar in 2017 over allegations that Doha supports terrorism – allegations that were consistently rejected by Qatar.
The embargo had a massive impact across the board, with diplomatic ties broken, imports coming to a halt and nationals of all involved countries bearing the brunt of the political crisis.
However, that all ended in January 2021, when the Al Ula Agreement was signed to restore diplomatic and trade ties between Qatar and the blockading countries.
In June 2022, Qatar’s Amir Sheikh Tamim bin Hamad Al Thani landed in Cairo for the first visit to Egypt since the blockade. The Gulf state’s leader met Egypt’s President Abdel Fattah El Sisi – marking the most apparent and major indicator of the complete restoration of ties between the two states.
However, while relations have appeared to warm, the Sisi regime continues to crackdown on the press, including Al Jazeera’s journalists.
Last week, an Egyptian court renewed the detention of Al Jazeera journalists Hisham Abdelaziz and Bahauddin Ibrahim, extending their imprisonment to three years without being charged, Al Jazeera reported.