Russia disclosed the main terms of double taxation avoidance agreement with UAE

The signing of the document is scheduled for the first half of 2025

The Double Taxation Avoidance Agreement between Russia and the United Arab Emirates (UAE) provides for a 10% rate on income from dividends, interest and royalties. Alexei Sazanov, State Secretary of the Deputy Minister of Finance of Russia, who participated in initialing (i.e. preliminary approval) of the agreement from the Russian side, told Vedomosti.

The agreement with the UAE will have «fairly standard» terms, he noted. According to him, the main subject of discussion was the size of withholding tax rates on passive income. The long period of negotiations (the Russian side sent a proposal to start negotiations back in 2022) is related to the UAE’s position on the terms proposed by Russia, Sazanov added.

«When they [the UAE] expressed their desire to agree and sign the agreement, everything started to move,» he said. The signing of the document is scheduled for the «first half» of this year, according to Sazanov.

On 17th of January the UAE, represented by the Ministry of Finance, has completed the final round of negotiations regarding the Double Taxation Avoidance Agreement on income and capital with the Russian Federation. This highlights the UAE’s dedication to enhancing economic and tax cooperation, creating a business-friendly atmosphere that safeguards taxpayers’ rights, prevents double taxation, and encourages investment along with the smooth flow of trade.

The negotiations took place at the Ministry’s offices in Dubai and concluded with the initial signing of the draft agreement. The purpose of this agreement is to establish a stable and investment-friendly tax framework, eliminate tax barriers that could impede investors, and prevent double taxation for both individuals and businesses.

The Ministry of Finance pf Russia began reviewing double taxation agreements with friendly countries in 2022. In August 2023, Russian President Vladimir Putin signed a decree freezing SIDNs with 38 countries. The list includes almost all EU countries (except Estonia and Latvia), the USA, the UK, Switzerland, Singapore, Japan, South Korea, Australia and others. This measure, according to the text of the decree, was required «in connection with the commission by a number of foreign states of unfriendly actions against the Russian Federation».