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Russia and the United Arab Emirates have concluded the final round of negotiations on and initialled the draft of a new Double Taxation Agreement (DTA) on income and capital and to help prevent tax evasion. DTA provisions typically protect tax payers from being taxed twice for the same income, such as a Russian national working in, and paying taxes in the UAE and then having to do the same when returning that income to Russia. DTA are also useful tools in the services industry, as royalties and other fees chargeable are usually taxed at a lower rate than the normal profits tax, allowing DTA to be used as a legitimate tax reduction mechanism.
The document was initialled by Russian Deputy Finance Minister Alexei Sazanov and UAE Deputy Finance Minister Younis Haji Al Khoori, and will cover state companies and institutions, as well as private businesses and individuals.
Sazanov said “We held several rounds of negotiations with our partners from the Arab Emirates and reached understandings on terms of the agreement that satisfy both sides and will stimulate the growth of economic cooperation between our countries.”
The countries agreed to sign the agreement as soon as possible and assured one another that every effort will be made for it to go into effect as of January 1, 2026. The ministry has not as yet specified details of the agreement.
Corporate profits tax in the UAE is a standard rate of 9%. It is generally 25% in Russia. A DTA agreement between the UAE and Russia would mean that a Russian national working in the UAE would pay 9% in the UAE according to the local regulations. If that income is subsequently returned to Russia, a further 16% would be payable to the Russian authorities instead of the full 25%.
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