Russia and the UAE have agreed on the terms of a new double taxation agreement. The agreements between the two countries signed in February 2025. Acsour experts commented on the terms of the agreement and talked about its importance for business.
What are the current conditions?
Currently, the UAE is included in the "black" list of offshore zones compiled by the Russian Ministry of Finance. This list includes countries or individual territories that provide preferential tax regimes, but do not disclose or provide information when conducting financial transactions upon requests from tax authorities from other countries.
The current agreement on the avoidance of double taxation between Russia and the UAE was signed in 2011 and entered into force on January 1, 2014 (Letter of the Ministry of Finance dated May 15, 2014 No. 03−08−05/22 898). Its terms cover
Thus, no benefits are provided for private businesses, so now companies pay the standard Russian withholding tax rate of 15%.
Acsour experts note that negotiations with the UAE on signing a new agreement on avoiding double taxation have been going on for more than two years: the countries have been looking for mutually beneficial solutions on several issues. A major obstacle was the rate of interest on key types of passive income — dividends, interest and royalties. The UAE agreed to the "10−10−10" formula proposed by the Russian Ministry of Finance only on the condition that Russia revises the agreements with Qatar and Saudi Arabia, increasing the current ones to 10%. We remind you that the agreement on avoiding double taxation with Qatar and Saudi Arabia provides for a rate of 5% on dividends and interest and 10% on royalties. Discussions on revising the terms of the agreement with these countries have been initiated, however, there is no information on progress.
The agreement reached: the main innovations
The future agreement on avoiding double taxation between Russia and the UAE is based on the formula "10−10−10": thus, the withholding tax rate for dividends, interest and royalties paid abroad is 10% for each type of payment.
Acsour experts note that this draft agreement is the basic version of the agreement on avoiding double taxation, which the Ministry of Finance is offering to neutral countries with which it plans to sign a new agreement.
For example, agreements on avoidance of double taxation with Oman and Malaysia have been signed under similar conditions.
According to the parties, the signing of the DTT and its ratification will be prepared and implemented as soon as possible to ensure that the agreement comes into force as early as January 1, 2026.
According to the parties, the signing of the agreement on the avoidance of double taxation and its ratification will be prepared and implemented as soon as possible in order to ensure the entry into force of the agreement as early as January 1, 2026.
Applying double taxation agreements and conducting transactions with foreign companies are associated with both enormous business opportunities and significant risks. Acsour specialists will be glad to ensure that your company operates legally in accordance with all legal standards in the international market.
What are the current conditions?
Currently, the UAE is included in the "black" list of offshore zones compiled by the Russian Ministry of Finance. This list includes countries or individual territories that provide preferential tax regimes, but do not disclose or provide information when conducting financial transactions upon requests from tax authorities from other countries.
The current agreement on the avoidance of double taxation between Russia and the UAE was signed in 2011 and entered into force on January 1, 2014 (Letter of the Ministry of Finance dated May 15, 2014 No. 03−08−05/22 898). Its terms cover
- government agencies;
- organizations with state participation;
- sovereign funds.
Thus, no benefits are provided for private businesses, so now companies pay the standard Russian withholding tax rate of 15%.
Acsour experts note that negotiations with the UAE on signing a new agreement on avoiding double taxation have been going on for more than two years: the countries have been looking for mutually beneficial solutions on several issues. A major obstacle was the rate of interest on key types of passive income — dividends, interest and royalties. The UAE agreed to the "10−10−10" formula proposed by the Russian Ministry of Finance only on the condition that Russia revises the agreements with Qatar and Saudi Arabia, increasing the current ones to 10%. We remind you that the agreement on avoiding double taxation with Qatar and Saudi Arabia provides for a rate of 5% on dividends and interest and 10% on royalties. Discussions on revising the terms of the agreement with these countries have been initiated, however, there is no information on progress.
The agreement reached: the main innovations
The future agreement on avoiding double taxation between Russia and the UAE is based on the formula "10−10−10": thus, the withholding tax rate for dividends, interest and royalties paid abroad is 10% for each type of payment.
Acsour experts note that this draft agreement is the basic version of the agreement on avoiding double taxation, which the Ministry of Finance is offering to neutral countries with which it plans to sign a new agreement.
For example, agreements on avoidance of double taxation with Oman and Malaysia have been signed under similar conditions.
According to the parties, the signing of the DTT and its ratification will be prepared and implemented as soon as possible to ensure that the agreement comes into force as early as January 1, 2026.
According to the parties, the signing of the agreement on the avoidance of double taxation and its ratification will be prepared and implemented as soon as possible in order to ensure the entry into force of the agreement as early as January 1, 2026.
Applying double taxation agreements and conducting transactions with foreign companies are associated with both enormous business opportunities and significant risks. Acsour specialists will be glad to ensure that your company operates legally in accordance with all legal standards in the international market.
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