Russia and the United Arab Emirates (UAE) have reached a preliminary agreement on introducing a 10 percent tax rate on income from dividends, interest, and royalties under a double taxation agreement (DTA). This was announced by State Secretary and Deputy Finance Minister Alexey Sazanov. The signing of the final agreement is expected in the first half of 2025.
Negotiations on this issue began back in 2022, but their duration was due to the UAE's position on the proposed terms. According to Sazanov, the UAE's desire to agree to these terms was the main factor contributing to the movement towards signing the agreement.
This agreement is intended to prevent Russian businesses from using foreign jurisdictions to obtain preferential tax rates, as well as to facilitate an increase in the inflow of foreign investment into Russia without damaging the national tax base.
At the moment, the old version of the agreement signed in 2011 is in effect between Russia and the UAE, which provides tax benefits only to government agencies and organizations with state participation. In addition, the UAE is still on the blacklist of offshore zones of the Russian Ministry of Finance, which means that they refuse to disclose data on financial transactions when requested by tax authorities of other countries.
Negotiations on this issue began back in 2022, but their duration was due to the UAE's position on the proposed terms. According to Sazanov, the UAE's desire to agree to these terms was the main factor contributing to the movement towards signing the agreement.
This agreement is intended to prevent Russian businesses from using foreign jurisdictions to obtain preferential tax rates, as well as to facilitate an increase in the inflow of foreign investment into Russia without damaging the national tax base.
At the moment, the old version of the agreement signed in 2011 is in effect between Russia and the UAE, which provides tax benefits only to government agencies and organizations with state participation. In addition, the UAE is still on the blacklist of offshore zones of the Russian Ministry of Finance, which means that they refuse to disclose data on financial transactions when requested by tax authorities of other countries.
