Russia and UAE Sign New Double Taxation Agreement

Russia and the UAE have signed a landmark agreement to eliminate double taxation and prevent tax evasion, set to take effect on January 1, 2026. Signed during the first Russian-Emirati financial dialogue in Abu Dhabi, the treaty aims to boost trade, encourage mutual investment, and create a favorable environment for businesses and individuals. 

Key highlights: 

– 10% withholding tax on dividends, interest, and royalties. 

– Exemptions for state and financial institutions (e.g., Russian Direct Investment Fund, Bank of Russia). 

– Business profits taxed only in the country of operation, unless a permanent establishment exists. 

– Tax credits for residents earning income in the other country. 

This long-awaited move is expected to reduce the tax burden on cross-border transactions and make the UAE a more attractive jurisdiction for Russian businesses, especially amid rising domestic tax rates in Russia. 

The UAE may also be removed from Russia’s “blacklist” of offshore jurisdictions, unlocking further tax advantages. 

The new treaty will enter into force after the ratification by both countries. This replaces the 2011 agreement, which provided benefits only for government agencies, organizations with state participation and sovereign wealth funds, reflecting the UAE’s evolving tax system and strengthening economic ties between the two nations.