On February 17, 2025, the new double taxation treaty (DTT) between Russia and the United Arab Emirates was signed in Abu Dhabi. The DTT is to be ratified in Russia and is expected to come into force starting from 2026.
The current agreement between Russia and the UAE from 2011 applies to state institutions and organizations with state participation only. The new DTT will also apply to private companies and individuals.
The below chart shows the changes in taxation when the DTT rules apply.
In addition, the DTT allows avoiding double taxation for private individuals. While the companies may avoid double taxation by deducting taxes paid to the UAE from Russian taxes without a DTT for private individuals, the existence of the DTT is one of the preconditions for the deduction. The avoidance of double taxation for private individuals will only be possible after the DTT enters into force.
Overall, the tax benefits and exemptions introduced by the DTT, together with the relatively low tax burden in the UAE, make this country even more attractive for structuring business activities.