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Ratification of the agreement on the avoidance of double taxation between the Russian Federation and the UAE
Russia and the United Arab Emirates signed a long-awaited document in February 2025—an agreement on the avoidance of double taxation (AADT). This strategic step could radically change the investment landscape and simplify business between the two countries, ensuring mutually beneficial economic cooperation. It has now been submitted to the Russian State Duma for ratification.
The draft agreement aims to remove one of the key obstacles to the active development of bilateral economic relations: the problem of double taxation. At this stage, Russian and Emirati companies, as well as individuals doing business in both countries, face this risk. The DTAA aims to effectively solve this problem by creating more predictable and attractive conditions for investment and international trade.
The key advantage of the agreement is that it provides protection from double taxation for both legal entities and individuals. This means that income received in one country will not be taxed again in the other. This measure is designed to stimulate the flow of investment, both from Russia to the UAE and vice versa, opening up new opportunities for joint projects and business expansion in both territories.
It is important to note that the DTA does not provide for the waiver of national tax sovereignty for either Russia or the UAE. Both countries will retain the right to apply their own national tax laws and the right to regulate taxation in accordance with their internal regulations. The agreement only establishes a mechanism to prevent double taxation, determining which country has priority rights to tax certain types of income.
The agreement will enter into force on January 1 of the year following its ratification by both parties and after the necessary domestic procedures have been completed. This time frame is important for completing all formalities and maintaining the smooth functioning of the new mechanism.
The key advantage of the agreement is that it provides protection from double taxation for both legal entities and individuals. This means that income received in one country will not be taxed again in the other. This measure is designed to stimulate the flow of investment, both from Russia to the UAE and vice versa, opening up new opportunities for joint projects and business expansion in both territories.
It is important to note that the DTA does not provide for the waiver of national tax sovereignty for either Russia or the UAE. Both countries will retain the right to apply their own national tax laws and the right to regulate taxation in accordance with their internal regulations. The agreement only establishes a mechanism to prevent double taxation, determining which country has priority rights to tax certain types of income.
The agreement will enter into force on January 1 of the year following its ratification by both parties and after the necessary domestic procedures have been completed. This time frame is important for completing all formalities and maintaining the smooth functioning of the new mechanism.
The ratification of the agreement between the Russian Federation and the United Arab Emirates marks a significant event that will have a positive impact on the investment climate and greatly facilitate business between the two countries. It is an expression of mutual trust and readiness for long-term and mutually beneficial cooperation, opening up broad prospects for improving Russian-Emirati economic relations. It is expected that the FTA will stimulate investment, increase trade volumes, and strengthen the positions of both countries on the world stage.
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