Bridging Tax Systems: The New Russia-UAE Double Taxation Treaty Explained

A comprehensive Double Taxation Agreement (DTA) between the Russian Federation and the United Arab Emirates (UAE) was signed on 17 February 2025. It is set to replace the limited 2011 accord and is anticipated to enter into force on 1 January 2026. This treaty applies to both individuals and companies, aiming to provide legal certainty, reduce cross-border tax burdens, and prevent tax evasion.

For entrepreneurs and investors considering business setup in the UAE, the treaty strengthens the UAE’s position as a preferred jurisdiction by combining international tax transparency with its globally competitive, low-tax environment.

Why This Treaty Matters for UAE Business Setup

The UAE remains one of the most attractive destinations globally to set up a business in the UAE, particularly for international founders seeking access to global markets while benefiting from a business-friendly tax regime.

• This new Russia–UAE DTA provides:
• Clear allocation of taxing rights
• Protection against double taxation
• Predictability for long-term company setup in the UAE

For Russian individuals and businesses looking to expand internationally, the treaty removes many of the uncertainties historically associated with cross-border taxation.

Key Tax Rules

Scope

The DTA covers Russian profit tax, personal income tax, and property tax, alongside UAE income and corporate taxes.

Withholding Tax (WHT)

A preferential maximum WHT rate of 10% is set for dividends, interest, and royalties exchanged between residents. This significantly lowers potential Russian statutory rates.

Double Taxation Elimination

The agreement uses a tax credit method, allowing taxes paid in one country to be offset against liabilities in the other.

Business & Residency

Business income is taxed only in the country of residence unless a Permanent Establishment (PE) exists in the other state. Clear ‘tie-breaker’ rules are included to determine tax residency.

Strategic Benefits

The treaty’s implementation is expected to facilitate the UAE’s removal from Russia’s ‘offshore lists’, unlocking significant tax benefits and exemptions for Russian businesses.

Remote Work

Income from remote work for an employer/client in the other state is deemed sourced, and potentially taxable, in the employer’s/client’s country.

Status

Russia formally ratified the DTA on 7 July 2025. The entry into force on 1 January 2026 is now contingent on the UAE completing its own ratification process and the formal exchange of diplomatic notes this year.