UAE asks Russia to reconsider tax agreements with Arab countries – Kommersant
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Negotiations between Russia and the UAE on a new agreement on the avoidance of double taxation have dragged on, reports Forbes with reference to sources. According to the publication, the UAE authorities want the same conditions that Russia has with other Middle Eastern states – Qatar and Saudi Arabia.
In the new version of the tax agreement, the UAE authorities put forward additional conditions in addition to the tax rate for the payment of dividends, as well as interest and royalties at the level of 10%. According to the publication’s source, the UAE authorities agree to the deal only if Russia reconsiders agreements with other Arab countries. Now the rate for them is set at 5%.
“It is very important for the UAE that the updated tax conditions are no worse than those of its neighbors. Therefore, they began to push Russia to reconsider other agreements,” said a Forbes source familiar with the progress of the negotiations. According to a federal official, the Russian side “conceptually disagrees” with the UAE proposal. At the same time, Russia is not abandoning its plans to conclude a new agreement.
The Ministry of Finance began reviewing double taxation agreements with “friendly” countries in 2022. The tax on dividends can be reduced to 5-10% (depending on the country) instead of the 15% rate, and on interest on loans and royalties – to 0% instead of 20%.
According to the tax agreement with the UAE of 2011, benefits are provided only for government agencies, as well as organizations with state participation and sovereign funds. Moreover, after the outbreak of hostilities in Ukraine in February 2022, Russian businesses transferred their structures to the UAE from Cyprus and other EU jurisdictions. According to Rosfinmonitoring, capital outflow from Russia to the UAE has almost doubled since the spring of 2022.
More details in the material “Russian business has started speaking Arabic”.
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