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Senior officials during the event.
The UAE, represented by the Ministry of Finance (MoF), held the second round of negotiations between the UAE and the Russian Federation on the double taxation agreement on income and capital.
The negotiations are based on the ministry’s efforts to further strengthen the framework for tax cooperation, adequately protect taxpayers from double taxation and avoid hindrances to the free flow of trade and investment.
The meeting was held at the ministry’s headquarters in Dubai. During the meeting, Mohammad bin Hadi Al-Husseini, Minister of State for Finance, met with Alexei Sazanov, State Secretary and Deputy Finance Minister of the Russian Federation, and Timur Zabiro, Ambassador of the Russian Federation to the UAE Husband, on discussing partnership efforts to further strengthen UAE-Russia cooperation, growth and development in areas of mutual interest.
During the meeting, Mohammad bin Hadi Al Husseini reiterated the UAE’s commitment to developing friendly relations and cooperative efforts with the Russian Federation, especially in areas of mutual interest in key sectors, and in a manner that is in the interests of both countries.
Mohammed Bin Hadi Al Husseini added: “We reiterate the importance of a coordinated and constructive dialogue with the Russian Federation to strengthen our strategic partnership and broaden the horizons of joint economic, financial and trade-related actions.”
The UAE’s negotiating team was led by Deputy Finance Minister Younis Haji Al Khoori, as well as representatives of the Abu Dhabi Investment Authority (ADIA) and Mubadala Investment Company.
The meeting was attended by Alexey Sazanov from the Russian Federation, Alexander Smirnov, Deputy Head of the Tax and Customs Policy Department of the Ministry of Finance, Ekaterina Vinogradova, Head of the International Tax Relations Department of the Tax Policy Department of the Ministry of Finance, and Alexandra Kadet, Head of the Transfer Pricing Department of the Federal Tax Service.
Younis Haji Al Khoori emphasized the importance of these dialogues in promoting bilateral relations between the UAE and the Russian Federation, especially in the fields of finance, trade and investment.
Younis Haji Al Khoori said: “Negotiation of a double taxation agreement is of paramount importance as we aim to remove obstacles hindering economic cooperation between Russia and the UAE.”
Younis Haji Al Khoori added: “The Ministry of Finance aims to expand its network of income-related double taxation agreements to boost the UAE’s competitiveness and develop trade and investment relationships with all trading partners. So far, the UAE has finalized and 142 agreements for the avoidance of double taxation were signed.”
Double taxation agreements have multiple advantages, including promoting development goals and diversifying sources of national income, avoiding double taxation and tax evasion, addressing the challenges of cross-border trade and investment flows, providing comprehensive protection for individuals against double taxation, and Avoid impeding the free flow of trade and promoting investment.
In addition to supporting the exchange of goods and services and the movement of capital, it also takes into account tax-related challenges and global changes.
Meanwhile, Russia and Oman signed an agreement to avoid double taxation, a move Russia’s finance ministry said was an important step in deepening economic ties between the two countries.
“The mutual trade volume between our two countries has already shown an increase of 46 percent by 2022,” Deputy Finance Minister Alexei Sazanov was quoted as saying. “It is necessary to further increase trade volume and strengthen economic cooperation.”
Russia has proposed suspending double taxation agreements with what it calls “unfriendly countries” – those that imposed sanctions on Moscow over its invasion of Ukraine.
It currently has double taxation treaties – designed to prevent the same income from being taxed in two states – with 84 countries (including the US, UK, Germany, France, Japan and others that impose sanctions).
The agreement with Oman provides for a 15 percent withholding tax on dividend income and a preferential 10 percent tax rate for companies that hold at least 20 percent of the dividend payer, the finance ministry said.
The tax rate on interest income and royalties is set at 10%, the ministry added. State-owned entities and other forms of public investment will be exempt from withholding tax on dividend and interest income.
The agreement is due to be ratified this year and will come into force on January 1, 2024.
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