Russia ratified Double Taxation Agreement with the UAE

The State Duma of the Federal Assembly of the Russian Federation has ratified agreement signed in Abu Dhabi on December 7, 2011 between the Russian Federation and the United Arab Emirates for the avoidance of double taxation of investments of both states and their financial and investment organizations.

The agreement applies to the Russian profits tax as well as the UAE corporation and profits tax, namely, provincial profits tax levied in each emirate. The purpose of the agreement is the avoidance of double taxation with respect to investments, loans and real property holding.

Under the agreement, income from real property should be taxed in the state in which this property is located. In the state of real property the income from alienation of property, gains on shares and  other profits more than 50% of value of which is directly or indirectly connected with real property is also  taxed.

The agreement also provides that dividends paid by a company which is a resident of a сontracting state in favor of another state (or its financial institutions) shall be taxed only in that state. Interest arising in one of the states and paid to another state shall be exempt from taxation in the first state.