By Swann Collins, investor and consultant in international affairs – Eurasia Business News, August 28, 2025. Article no. 1749
For Russian residents in Dubai, the new double taxation treaty (DTT) between Russia and the United Arab Emirates (UAE), entered into force on July 18, 2025, with application starting January 1, 2026, brings several key benefits and important considerations:
The treaty applies to all tax residents of both countries, including individuals and companies, covering income and capital taxes.
Russian residents in Dubai may be considered tax residents of both countries if they meet residency criteria (183+ days in Russia, 90+ days in UAE with residence permit, home, or business). The treaty includes tie-breaker rules to determine the primary tax residency based on permanent home, economic ties, habitual residence, and citizenship.
A reduced withholding tax rate of 10% applies to passive income such as dividends, interest, and royalties paid across borders.
There is no personal income tax in the UAE, so the treaty allows Russian residents to credit any UAE taxes paid against their Russian tax liabilities, reducing double taxation.
The treaty exempts capital gains tax for UAE residents on sales of Russian company shares (with exceptions for companies holding significant Russian real estate).
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Employment income is generally taxed in the country of residence unless physical employment in the other country exceeds 183 days within 12 months.
Russian residents in Dubai who conduct business with annual revenues exceeding AED 1 million may face corporate taxation in the UAE and can credit this tax against Russian taxes.
Overall, the treaty clarifies tax residency issues, reduces cross-border tax burdens, prevents double taxation, and facilitates investment and economic activity for Russians living or doing business in Dubai.
This treaty thus provides Russian residents in Dubai with more clarity, protection from double taxation, and favorable tax treatment on passive income and investments under clearly defined rules.
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