- Agreement meant to enhance trade and investment opportunities between both countries
In line with efforts to achieve economic balance between both countries and to enhance mutual investments and strategic partnerships, the UAE has signed an agreement with Russia relating to taxation on income of public investment organizations. The agreement highlights efforts of enhancing different types of investment opportunities.
The signing ceremony took place at the Etihad Towers in Abu Dhabi. It was attended by HE Obaid Humaid Al Tayer, Minister of State for Financial Affairs, where the agreement was signed by HE Younis Haji Al Khouri, Undersecretary of MoF and by Russian Deputy Finance Minister Sergei Storchak.
The agreement coincides with both UAE and Russian efforts to create a positive investment environment which is distinguished by low start-up costs for investments and increased profit rates. This reflects the UAE’s strategy of diversifying its sources of national income and to enhance ties with other states.
Commenting on the agreement, HE Al Khouri said: “The agreement is mainly focused on promoting mutual cooperation with regards to investments and on determining tax rates. Both issues will reflect positively on our relations with Russia and on the UAE’s investment climate.”
HE Al Khouri added: “The agreement we have signed today is a direct result of the UAE’s continuous efforts to promote positive relations with different countries and to support trade relations and economic activities between the UAE and Russia.”
Some of the key issues addressed in the agreement include direct benefits to be received by UAE federal and local investment organizations and sovereign funds, where profits they attain from shares, interest and capital are exempted from Russian taxation.
The agreement also indicates that UAE federal and local organizations and sovereign funds are exempt from taxation in Russia, which had previously amounted to 20 % tax on stock profits, 15 % tax on profits from interest, and 20 % tax on capital profits (this includes the transfer of ownership of shares, bonds and other forms of ownership in any Russian companies).
The agreement also included a number of provisions for transferring data confidentially in a manner that does not negatively interfere with the laws of each respective country, or results in the revealing of sensitive trade information unless they were required by justice systems or governments. It also addresses outstanding investment disputes.
The UAE has signed 93 agreements to date with various countries, 58 of which were regarding double taxation, and 35 related to protecting and promoting mutual investments.
