UAE holds talks with Russia on double taxation avoidance deal

Arab world's second-largest economy has finalised and signed 142 double taxation avoidance agreements to date, Ministry of Finance says

The UAE aims to strengthen economic ties with Russia. Pawan Singh / The National

The UAE held the second round of negotiations with Russia over an agreement on the avoidance of double taxation on income and capital, as the Arab world's second-largest economy aims to strengthen trade and investment ties with Moscow.

The UAE’s negotiations team was headed by Younis Al Khoori, undersecretary of the Ministry of Finance, along with representatives from the Abu Dhabi Investment Authority and Mubadala Investment Company, the Ministry of Finance said in a statement on Monday.

“The negotiations on the double taxation agreement are of paramount importance, as we aim to eliminate the barriers that hinder economic co-operation between Russia and the UAE,” Mr Al Khoori said.

“The Ministry of Finance aims to expand its network of double taxation avoidance agreements pertaining to income, to promote the UAE’s competitiveness and grow its trade and investment relations with all trade partners.

“To date, the UAE has finalised and signed 142 double taxation avoidance agreements.”

Double taxation avoidance agreements provide several advantages, including promoting development goals and diversifying national income sources, addressing challenges of cross-border trade and investment flows as well as providing full protection from double taxation, according to the Ministry of Finance.

On the sidelines of the negotiations, Mohamed Al Hussaini, UAE Minister of State for Financial Affairs, met Alexey Sazanov, Russia's state secretary and deputy minister of finance, and Timur Zabirov, Russia's ambassador to the UAE, to discuss efforts to further enhance co-operation between the two countries in areas of mutual interest.

“We reiterate the importance of co-ordination and constructive dialogue with the Russian Federation to strengthen our strategic partnerships and expand horizons for economic, financial and trade-related joint action,” Mr Al Hussaini said.

The UAE is seeking to develop closer trade and investment relations with partners around the world.

It is working towards signing 26 Comprehensive Economic Partnership Agreements as it seeks to diversify its economy, Abdulla bin Touq, Minister of Economy, said in March.

The UAE has already signed Cepas with India, Israel, Indonesia, Turkey and Cambodia and is close to finalising agreements with Kenya.

And the UAE is already investing in Russia. In 2021, Abu Dhabi’s strategic investment arm Mubadala has acquired 1.9 per cent stake in petrochemicals company Sibur for an undisclosed amount, marking the fund’s largest investment in Russia.

In the same year, Mubadala also bought a 2.6 per cent stake in Russian aluminium company En+, which is listed on the Moscow Stock Exchange, with global depositary receipts listed on the London Stock Exchange.

Mubadala has also joined forces with the Russian Direct Investment Fund to form a $7 billion co-investment platform.