The special list applies from 01.01.2024 to 01.01.2027 for the purposes of:

1. Exemption of profits of active holding and sub-holding CFCs from taxation (subpara. 3, para. 7, art. 25.13-1 of the Tax Code of the Russian Federation).

2. Adjustment of CFC profits for controlling persons that are organizations for corporate profit tax purposes (subpara. 3, para. 1.2, art. 25.15 of the Tax Code of the Russian Federation).

3. Inclusion in the income of a Russian organization of property received free of charge from a foreign organization for corporate profit tax purposes (para. 3 of subpara. 11, para. 1, art. 251 of the Tax Code of the Russian Federation).

4. Application of a 0% tax rate to dividends received from a foreign company for corporate profit tax purposes (subpara. 1 or 1.1, para. 3, art. 284).

Thus, from 01.01.2024:

• dividends received by a Russian company from a company in the UAE are taxed in Russia at a rate of 13%;

• property and property rights received by a Russian organization free of charge from a company in the UAE are included in income for corporate profit tax purposes;

• profits of active holding and sub-holding CFCs from the UAE cannot be exempted from taxation in Russia.

For other purposes provided for by the Tax Code of the Russian Federation, in 2024–2026 the list of offshore zones established by Order No. 86n of the Ministry of Finance of the Russian Federation dated 05.06.2023 applies, which contains 91 jurisdictions.

Of the current Middle Eastern jurisdictions, only the UAE is included in the new list. It is expected that after a new Double Taxation Avoidance Agreement is concluded between the UAE and Russia, the UAE will be removed from the “blacklist”.

How we can help:

• Asset structuring for tax optimization.

• Analysis and assessment of the existing asset structure from the perspective of tax and currency control legislation.

• Preparation of reporting documents under currency control and tax legislation.