Increased Tax Scrutiny of Russian Assets in the UAE: What to Expect in 2026

28.10.2025

New Wave of Audits

According to available information, Russian tax authorities are expected to intensify scrutiny in 2026 of individuals with financial interests in the United Arab Emirates. The reasons include:

• Growing concentration of Russian capital in the UAE
• Expansion of international information exchange channels

Information Exchange Mechanisms

CRS System (Common Reporting Standard)

• Automatic exchange of financial data between countries has been in place since 2019.
• UAE banks regularly report on clients who are tax residents of Russia.
• This data flow is confirmed by international agreements and internal regulations of the Russian Federal Tax Service (FTS).

Bilateral Requests

• In addition to CRS, targeted requests for specific individuals and their activities are possible.
• This allows Russian authorities to obtain nearly any information upon request.

Who Is at Risk

Individuals

• Residing in Russia for more than 183 days per year
• Holding foreign bank accounts without notifying the FTS

Obligations:

• Account Notification: within 30 days of opening/closing

Penalty: up to ₽5,000

• Annual Reporting: on account activity

Penalty: ₽1,000 to ₽50,000

Exception:

Individuals spending more than 183 days abroad are exempt from these requirements.

Risks of Non-Compliance

• Penalties for failure to notify are moderate, but may trigger investigations into the origin and legality of funds.
• Violation of currency regulations:

Penalty: 20–40% of the transaction amount (previously 75–100%)

Protective Measures:

• 45-day grace period for repatriation without penalties
• Exemption from liability in cases of forced violations due to international restrictions

Advantages of Jurisdictions with Automatic Exchange

• Since 2020 (retroactively from 2018), it is legal to receive payments from foreign counterparties into accounts in CRS-participating countries.
• If funds are received legally, the account holder has unrestricted access to currency operations.

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Controlled Foreign Companies (CFCs)

Control arises when:

• Ownership ≥ 25% (or ≥ 10% in joint ownership)
• Ability to manage profits without formal ownership

Obligations of Russian Tax Residents:

Changing Tax Residency

• Spending less than 183 days in Russia removes obligations under currency and CFC regulations.
• However, reporting for previous periods remains mandatory.
• Former residents may face claims when receiving income from Russian sources without paying non-resident tax rates.

Proof of Status:

• Passport border stamps
• Future plans include automated residency tracking based on migration data

UAE Tax Residency

• Obtaining UAE tax residency and updating bank profiles significantly reduces the likelihood of data being shared with Russia.
• Banks stop classifying the client as a foreigner.
• Important: data exchanged in the current year reflects the previous period.

Conclusions

Heightened risks apply to:

• Individuals who have not disclosed assets
• Citizens failing to submit required reports
• Former residents with income from Russian sources
• Public officials prohibited from holding foreign accounts

Changing tax status ends current obligations but does not exempt from liability for prior periods.
While applicable to all jurisdictions, the UAE remains a priority due to the concentration of Russian assets.

What Should You Do Now?

If you:

• Own assets in the UAE
• Manage foreign bank accounts
• Participate in international structures
• Plan to change your tax residency

Don’t delay your analysis and preparation!

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Authors: Anna Miritskaya, Matsvei Shastsiarniou.

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