Can Employment in the UAE Be Counted Towards a Pension in Ukraine?
Thousands of Ukrainians live and work in the United Arab Emirates (UAE) in a wide range of industries. When returning to Ukraine, some of them face an important question: how will their pension rights be determined if part of their working career was spent in Ukraine and another part abroad?
Recognition of foreign employment and insurance periods for pension purposes depends on Ukrainian legislation and the applicable international social security framework. Where an international agreement provides for recognition or aggregation of insurance periods, foreign periods may be taken into account subject to proper confirmation by the competent authorities of the relevant country.
Given the number of Ukrainians who live and work in the UAE, questions concerning pension rights in the context of Ukraine and the United Arab Emirates are increasingly relevant.
Recognition of employment or insurance periods accumulated in the UAE depends on the international social security arrangements applicable between Ukraine and the United Arab Emirates. In the absence of an agreement providing for the aggregation or mutual recognition of insurance periods, employment in the UAE is not automatically included in the insurance record required for a Ukrainian pension.
At the same time, Ukraine and the UAE have concluded an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital. However, this agreement regulates taxation and should not be confused with an international social security agreement governing the recognition of foreign insurance periods.
The agreement contains specific provisions concerning pensions and other similar payments. In particular, it establishes rules determining which of the contracting states has the right to tax particular pension income. Separate provisions may apply to pensions paid under a public pension or social security system, with the applicable tax treatment depending on factors including the recipient’s residence and nationality.
It is therefore important to distinguish between recognition of UAE employment for Ukrainian pension purposes, taxation of pension income and payment of an already granted Ukrainian pension to a person residing abroad. These are separate legal issues governed by different rules.
The Constitutional Court of Ukraine has also considered the right of Ukrainian pensioners residing abroad to continue receiving their pensions. It declared unconstitutional provisions of Ukrainian pension legislation that made pension payments to persons permanently residing abroad dependent on whether Ukraine had concluded an international pension agreement with the country concerned.
Accordingly, the absence of an international social security agreement with a particular country should not, by itself, be treated as grounds for terminating an already granted Ukrainian pension solely because the pensioner permanently resides abroad. At the same time, this principle does not automatically mean that periods of employment accumulated in the UAE must be counted towards the insurance record required to qualify for a Ukrainian pension.
Ukrainians who have worked in the UAE should therefore retain documents confirming their employment, earnings and participation in any applicable social insurance or pension schemes. The legislation and international arrangements in force at the time of applying for a pension should be examined to determine how the relevant foreign periods affect pension entitlement.
