UAE confident of removal from an EU tax blacklist
The UAE’s Ministry of Finance disputed the European Union’s decision to re-include it in its blacklist of non-co-operative tax jurisdictions, despite making commitments towards transparency in tax procedures.
The ministry said it was committed to all international agreements, standards and procedures concerning tax processes and is working towards compliance with all stakeholders, including the EU.
“We are confident that the European Union will lift the United Arab Emirates’ name from its list of non-co-operative jurisdictions for tax purposes, and we look forward to moving on to the next phase of cooperation with the relevant authorities in the European Union on other important issues related to tax cooperation between the two parties,” Younis Al Khoori, undersecretary of the ministry said in yesterday.
“The Ministry of Finance is currently working with all stakeholders at local and international levels to reach a plan that meets all the required standards within the specified period of time.”
The EU first put the UAE on a list of “non-co-operative jurisdictions for tax purposes” in December 2017. The original list included 17 countries. But in January 2018, the UAE was removed from the blacklist and put in a “grey list” after making commitments to enhance its tax procedures.
Abdul Aziz Al Ghurair, chairman of the UAE Banks Federation and chief executive of Mashreq Bank, was sanguine the issue would be resolved.
“What the EU wants is certain conditions and the UAE has to issue a legislation,” Mr Al Ghurair told The National.
“That legislation is taking time, but the UAE has agreed with the EU on all the steps needed to be taken.”
“The agreement is there, the understanding is there and many EU members understand the UAE’s position. Getting a law in place in three months [or] six months is very difficult in the UAE. Issuing a law takes its own [time] cycle … We just have to implement now what we have agreed to. I am sure it will be fixed very soon.”
The UAE has signed a number of agreements to improve its tax procedures, including the Base Erosion and Profit Shifting Minimum Standard, a rule that seeks to limit the shifting of profits to jurisdictions where there is low or no taxes.
Under BEPS, the UAE also signed an agreement on the exchange of country-by-country reports.
“This agreement establishes the requisite rules and procedures for the appropriate authorities to annually exchange financial reports of multinationals with incomes of €750 million (Dh3.11 billion) or more,” said the ministry.
“The reports are handed over to the tax authority of the country where these companies are based and exchanged with the tax authorities of the countries in which the group operates.”
It also signed the Multilateral Agreement, which allows governments “to resolve any loopholes in tax agreements, prevent abuse of treaties and to improve the settlement of disputes”.
“The nation is currently working with the relevant parties to prepare a legislation on the current economic activities to be completed during the second half of this year,” said the ministry.