European Union removes UAE from Blacklist
The European Union removed eight countries including UAE, Barbados, Grenada, Macau, Mongolia, Panama, South Korea, and Tunisia from its new tax haven “blacklist” after they pledged to address their concerns.
Eight of the 17 jurisdictions currently listed, including the UAE, quickly removed from the list after they offered to change their tax rules, according to EU documents seen by Reuters.
In EU statement said, “Eight jurisdictions have been removed from the EU’s list of non-cooperative jurisdictions for tax purposes, following commitments made at a high political level to remedy EU concerns”.
United Arab Emirates was largely compliant now, The Ministry of Finance announced the new status for UAE relating to the Global Forum on Transparency and Exchange of Information for Tax Purposes Index and beside from that officials in the country also signed FATCA (Foreign Account Tax Compliance Act) for compliance with US financial regulation
UAE now complies with international Common Reporting Standards. Now that UAE is in BEPS (Base Erosion and Profit Shifting), UAE’s international business standing will improve well.
Once the Base Erosion and Profit Shifting (BEPS) is fully adopted, multinational companies operating within the UAE are required to provide information on revenues and profitability, employee numbers, and tax information for each country and if any international tax authority requires information for any organization operating in the UAE, it may approach UAE’s tax authorities directly, subject to agreement and proper procedure.
Global Trends on Tax Avoidance
New regulations mean that where a business entity must submit full documentation on their financial operations, it will be easier to see how much tax is being paid against those profits and where the profits go.
Base Erosion and Profit Shifting (BEPS) is a framework of the OECD (Organisation for Economic Co-operation and Development) requiring minimum standards on tax and profit disclosure regarding international transactions. Globally, the world’s economic powers are tightening up laws on tax avoidance and evasion for greater fiscal transparency and information exchange.
Tax reform will certainly attract new foreign investment and provide a common national market in the UAE, Furthermore, UAE’s new compliance will increase investment and jobs.
Now, the country expects growth in many areas such as;
- real estate
- retail amongst others.
Expected to show new investment by the end of the first quarter of the year.