Taxes – a word alien to this part of the world will longer be so. The last few years have seen various new developments related to taxation in whole of Gulf region and the United Arab Emirates (UAE) is not an exception.
Implementation of Common Reporting Standards (CRS)
Nations across the world have recognized the need to exchange the information to keep an eye on these tax evasions. The organization for Common Economic Cooperation and Development (OECD) have developed Common Reporting Standards (CRS) with the assistance of G20 nations, the European Union and other stakeholders. It is majorly following the principles laid down by United States’ Foreign Accounts Tax Compliance Act (FATCA). Like FATCA, it also inflicts financial institutions around the world to collect and share certain specified information related to Account holders with their home country’s authorities.
The UAE also committed to exchange important financial information related to individuals and legal entities to curtail tax evasions. The MoF has stated on various occasions that CRS shall be completely applicable to UAE by the end of 2018. Ministry of Finance (MoF), UAE has recently issued a comprehensive guidance note for implementation of CRS in UAE. As per the same, the banks and other financial institutions shall be collecting the information about their clients. The major cut off dates for the same are:
31st Dec, 2016 Account opened on or before 31st Dec, 2016
31st Dec, 2017 For finishing the review of existing high value accounts held by individuals and reporting the same
30th June, 2018 First reporting to be done for the following:
(i) Pre-existing high value accounts held by individuals
(ii) Identified low value individual accounts
Annual reporting to be done by 30th June every year for all reportable accounts
30th Sep, 2018 Exchange to information with Partner jurisdictions
31st Dec, 2018 Last date for review of existing and identified low value individual and entity accounts
2017 : An Year of Change in UAE for tax and investment Purposes
As per data available on 10th January, 2017 the UAE has entered tax treaties with 73 nations and investment protection treaties with 37 countries, many of which shall come into force within the year 2017.
The Harmonized Commodity Description and Coding System (HS) is a tool used by most nations around the world for custom tariffs in international trade. It is also accepted by GCC nations for a collection of international trade data. An amended version of this system shall come into force in UAE from 1st January, 2017.
It is indicated at various occasions, that the rules related to the implementation of Value Added Tax (VAT) shall be introduced very soon and a full-fledged VAT and excise legislation shall come into force by 2018.
The rulers of the UAE have shown their commitment towards the treaties and maintain a cordial business relations with nations around the world. In the line of the same, they have issued effective rules for exchange of information about the identified and high value account holders with the appropriate jurisdictions to ensure minimal tax evasions and curtail unfair use of legal entities for tax avoidance.
The post Recent Developments in Taxation Issues in UAE appeared first on IMC.