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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: United Arab Emirates Supplementary Report

This report for United Arab Emirates has been published on 24 Apr 2014. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   It is not clear that foreign companies having their main offices or effective management in the Dubai Airport Free Zone are obliged to maintain ownership information or provide it to the authorities and thus such information may not be available to the competent authority.  The UAE should clarify that ownership information is available for foreign companies having their main offices, or effective management in the UAE in all cases. 
Identity information may not be consistently available in respect of foreign trusts which have an administrator or trustee in the UAE or in a free zone other than the DIFC.  An obligation should be established to maintain information in all cases in relation to settlors, trustees and beneficiaries of those foreign trusts which have an administrator or trustee in the UAE or in a free zone other than the DIFC. 
Phase 2 Rating Factors Recommendations
     
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Under the federal Commercial Transactions Law (CTL) entities in the free zones other than financial free zones are required to keep reliable accounting records, including underlying documentation, for a period of at least five years. However, the legislation in most free zones analysed varies from the CTL.  The UAE should clarify that all entities in the free zones are required to keep reliable accounting records, including underlying documentation, for a period of at least five years. 
The requirements to keep underlying documentation by DIFC entities other than entities regulated by the financial regulator are worded in a general way and do not go into detail regarding the type of underlying documentation to be kept, which could result in an uneven application of the obligation to keep underlying documentation.  The UAE should clarify its requirements that underlying documentation must be kept in respect of all relevant entities and arrangements in the DIFC. 
UAE and free zones legislation (with the exception of the DIFC) do not ensure that reliable accounting records or underlying documentation are kept for foreign trusts with a resident administrator or trustee.  The UAE and free zones laws should expressly provide for keeping of complete accounting records, including underlying documentation, for at least five years for foreign trusts with resident administrators or trustees. 
Phase 2 Rating Factors Recommendations
     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The process and procedures for the other government authorities to provide information for EOI purposes to the Ministry of Finance has not been specified where no MoU has been concluded between the Ministry of Finance and the relevant authority. In addition, no access powers have been identified in the Fujairah Free Zone.  The UAE should specify the process and procedures by which all government authorities are required to provide information for EOI purposes to the Ministry of Finance when requested to do so and clarify that access powers are available in all instances. 
Except for lawyers who are asked to produce information by the DIFC authorities, the scope of legal professional privilege appears to extend beyond that provided for in the international standards.  The UAE should ensure the application of legal professional privilege does not limit or prevent it from responding to a request for information made pursuant to an international exchange of information request. 
Phase 2 Rating Factors Recommendations
     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The UAE’s arrangements providing for international exchange of information have not been given full effect through domestic law as the extent of the authorities’ access powers has not been clearly specified in all cases.  It is recommended that the UAE ensure it has complete legislation enabling it to give full effect to its EOI agreements. 
Phase 2 Rating Factors Recommendations
     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     The UAE should continue to develop its EOI network, regardless of its form, to the standard with all relevant partners. 
Phase 2 Rating Factors Recommendations
     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.   The definition of information subject to legal professional privilege in the UAE’s DTCs follows that of its domestic law, which is wider than the scope accepted under the international standard.  The UAE should ensure that the scope of legal professional privilege in its EOI mechanisms is consistent with the international standard. 
Phase 2 Rating Factors Recommendations
     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations