On 27 June 2018, the UAE signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), aimed at reducing international tax planning strategies that have the effect of artificially shirting profits to low or no-tax locations where there is little or no economic activity. As a member of the Economic Development and Cooperation (OECD) BEPS, the UAE is committed to ensure that its legal and commercial framework is in line with global standards and is subject to review by the OECD to ensure that these standards are implemented.
Adopted in 1997, the European Union (EU) Code of Conduct for Business Taxation is a political commitment by EU member states and third countries to curb harmful tax practices.
In response to the above global standards, the UAE has enacted the Federal Economic Substance Regime, comprising of:
- Cabinet Resolution No. 31 of 2019 concerning Economic Substance Regulations, as amended by Cabinet Resolution No. 7 of 2020 (Regulations)
- Ministerial Decision No. 215 of 2019 (Guidance)
- Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies
The objective of this Outreach Session is to discuss the operation of the UAE Economic Substance Regime in ADGM.