International Tax Reporting

The UAE signed the Multilateral Convention (“MLI”) to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“BEPS”) issued by the OECD on 27 June 2018. The MLI allows signing jurisdictions to implement amendments to their mutually selected Double Tax Agreements (“DTAs”) in a consistent manner.

The UAE has adopted the BEPS four minimum standards being Actions 5 (Harmful Tax Practices), 6 (Treaty Abuse), 13 (Country by Country Reporting) and 14 (Dispute Resolution); the details of those regulatory reporting requirements are addressed below:

• Cabinet of Ministers Resolution No. (63) of 2022 Concerning the Implementation of Federal Decree No. (9) of 2016 Ratifying the Agreement between the Government of the United Arab Emirates and the Government of the United States of America to Improve International Tax Compliance and to Implement the Foreign Account Tax Compliance Act (FATCA) - Arabic, English
• The Cabinet of Ministers of the UAE accordingly enacted Resolution No. 93 of 2021 concerning implement Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information which repeals Cabinet Resolution No. (5/11) of 2020 - (Arabic), (English)
• The Cabinet Resolution (57) of 2020 Concerning Economic Substance requirements concerning the Economic Substance Regulations taking into account the global standards developed by the OECD and EU. The global standard set by the OECD Forum on Harmful Tax practices (FHTP) requires companies to have substantial activities in a jurisdiction.
• The Cabinet of Ministers of the UAE enacted Resolution No. 44 of 2020 concerning Prevent Base Erosion and Profit Shifting (“BEPS”), BEPs Action 13 (Country by Country Reporting)

For additional information and guidance on Economic Substance requirements you are recommended to visit Registration Authority’s Economic Substance webpage. For further information on Country by Country Reporting, it is recommended that you visit: MOF - Country by Country Reporting.

Any company meeting the reporting threshold for this requirement must report directly to MOF on this issue.

FATCA promotes cross-border tax compliance by implementing an international standard for the automatic exchange of information related to US taxpayers. FATCA regulations require tax authorities to obtain detailed account information for US taxpayers on an annual basis.

FATCA is intended to increase transparency for the Internal Revenue Service (IRS) with respect to US persons that may be investing and earning income through non-US institutions. While the primary goal is to gain information about US persons, FATCA imposes tax withholding where the applicable documentation and reporting requirements are not met.

FATCA TIN Requirements

This document is a new requirement from the Internal Revenue Service (IRS), received via the UAE Ministry of Finance, that is applicable for Reporting Periods 2017-2019.

Notification of collection of information under the Common Reporting Standard

The UAE commenced the reporting of information for tax purposes, pursuant to the OECD's Common Reporting Standard (CRS), in 2018. This followed the UAE Cabinet's decision for the Ministry of Finance (MoF) to co-ordinate with various government authorities and financial services regulators (including the ADGM Registration Authority and the ADGM FSRA) in order for financial institutions to collect information when implementing the UAE CRS obligations. To facilitate these reporting requirements, the MoF became a signatory to the Mutual Administrative Assistance in Tax Related Matters (MAC) and the Administrative Multilateral Competent Authority Agreement (MCAA). At that time, MoF required the relevant government authorities to issue regulations for financial institutions for the collection and reporting of this information. MOF provided guidance notes and draft regulations on CRS to assist all financial institutions to better understand the collection and reporting obligations. The UAE joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in 2010.

CRS, developed by the Organisation for Economic Cooperation and Development (OECD), is a global reporting standard for the automatic exchange of information (AEoI). The goal of CRS is to allow tax authorities to obtain a clearer understanding of financial assets held abroad by their residents, for tax purposes.