The Ministry of Finance (MoF) announced the approval by the UAE Cabinet of the agreement on mutual administrative assistance in tax matters (MAC) and the Multilateral Competent Authority Agreement (MCAA). Broadly speaking, the MCAA is based on Article 6 of the MAC and is one of the available legal basis to establish the exchange relationships between jurisdictions. It specifies the details of what information should be exchanged and when such exchanges should occur.
This approval is a significant step towards the effective implementation of the automatic exchange of information in the UAE and reaffirms the country’s commitment to greater tax transparency. HE Obaid Humaid Al Tayer, Minister of State for Financial Affairs, commented: “The UAE achieved a significant shift in the second phase of evaluation. The Ministry takes into consideration all remarks given by evaluators, and works on a plan to meet the requirements and criteria to be able to provide a report that supports the Global Forum on Transparency and Exchange of Information by July 2017.
These efforts reflect the Ministry’s commitment to rate as ‘largely compliant’ or ‘compliant’, and reaffirm the UAE’s commitment to implement the automatic exchange of information by 2018.” The UAE’s firm commitment to follow the transparency path and effectively implement taxes is also supported by the recent announcement of the establishment of a Federal Tax Authority, the legal framework of which is set by the Federal Decree-Law No. 13/2016.
We are now waiting for a domestic legislation to be enacted and a specific channel for transmission to be put in place, which guarantees a sufficient level of confidentiality and data safeguards. Once all these are in place, the UAE should be ready to sign the agreements and activate the bilateral exchange relationships in line with the Common Reporting Standard (CRS).
As of writing, there are already over 1000 effectively established bilateral exchange relationships with respect to jurisdictions committed to CRS as from 2017.
