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KARACHI: Banks in the United Arab Emirates have started issuing an advisory to their foreign customers about implementation of a new global transparency policy that requires their tax details in their own country in a move to fight cross-border tax evasion and put an end to banking secrecy in tax matters, local media reported on Tuesday.
It said the new regulation is part of the common reporting standard (CRS), also referred to as the global Fatca, which stands for Foreign Account Tax Compliance Act in the United States.
“Countries around the world have been looking for ways to track down and monitor tax-delinquent residents overseas. Offshore tax abuse is reportedly costing America alone $100 billion a year,” said one of the media reports. “The CRS aims to foster an exchange of information between countries regarding expatriate or individual bank accounts, interest, dividends or incomes earned outside their home country.”
In compliance with the global tax compliance regulation, financial institutions in the UAE will start collecting the necessary tax-related information from customers from January 1, it said.
“From the beginning of January 2017, governments will start requiring all banks and other financial institutions to ask customers for information with a view to determining where they are resident for tax purposes,” said the largest foreign bank operating in Dubai in its letter to its customers, according to the report in the Gulf News.
“[The bank] is committed to protecting the integrity of tax systems and preventing financial crime of all types and will fully comply with these new laws. Therefore, from the beginning of 2017 onwards, we will be contacting some of our customers to collect information related to their tax status.”
The report said the countries currently participating in CRS include Argentina, Belgium, Bermuda, British Virgin Islands, Cayman Islands, the Czech Republic, France, Germany, Greece, Guernsey, India, Ireland, Isle of Man, Italy, Jersey, Luxembourg, Malta, Mexico, Netherlands, Poland, South Africa, South Korea, Spain, Sweden, United Kingdom, Australia, Bahamas, Bahrain, Brazil, Brunei, Darussalam, Canada, Chile, China, The Cook Islands, Hong Kong, Indonesia, Israel, Japan, Macau, Malaysia, Mauritius, Monaco, New Zealand, Panama, Qatar, Russia, Saudi Arabia, Singapore, Switzerland, Turkey, UAE and Uruguay.
Published in Dawn December 14th, 2016
