The Global Forum on Transparency Agreements of exchanging tax information: Objectives and Achievements
Based on the Ministry of Finance (MoF) belief that agreements on exchanging tax information play a key role in the achievement of transparency, justice and the protection of the national economy, MoF is keen to grow its network of such agreements. These agreements also strengthen the stature of the UAE as a global financial and trade hub in the international arena, as the provisions of the agreements demanded by the Global Forum on Transparency provide a legal framework for the tax authorities to practice cross-border cooperation without violating the sovereignty of other states or the rights of taxpayers.
Since its establishment in 2009 by G20 and OECD, the Global Forum on Transparency and Exchange of Information for Tax Purposes has become the key international body working on the implementation of information exchange international standards. This was due to the fact that tax evasion had emerged to become a threat to governments' revenues in the light of globalisation, which offers economic benefits associated with risks.
To avoid these risks, there was an urgent need to strengthen international cooperation in the field of information exchange, so that tax evaders would be unable to hide their wealth and assets any longer. In order for countries to be able to exchange such information, a legal reference had to be found by concluding bilateral agreements on the avoidance of double taxation.
Based on the Ministerial Council for Services Resolution NO (4/45خ/4) of 2010, the UAE joined the Global Forum which currently has 104 members. The forum evaluates country performance and their commitment to the standards of transparency and exchange of information by the Peer Review Committee through two phases:
- Phase 1 includes evaluating laws and frameworks governing the process of exchanging information.
- Phase 2 includes a practical implementation of the exchange of information and transparency principles according to international standards, and evaluating to which extent laws conform with guiding criteria of the forum.
Forum membership is open to all countries. However, countries are divided into three groups depending on the extent of their commitment to transparency standards:
- Countries committed to implementing the standards/White list
- Countries committed to implementing the standards but in need of technical assistance/Grey list
- Countries not committed to implementing the standards/Black list
Failure to commit to transparency standards will deprive countries from the investments of the G20 Industrial Nations.
The UAE joins the forum
The Ministry of Finance signed a Memorandum of Understanding (MoU) with OECD to build a partnership with regard to taxation matters, whereby the UAE has become a training hub for MENA for the exchange of information and building a qualified and active network of tax experiences among the countries of the region. The UAE joined the Global Forum on Transparency in 2010 and participated in its various meetings.
The UAE commenced the review of tax transparency phase in 2011, achieving good results and submitting the required legal documents. The UAE was the first Arab country to win a seat on the International Steering Committee, and in 2014 the Global Forum decided that the UAE will move forward to the second phase of evaluation which ends in 2017 at the latest.
MoF signed a MoU with the Global Forum Secretariat on the legal and practical implementation of the international standards of transparency. MoF also held meetings with various stakeholders in the country to guide them through implementing the recommendations outlined in the ‘Evaluation of the UAE’ report about information exchange. MoF's efforts come in line with the Cabinet Resolution No. 17 of 2012, whereby the ministry is authorised to collect and exchange information and data on natural persons and legal entities licensed to operate in the UAE, including free zones.
Eight MoUs were signed in this regard with:
- Central Bank of the UAE
- Dubai International Financial Centre (DIFC)
- Jebel Ali Free Zone (Jafza)
- Dubai Multi Commodities Centre (DMCC)
- Fujairah Free Zone Authority
- Ras Al Khaimah Free Trade Zone (RAK FTZ)
- Ras Al Khaimah Investment Authority (RAKIA)
- Umm Al Quwain Free Trade Zone Authority
Based on the strategic partnership between the UAE and OECD, MoF signed an extended MoU for a fourth period 2016-2018. It also organised a number of introductory workshops on the exchange of tax information, which witnessed the participation of tax experts from all over the world.
These workshops discussed the common international standards in the field of tax reports, implementation mechanisms and approved legal frameworks. The aim was to develop a system for automatic exchange of tax information while complying with the rules of confidentiality of the exchanged tax information, and protecting such information from risks to avoid any negative consequences on the relevant stakeholders.
The legal framework of information exchange includes the following international agreements:
- Avoidance of Double Taxation
- Exchange of Information for tax purposes
- Mutual administrative assistance
Exchange of Information mechanism includes the following:
- Information Availability
- Information Accessibility
- Exchange of Information
HE Khalid Ali Al Bustani
Assistant Undersecretary for International Financial Relation Sector
Mr. Majid Ali Omran
Director of International Financial Relation Department
Mr. Abdullah Ahmed Al Obaidi
Head of the Exchange of Tax Information Unit
Asma Al Zarooni
Expert - Tax Information Exchange
To contact and submit applications:
Send application by postal mail:
MoF - International Financial Relation Department
Exchange of Tax Information Unit
Al Ghubaiba Road, Dubai – PO Box 1565
Phone: +971 4 3110601
Send a copy of the application to the following e-mail address:
Please be advised that the original application must be sent by postal mail and sending a copy by e-mail may accelerate the processing of the application. There are required procedures to ensure confidentiality.
| Country || Final signing |
|Denmark || 4/11/2015 |
|Faroe Islands||2/5/2016 |