The United Arab Emirates will implement a new global transparency policy which will bring to an end baking secrecy in tax related matters. The policy that goes into effect starting 2017 aims to help curb cross-border tax evasion.
Globally countries have been trying to find ways to trace and monitor tax-evading nationals overseas. Tax abuse has been costing the United States of America approximately $100 billion annually.
In order to curb tax-evasion a new reporting procedure has been implemented known as the common reporting standard (CRS). It is similar to the FATCA or Foreign Account Tax Compliance Act in the United States.
Meanwhile the CRS is being led by the Overseas Economic Cooperation and Development (OECD); among the signatories of the CRS are India, United Kingdom, Canada, Lebanon, Indonesia, Mexico and the European Union.
The new standard will rely on exchange of information between countries regarding individual and expat bank accounts, as well as details about interest, dividend incomes earned outside of their home country.
“Tax cheats have nowhere left to hide,” said Angel Gurria OECD Secretary General at the CRS launch.
Meanwhile HSBC informed its customers earlier this month that starting “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,” adding that HSBC “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 CRS currently has 25 countries participating in the program including tax havens such as Bermuda, the British Virgin Islands and the Cayman Islands to name a few.
Starting 1st January 2017, Australia, Bahamas, Bahrain, Brazil, Brunei, Darussalam, Canada, Chile, China, The Cook Islands, Hong Kong, Indonesia, Israel, Japan, Kuwait, Lebanon, Macau, Malaysia, Mauritius, Monaco, New Zealand, Panama, Qatar, Russia, Saudi Arabia, Singapore, Switzerland, Turkey, UAE and Uruguay will joint the list of participating countries.