UAE Removed from European Union’s Tax Haven Blacklist

The European Union has recently removed the United Arab Emirates from its tax haven blacklist, a list that covers jurisdictions that have failed to cooperate on tax matters. The finance ministers of the European Union made this declaration when the country further enhanced its transparency in tax procedures. Along with the UAE, seven other countries such as Barbados, Grenada, South Korea, Macao, Mongolia, Tunisia and Panama were also removed from this ban. Jurisdictions that remain blacklisted are Belize, Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three US territories of American Samoa, Guam and the US Virgin Islands.

The European Union officials mentioned that the underlying reason behind this ban removal was the country’s recent adoption of rules for offshore structures to ensure better transparency on tax practices. Currently, the UAE government charges no corporate taxes, and this attracts several foreign investors to set up their firms in the UAE so that they do not have to pay taxes in their native countries. Normally the EU does not automatically add countries that charge no tax to the blacklist, however, it requested the UAE government to introduce rules which would permit only companies with economic activity in the region, to be incorporated for minimizing the tax evasion risks.

The European Union’s decision of removing the UAE from the tax haven blacklist is a great example of the recognition given to the country’s effective tax system and promising governing model. Sectors such as real estate, healthcare, education, logistics and retail will significantly benefit from this initiative.

If you wish to know more about company setup in the UAE, please do not hesitate to contact us on  +971 55 843 2911 or drop an email to info@corpinconsultants.com for a free consultation.