29 November, 2019
EU Removes UAE from TAX Haven Blacklist
Recently, the Finance ministers of the European Union agreed to remove the UAE from its tax blacklist. The list of countries were deemed by the EU to be those that many considered as “tax havens”.
Countries were enumerated on the blacklist by the EU on the basis of cooperation extended to them. As a result, any country that does not provide adequate cooperation to the EU on tax matters were also found to be on the blacklist.
UAE does not charge any corporate taxes, and this attracts firms who intend to avoid paying tax in the country of operation.
The UAE recently spruced up its rules governing offshore entities. Also, the UAE took cognizance of the EU recommendation to allow only “active” companies to be incorporated. These active companies would have real economic activity, and not setup for the purpose of tax evasion.
The EU observed the regulatory refinement of UAE as positive initiatives, and responded by removing UAE from their blacklist.
Apart from the UAE, Switzerland and Mauritius were some of the other countries to be removed from the blacklist by the EU.