UAE Disappointed Over Inclusion In EU’s Tax Haven Blacklist

United Arab Emirates
(Photo: REUTERS/Satish Kumar)

The United Arab Emirates expressed disappointments as it was blacklisted by the European Union. The addition to the list means that the EU believes the said Arab country is one of the tax havens where the rich can go to in order to avoid paying taxes.

Among the Arab nations, the UAE placed second in terms of how progressive its economy is so being blacklisted by the EU is like a slap in the face. Moreover, the UAE cannot understand why they were included in the list when they tried their best to comply with the tax regulations set by the European Union. 

In a statement issued by UAE, it relayed the fact that the government "shared with the EU a detailed timeline of actions that it is currently implementing in accordance with its sovereign legal process and constitutional requirements," however UAE stated they were denied an extension for their tax reform plan to be fully implemented, Channel News Asia reported. 

The United Arab Emirates further stated, "The UAE remains firmly committed to its long-standing policy of meeting the highest international standards on taxation. We will continue to update its domestic legislative framework in this regard."

In any case, the UAE is one of the 10 countries that were recently added to the alleged tax haven list, a record that was created in 2017 in an effort to curb tax evasion instances that were found to be commonly practiced by wealthy businessmen. Being blacklisted means that companies and residents of the UAE will be subjected to further scrutiny when carrying out financial transactions in the European bloc.

The other nations that were blacklisted along with UAE include the Dutch Caribbean island of Aruba, Fiji, Barbados, Oman, Belize, Vanuatu, the British overseas territory of Bermuda, the Marshall Islands and Dominica. The addition of these countries tripled the number of nations considered to be tax havens.

The 10 newly added countries joined Guam, Samoa, U.S. Virgin Islands, Trinidad, and Tobago. These countries face reputational damages although the EU body has not agreed on sanctions yet.

The EU blacklist a nation if it discovered that its tax rules have loopholes that could make way for tax evasion to occur. If a nation revamps its tax rules on a set deadline, which is normally one year, then it is removed from the list. Pierre Moscovici, EU's tax commissioner stated that the blacklisting system is successful because it drives countries to put an end to cases of "harmful tax regimes."

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Sign Up for Newsletters and Alerts