Abu Dhabi: The UAE, represented by the Ministry of Finance (MoF), signed on Tuesday a Memorandum of Understanding (MoU) on the application of international standards with the Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes, at the Ministry’s headquarters in Abu Dhabi.
This was carried out in line with MoF's membership in the committees of the Global Forum on Transparency and Exchange of Information for Tax Purposes and in efforts to implement the resolutions of the G20 The MoU was signed by Majid Ali Omran, Director of International Financial Relations, and Monica Bhatia, the Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
The signing was timed to coincide with the actions taken by the Global Forum in implementing the second phase of its work.
This phase focuses on the importance and effectiveness of transparency and exchange of information practices to ensure the correct application of tax conventions.
Moreover, the MoU gives the UAE the advantage of hosting a series of seminars on international standards of transparency and exchange of information for tax purposes between the MENA region and other countries.
These seminars will enable the development and implementation of a transparent environment that enhances international cooperation in tax matters.
Commenting on the signing of the memorandum, Younis Haji Al Khouri, Undersecretary of MoF, elaborated on the positive role played by tax conventions on stability and global economic prosperity, and said: “The signing of the MoU with the Head of Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes enhances the prestigious economic and political position of the UAE internationally. Additionally, the provisions of this agreement 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.”
“The UAE won a seat at the International Steering Committee for the exchange of information as the first Arab country to be elected to this position. This achievement is a result of its constant active efforts as a member in the Forum in addition to its commitment to international standards for the exchange of information,” he added.
According to the call of G20 and the Organisation for Economic Co-operation and Development (OECD) for all countries to join the Global Forum on Transparency and Exchange of Information for Tax Purposes, which was established in 2009, the Ministerial Council for Services issued decree No. (45/4G / 4) for 2010.
The decree handles the UAE membership in the Forum, which includes 104 countries that seek to confirm thier commitment to the standards of international transparency and exchange of information for tax purposes.
Moreover, the Forum is responsible for evaluating countries to determine the extent of their commitment to applying international standards for the exchange of information, through the debate committee. It should be noted that the G20 takes action against non-cooperative countries, countries with tax havens and countries that do not abide by international standards for the exchange of information.
They may be prevented from accessing the Group's negotiations on the avoidance of double taxation or unrelated tax actions.
This penalty is practiced to encourage financial institutions to terminate their relationship with those countries.