29th March 2017
The UAE and India are two of the main contracting hotspots outside of Europe so a recent article on the UAEs plan to up its fight against tax evasion caught our eye. The Middle Eastern nation has announced plans to share financial information with Indian authorities about anyone hiding wealth in Dubai. So what does this involve and what does it mean for professionals working here and the agencies that place them?
Hiding wealth in Dubai is getting harder
It’s no secret that, despite having a competitive tax structure, many professionals in India have used offshore bank accounts or shell companies based in Dubai to evade tax obligations. However the recent announcement that the UAE is stepping up its game when it comes to tax evasion means that this practice could become far more challenging from January next year when Dubai will start sharing information with India.
Banks in Dubai have already started taking steps to ready themselves and it has been reported that they are starting to ask for extra information such as tax ID and passport copies of existing account holders. Those who have failed to disclose these bank accounts to the Indian authorities could land themselves in trouble with tax authorities come January. As a result, it has been reported that several individuals are relying on ‘insurance wrappers’ and the services of nominee directors to ensure that they don’t have to face tax penalties and potential prosecution when the new sharing policy comes into force.
Remaining compliant
It appears that there will always be ways for individuals to take advantage of loopholes such as those mentioned above. However with governments all over the world taking a firm stance on tax evasion the clock is certainly ticking for those intent on hiding their wealth. For contractors and agencies operating overseas, the message is clear. You must be aware of any changes to the tax system to ensure you remain fully compliant. Failure to do so could land you in hot water. If you’re ever in doubt, speak to a specialist that knows the legislative landscape inside and out.
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