10th May 2017
Regular readers of our blogs will have seen multiple stories relating to the Common Reporting Standard and the truly enormous range of countries that have now committed to it. And most recently the UAE became the 109th nation to sign what the OECD calls ‘the most powerful multilateral treaty against offshore tax evasion and avoidance,’ on Friday.
UAE commits to treaty
At the Paris headquarters of the OECD the UAE ambassador to France signed the multilateral convention on mutual administrative assistance in tax matters, or the Common Reporting Standard as it’s become more popularly known.
The convention, which allows for the automatic exchange of information with the UAE’s commitment will begin by 2018. It provides for all forms of administrative assistance in tax matters including requested and spontaneous exchanges of information, simultaneous tax examinations and assistance in tax collection.
This news is likely to affect hundreds of agencies as the UAE has become somewhat of a contracting hotspot in recent years. Aside from professionals operating in the oil and gas industries, talent in markets including finance, real estate and transport are lured to the region through the promise of high salaries, the chance to work for truly global firms and of course, the weather.
However, while the UAE’s commitment to the treaty is encouraging, it can also create numerous issues for agencies placing talent in the state. Information being exchanged automatically means that even an inadvertent law breach in another country can result in contractors and firms landing in serious hot water in their nation of residence and facing major penalties, fines or even prison sentences for those found guilty.
With the new ruling coming into place next year, it’s unlikely that firms will have their affairs in order to legally place talent in the UAE, meaning they’re taking an unneccesary and significant risk. And unless organisations can handle the types of multi-million pound fines given to firms including Apple and Ryanair, they will want to ensure that they’re operating completely compliantly before it’s too late. Fortunately, we’re here to help and if you’re at all unsure about your status when placing professionals around the world, get in touch with the experts.