Does Dubai Share Tax Data, Property Ownership, Bank Balances, or Financial Data with the EU?

Due to international intergovernmental agreements, such as double taxation treaties and EU directives, the exchange of tax-relevant information between different countries takes place. For example, many countries transmit financial information about capital income of non-residents to their home countries.

If, for instance, you hold an account in Liechtenstein or Cyprus, the banks there are required to report the capital income earned to the European authorities. This information is centrally collected in Germany and then forwarded to the relevant local tax offices. This process is designed to combat tax fraud and tax evasion, particularly concerning cross-border capital income. The aim is to ensure fair taxation and effective monitoring of tax compliance in international matters.

However, the exchange of financial data is regulated through the CRS system. Authorities in Dubai report data to European tax offices via the Common Reporting Standard (CRS) system. CRS is a global standard for the automatic exchange of financial account information (AIA), developed by the Organisation for Economic Co-operation and Development (OECD). Under CRS, financial institutions collect information on accounts held by foreign nationals and report this to their local tax authorities, which then automatically exchange the information with the tax authorities of the countries where the account holders are tax residents. This also includes exchanges between Dubai (part of the United Arab Emirates) and EU countries, provided both countries have agreed to comply with CRS agreements and the necessary legal and administrative frameworks are in place.

Relevant EU regulations regarding the automatic exchange of financial account information will be illustrated using the regulations for Germany. Here, the Financial Account Information Exchange Act (FKAustG), which came into effect on December 21, 2015, applies.

The collection and transmission of the information necessary for the exchange are carried out by financial institutions such as custodians, deposit banks, investment companies, and certain insurance companies in accordance with § 19 Nos. 3–6, 8 FKAustG to the Federal Central Tax Office.

As of 2017, the reported information includes the following categories:

  • Financial accounts opened by December 31, 2015, are considered existing accounts.
  • Financial accounts opened after January 1, 2016, must be labeled according to the new regulations.

These regulations apply to both individual and legal entity accounts, including trusts and foundations. For legal entities, controlling persons must also be reported if they are subject to the reporting obligation.

The following data are exchanged, according to FKAustG §§ 6, 8, 9, 19:

  • Name
  • Address
  • Country of residence
  • Tax Identification Number
  • Date of birth
  • Place of birth
  • Account number
  • Name and identification number of the financial institution
  • Account balance
  • Interest, dividends, and other income

This primarily applies to non-residents of the UAE for tax purposes. Since 2017, data on bank customers in the UAE has been centrally collected and subsequently transmitted annually to Germany.

It should be noted that UAE authorities have made increasing efforts in recent years to promote transparency.

Since the beginning of 2024, the UAE has no longer been on the “Grey List” of the Financial Action Task Force (FATF). Although this primarily pertains to money laundering and shadow financing, the flow of information in these matters is similar.

The UAE was removed from the EU’s “Blacklist” of tax havens years ago.

Currently, two NGOs list the UAE as a tax haven (Oxfam and the Tax Justice Network). However, countries like the Netherlands, Canada, Switzerland, and the USA are also included, suggesting that the criteria used here may be disproportionately stringent.

Nevertheless, investors are free to create advantageous investment structures in line with national laws. This can include holding or trust structures, or the acquisition of real estate, funds, or companies (with their own manager).

Further Links

BZSt – Common Reporting Standard
Automatischer Informationsaustausch über Finanzkonten (admin.ch)
6 FKAustG – Einzelnorm (gesetze-im-internet.de)
Automatischer Austausch von Informationen über Finanzkonten in Steuersachen nach dem Finanzkonten-Informationsaustauschgesetz – FKAustG (bundesfinanzministerium.de)
RICHTLINIE 2014/•107/•EU DES RATES – vom 9. Dezember 2014 – zur Änderung der Richtlinie 2011/•16/•EU bezüglich der Verpflichtung zum automatischen Austausch von Informationen im Bereich der Besteuerung (europa.eu)

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