Legislation Details
- Full Title: Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information
- Law Type: Cabinet Resolution
- Law Number: 93 of 2021
- Issued Date: 10 Oct 2021
- Effective Date: [not specified]
- Official Gazette: No. 713
- Sector: Finance and Banking
- Status: Active
- Number of Articles: 33
- Chapters/Parts: 0
- Amendments: [not specified]
Summary
This Cabinet Resolution implements certain provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, which was ratified by the UAE in 2018. The Resolution establishes the regulatory framework for the automatic exchange of financial account information between the UAE and other participating jurisdictions. It defines the roles and responsibilities of the Competent Authority (Ministry of Finance) and Regulatory Authorities (Central Bank, Securities and Commodities Authority, Financial Free Zone Authorities) in implementing the Common Reporting Standard. The Resolution also imposes reporting and record-keeping duties on Reporting Financial Institutions and specifies administrative penalties for non-compliance. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021) The practical impact of this legislation is to enhance tax transparency and combat cross-border tax evasion by requiring financial institutions in the UAE to identify and report on financial accounts held by foreign tax residents. This aligns the UAE with global standards for the automatic exchange of financial account information and demonstrates the country's commitment to international tax cooperation. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to implement certain provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, which the UAE ratified in 2018. The purpose is to establish the regulatory framework and requirements for the automatic exchange of financial account information between the UAE and other participating jurisdictions. The Resolution applies to Reporting Financial Institutions in the UAE as well as Account Holders and Controlling Persons who hold reportable accounts with those institutions. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 2)
What are the key definitions under this law?
The key definitions under this Resolution include:
- State: The United Arab Emirates
- Agreement: The Multilateral Administrative Agreement for Automatic Exchange of Information
- Common Reporting Standard (CRS): The global standard for the Automatic Exchange of Financial Account Information issued by the OECD
- Competent Authority: Ministry of Finance
- Regulatory Authorities: The authorities specified in Article 3
- Financial Institution: As defined in the Regulation issued by the Regulatory Authority
- Account Holder: As defined in the Regulation issued by the Regulatory Authority
- Controlling Person: As defined in the Regulation issued by the Regulatory Authority
(Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 1)
What are the main obligations and requirements?
The main obligations and requirements under this Resolution include: 1. Reporting Financial Institutions must collect the information required to be reported under the Agreement, CRS, and this Resolution, and report such information to the Competent Authority. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 4(1)) 2. Reporting Financial Institutions must submit a "Report on Reportable Accounts" to the Competent Regulatory Authority by the date specified. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 4(2)) 3. Reporting Financial Institutions must notify the Competent Regulatory Authority if they do not have any reportable financial accounts ("Nil Return") by the specified date. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 4(3)) 4. Reporting Financial Institutions must establish and implement internal systems and procedures to comply with the requirements of this Resolution and any related Resolutions, Rules or Regulations. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 4(4))
Which authorities or bodies are responsible for enforcement?
The key authorities responsible for enforcement under this Resolution are: 1. The Central Bank of the UAE, Securities and Commodities Authority, Financial Free Zone Authorities, and the Ministry of Finance are designated as the Regulatory Authorities. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 3(1)) 2. The Regulatory Authorities are responsible for issuing regulations, directives, and due diligence procedures; collecting and reviewing information; conducting reviews and investigations; imposing administrative fines; and managing grievance procedures. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 3(2)) 3. The Federal Tax Authority is entrusted with implementing certain tasks of the Ministry of Finance as a Regulatory Authority, including audit procedures, imposing fines, and managing grievance procedures. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 3(3))
What are the penalties for non-compliance?
The Resolution imposes the following administrative penalties for non-compliance: 1. A fine of AED 20,000 on the Account Holder or Controlling Person for submitting incorrect or false personal information. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 5(1)) 2. A fine of AED 1,000 on the Reporting Financial Institution for opening an account without obtaining or verifying the personal information statement. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 5(2)) 3. Fines ranging from AED 50,000 to AED 100,000 on the Reporting Financial Institution for failing to submit the "Report on Reportable Accounts" or the "Nil Return" by the specified deadlines. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 5(3)) 4. Fines ranging from AED 5,000 to AED 100,000 on the Reporting Financial Institution for submitting incomplete or false information in the required reports. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 5(4)) 5. A fine of AED 40,000 on the Reporting Financial Institution for failing to maintain the required records. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Art. 5(5))
How does this law interact with other UAE legislation?
This Cabinet Resolution is issued pursuant to and in implementation of the following UAE laws and regulations: - Federal Law No. (1) of 1972 Regarding the Competences of the Ministries and the Powers of the Ministers - Federal Law No. (8) of 2004 Regarding the Financial Free Zones - Federal Law No. (14) of 2016 Regarding Administrative Violations and Penalties in the Federal Government - Federal Decree by Law No. (15) of 2018 Regarding the Collection of Public Revenues and Funds - Federal Decree No. (48) of 2018 ratifying the Multilateral Administrative Agreement for Automatic Exchange of Information - Cabinet Resolution No. (17) of 2012 Regarding the Collection and Exchange of Information for the purpose of implementing International Tax Agreements - Cabinet Resolution No. (5/11) of 2020 Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021, Preamble)
When did this law come into effect?
The legislation does not specify an effective date for this Cabinet Resolution. It was issued on 10 October 2021 and published in the Official Gazette No. 713 on 14 October 2021. (Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information, 2021)
Source Documents
This article analyses Cabinet Resolution Regarding the Implementation of Certain Provisions of the Multilateral Administrative Agreement for Automatic Exchange of Information for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.