Representatives of the UAE Ministry of Finance and of the “free zone” Abu Dhabi Global Market (ADGM) signed a memorandum of understanding on the automatic exchange of information (AEoI) for tax purposes.
As explained in a release from the Ministry of Finance, the agreement addresses the parties’ commitment to implement international standards and requirements for AEoI for tax purposes and to establish a basis for cooperation in order to implement any requirement under any international tax agreement, among other items.
The memorandum of understanding (MoU) states that the ADGM will register all financial institutions within the free zone and then provide data on an annual basis by means for an automated system as well as develop and implement the FATCA reporting system for the collection of information for tax purposes.
The MoU is solely for the purpose of allowing the ADGM to act as an agent to collect information from financial institutions registered in the free zone and then to consolidate and report the same information to the UAE Ministry of Finance which will then report the information to the IRS (the U.S. tax authority, the Internal Revenue Service).
In the UAE, there are currently are five regulatory (collecting) agents—the Dubai International Financial Centre, the UAE Central Bank, the Securities and Commodities Authority and Insurance Authority, and the Abu Dhabi Global Market.
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