EU drops UAE from tax blacklist, keeps US islands

Above, the Dubai International Financial Center on Sheikh Zayed Road on October 2, 2019. (AFP)
Updated 04 October 2019

EU drops UAE from tax blacklist, keeps US islands

  • The UAE adopted new rules on offshore structures in September
  • However the EU will continue to blacklist three US territories

BRUSSELS: European Union finance ministers are set to remove the United Arab Emirates next week from the bloc's lists of countries deemed to be acting as tax havens, an EU document said.

They will however continue to blacklist three US territories of American Samoa, Guam, and the U.S. Virgin Islands.

The UAE, the largest financial center still on the list, is due to be removed at a meeting on Oct. 10 because it adopted new rules on offshore structures in September, the EU document said.

The Gulf state charges no corporate taxes, making it a possible target for firms seeking to avoid paying tax in the countries where they actually operate.

The EU does not automatically add tax-free countries to its list, but to reduce the risk of tax dodging it had requested that the UAE introduce rules that would allow only companies with a real economic activity there to be incorporated.

The 28-nation EU set up a blacklist and a grey list of tax havens in December 2017 after revelations of widespread avoidance schemes used by corporations and wealthy individuals to lower their tax bills.

The lists are regularly reviewed to take account of overhauls or to add new jurisdictions.

The inclusion of US territories on the list has long been a source of friction with Washington. The tussle could escalate further after a bilateral trade war erupted this week over illegal EU aircraft subsidies.

Blacklisted states face reputational damage and stricter controls on transactions with the EU.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.