Automatic Exchange of Information - FATCA and CRS
What is Automatic Exchange of Information (“AEOI”)?
AEOI is the automatic exchange of financial account information between competent authorities of different jurisdictions pursuant to international agreements as implemented into domestic law to cooperate in the global effort towards tax transparency. The AEOI relating to financial accounts held by individuals, corporations, partnerships, trusts, etc. is effected under the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) regimes.
AEOI under the FATCA and CRS regimes is typically achieved by requiring Financial Institutions (“FIs”) that operate in a particular jurisdiction to provide information on reportable account holders (directly or indirectly) to the relevant competent authority. The competent authority in turn exchanges information on such reportable accounts with the competent authorities in each foreign jurisdiction with which the UAE has entered into an exchange agreement (for the purposes of CRS) and the Internal Revenue Service (“IRS”) (for the purposes of FATCA). The relevant competent authority in the UAE is the Ministry of Finance.
Entities that meet the definition of a Reporting Financial Institution under FATCA and/or CRS and are not under the supervision of (i) the Central Bank of the United Arab Emirates (“CBUAE”); (ii) UAE Securities and Commodities Authority (“SCA”); (iii) Dubai International Financial Centre (“DIFC”) and; (iv) Abu Dhabi Global Market (“ADGM”), are regulated for the purposes of FATCA and CRS by the UAE Ministry of Finance and must register in UAE Ministry of Finance FATCA/CRS filing portal using the below link
Automatic exchange of information portal
For any queries on the new Automatic Exchange of Information Portal, please contact the following:
▪ For technical IT queries: firstname.lastname@example.org
For business queries:
Common Reporting Standard (“CRS”)
The CRS was developed in response to the G20 request by the Organization for Economic Co-operation and Development (“OECD”) during the Global Forum held in Berlin and came into force in October 2014.
The UAE signed the Convention on Mutual Administrative Assistance in Tax Matters (“MAC”), the Declaration of Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (“MCAA”) and the Unilateral Declaration in April 2017.
Both the MAC and MCAA form the legal basis for the implementation of The Standard for Automatic Exchange of Financial Account Information (“AEOI”) in Tax Matters, Second Edition (“OECD Standard”) in the UAE. The MAC was ratified by the UAE according to Federal Law No. 54 of 2018 and the MCAA according to Federal Law No. 48 of 2018.
The OECD Standard sets out the required information to be exchanged, the types of entities required to report, the different types of financial accounts and account holders in scope and the common due diligence procedures to be followed by Financial Institutions (“FIs”).
The CRS went live in the UAE with an effective go-live date of 1 January 2017.
UAE Regulatory Authorities and the UAE MoF have issued UAE CRS legislation (collectively referred to as “UAE CRS Regulations”).
Registration and Reporting
UAE Reporting Financial Institutions (“UAE RFIs”) must report on identified Reportable Accounts (or report that it does not have any such accounts via the provision of a nil return) via the CRS filing portal.
Please contact your Regulatory Authority for information on how to access the CRS filing portal . See Question 3 below for a list of Regulatory Authorities.
CRS further information and guidance
- a. For a list of countries participating in the CRS, please see the published list by the OECD, This may be revised from time to time.
- b. Further guidance published by the OECD can be found in the OECD CRS FAQs published on their website to assist in the implementation of the OECD Standard.
- c. More information on the CRS is available on the OECD CRS webpage, although this material must be considered as a secondary to the UAE CRS Regulations.
- d. For Further Guidance on the effective delivery of the Compliance program for CRS Click Here to watch the Workshop on compliance with the Common Reporting Standard (CRS) in the UAE
The content provided on this webpage does not constitute legal or tax advice. For advice on tax and legal matters, please consult a professional tax or legal advisor.
The content provided on this webpage does not constitute legal or tax advice in respect of the matters set out herein. For advice on tax and legal matters, please consult a professional tax or legal advisor.
Foreign Account Tax Compliance Act (“FATCA”)
FATCA is a United States (“US”) federal law with a global outreach aimed at curbing offshore tax evasion by US persons. It was enacted by the US in 2010. FATCA requires Financial Institutions outside the US referred to as Foreign Financial Institutions (“FFIs”) to report information on financial accounts held by US persons.
The UAE signed an Intergovernmental Agreement with the United States of America on 17 June 2015 with an effective (“go-live”) date of 1 July 2014 (“UAE-US IGA”). The UAE-US IGA is a Model 1B IGA and accordingly does not provide for reciprocal information sharing by the US .
The UAE-US IGA was ratified pursuant to Federal Law No. 9 of 2016 and establishes the framework for the exchange of information between reporting UAE financial institutions (“Reporting UAE FIs”) authority to the IRS. The UAE Ministry of Finance (in its capacity as the UAE competent authority) issued guidance on the UAE-US IGA on 6 July 2015 (“ Guidance Notes”). A copy of the Guidance Notes can be found at the below link.
In the absence of an IGA, UAE Reporting FIs will need to each enter into an agreement directly with the IRS in order to avoid liability for payment of withholding tax under FATCA.
Registration and Reporting
Reporting UAE FIs must report identified US reportable accounts (or submit a notification or nil return that it does not have any such accounts). The UAE-US IGA mandates Reporting UAE FIs to submit the required information on how to access the FATCA filing portal.