The United Arab Emirates will be removed from the European Union blacklist of countries deemed to be tax havens, according to a Reuters report citing an official EU document.

The document allegedly states that the UAE, along with Switzerland and the Marshall Islands, will be removed from the list (officially called “The EU list of non-cooperative jurisdictions for tax purposes”) at an upcoming meeting of finance ministers on October 10th.

That would leave nine jurisdictions on the list: Belize, Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three U.S. territories of American Samoa, Guam, and the U.S. Virgin Islands.

The UAE was originally added to the list on 12th March 2019. This initiated the introduction of Economic Substance Regulations to align the Emirates with other jurisdictions that have recently issued similar legislation (e.g. Cayman Islands, Bermuda, Mauritius) in an effort to address the concerns around the shifting of profits derived from certain activities to nominal tax jurisdictions without any local economic activities.

The removal of the UAE would be a hugely positive step for the economy; nations on the blacklist face reputational damage and stricter controls on transactions with the EU, and overcoming this obstacle will no doubt cement Dubai as one the of the most important financial centres in the world. It will also facilitate compliance with Economic Substance Regulations for any entities that might be affected, as “place of effective management” requirements can now be fulfilled inside the UAE. Please contact us for more details.