Dh20,000 fine warning in UAE: Have you received this e-mail from your bank?

Based on finance ministry guidelines, banks will have to report violations within 30 days after they are detected

by

Kirstin Bernabe

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Published: Fri 25 Aug 2023, 9:27 AM

Last updated: Fri 25 Aug 2023, 10:11 PM

A major bank in the UAE has sent out an advisory to some of its customers, urging them to ensure compliance with tax transparency regulations.

In an e-mail sent out on Thursday evening with an 'Important information' subject line, Emirates NBD Bank explained the requirements under the global tax transparency initiative called Common Reporting Standard (CRS) and what customers have to do to comply.


Under the CRS — which has been set by the Organisation for Economic Cooperation and Development (OECD) — financial institutions are "required to determine where (customers) are tax resident of and to hold accurate and up-to-date information about (their) tax residency and that of controlling persons (where applicable)".

As part of regulations, bank customers have to declare their tax residency, submit supporting documents, and fill out a 'self-certification form'. Emirates NBD noted that the requirements will have to be submitted "no later than 30 days" from the date of the e-mail.


Account-holders have to ensure all information is accurate; otherwise, a Dh20,000 fine shall be imposed, the bank said.

The penalty falls under the UAE Ministry of Finance's (MoF) regulations for the CRS implementation in the country.

Based on the MoF guidelines, banks and financial institutions will have to report the violation within 30 days.

What is self-certification?

Explaining details of the policy in an FAQ, Emirates NBD said "self-certification" is the process through which the bank gathers information about a customer's tax status.

"If you open a new bank account, invest in new financial products, or if we observe a change in our customer's circumstances, we are required validate several details. This process is referred to as 'self-certification' and we are required to collect this information under the CRS," the bank said.

The bank, it added, is required to identify customers who appear to be a tax resident outside the country where they hold their accounts and products.

How to know your tax residence

"For individuals, tax residence typically refers to any jurisdiction where customers are liable to pay income taxes or have an obligation to file their tax returns," Emirates NBD clarified.

'This can be determined by where the individual works or lives. However, there are other contributing factors that are based on each jurisdiction's tax residency rules."

For entities, it is where a firm is obligated to file a tax return or pay income or corporate taxes.

A tax or legal advisor should be consulted for more details, according to Emirates NBD.

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