January 19th, 2017
The Organization for Economic Co-Operation and Development or OECD that is comprised of 35 member nations including the United States, almost all of Europe, Canada and Mexico, Australia, Turkey, Japan and Korea have ordered banks to administer new compliance measures. The purpose of these measures is to establish account holder’s national residence and to determine whom specifically and personally controls the accounts for tax purposes. World governments are making it much more difficult or individuals and entities to avoid paying taxes through international business, trust and banking strategies.
UAE local banks are starting to warn their customers about new international tax compliance measures that are going into effect this month in an effort for governments to prevent and catch tax evaders. As a matter of fact, notifications are going out around the world from global banks warning customers of new international tax compliance agendas beginning in 2017.
A prominent bank in the United Arab Emirates or UAE, HSBC, sent a letter to clients last week explaining the OECD regulations and concluding, “Therefore, from the beginning of 2017 onwards, we will be contacting some of our customers to collect information related to their tax status.”
In the Middle East the UAE is one of the leading banking destinations for private wealth. From a banking aspect the UAE is very significant as many of the world’s wealthiest individuals have accounts in the UAE as well as Switzerland, Hong Kong and the US.
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Founder & CEO, Tiger-Consulting