Private bank requesting tax residence certificate

[hortm]

How do you estimate chance private bank's (Swiss, US, Cayman...) compliance requesting tax residence certificate (UBO has put residence of UAE)?

Did you ever heard of or encountered such cases?

 

[Sols]

How do you estimate chance private bank's (Swiss, US, Cayman...) compliance requesting tax residence certificate (UBO has put residence of UAE)?

Sometimes it happens, sometimes it doesn't. Depends on a lot of factors.

UAE is now on several international watch lists for facilitation or poor enforcement against money laundering and tax crimes, so it's not unreasonable to expect additional scrutiny.

Did you ever heard of or encountered such cases?

Yes.

But, at least for the time being, it's more common to ask for tax returns than for TRCs. TRCs don't prove you have actually declared income. They just prove you're supposed to.

 

[sergeylim88]

in case of UAE what would you show for tax returns considering there is no tax except vat & corporate tax that is coming in June 2023?

 

[Martin Everson]

How do you estimate chance private bank's (Swiss, US, Cayman...) compliance requesting tax residence certificate (UBO has put residence of UAE)?

Pot luck. But I mean its not as if people use UAE residency permit to avoid taxes where they [cough cough] really live so why should banks ask for one .

Did you ever heard of or encountered such cases?

Not personally. But sounds logical to ask due to UAE reputation and the need for extended due diligence.

 

[wellington]

Currently looking at Dubai to get a property in-case all hell breaks out in Asia (two young babies to consider evacuation for).

If you've got any indicators on the ground on good property projects well priced.

 

[hortm]

Currently looking at Dubai to get a property in-case all hell breaks out in Asia (two young babies to consider evacuation for).

If you've got any indicators on the ground on good property projects well priced.

I do not think prices shall grow anymore. They are not growing for 15 years at least. Logic suggests it is better to buy something near sea - 1-2 line. Utility prices - that an issue. Check that in prior if you want to save on that. Really may differ depending on project. IMHO, overpriced in many areas.

in case of UAE what would you show for tax returns considering there is no tax except vat & corporate tax that is coming in June 2023?

nothing. private bank won't as anything like that.

Sometimes it happens, sometimes it doesn't. Depends on a lot of factors.

UAE is now on several international watch lists for facilitation or poor enforcement against money laundering and tax crimes, so it's not unreasonable to expect additional scrutiny.


Yes.

But, at least for the time being, it's more common to ask for tax returns than for TRCs. TRCs don't prove you have actually declared income. They just prove you're supposed to.

I think you are not taking into account that my question pertains private bank. I never been asked for tax returns. In particular was asked only for - residence visa, utility bill.

Sometimes it happens, sometimes it doesn't. Depends on a lot of factors.

UAE is now on several international watch lists for facilitation or poor enforcement against money laundering and tax crimes, so it's not unreasonable to expect additional scrutiny.


Yes.

But, at least for the time being, it's more common to ask for tax returns than for TRCs. TRCs don't prove you have actually declared income. They just prove you're supposed to.

If not secret, can you tell where approximately TRC was asked? Is it private bank or some active business account?

Pot luck. But I mean its not as if people use UAE residency permit to avoid taxes where they [cough cough] really live so why should banks ask for one .



Not personally. But sounds logical to ask due to UAE reputation and the need for extended due diligence.

from what I see, probably chance is very low. hope I am correct

 

[hortm]

Do I understand correctly that if Swiss private bank asked for TRC and I do not want (or can not) get it then I can tell them something like - the process of getting TRC it too complicated, please close my account...
...and move assets to another private bank who has more liberal compliance?

They won't block my money or something scary like that?

 

[Sols]

Move the money out first, then tell them you have decided to close down the account. Don't mention that it's because of the TRC. Refusal to provide KYC can be grounds for a SAR being filed, which in turn can get your funds suspended for a long time.

If not secret, can you tell where approximately TRC was asked? Is it private bank or some active business account?

I have seen it requested for both. It's often part of account opening or KYC renewal. But as I said, I see request for tax return far more than request for TRC. If a bank is asking for TRC, I'd see it as the bank having suspicion that you aren't genuinely tax resident there.

 

[hortm]

Move the money out first, then tell them you have decided to close down the account. Don't mention that it's because of the TRC. Refusal to provide KYC can be grounds for a SAR being filed, which in turn can get your funds suspended for a long time.


I have seen it requested for both. It's often part of account opening or KYC renewal. But as I said, I see request for tax return far more than request for TRC. If a bank is asking for TRC, I'd see it as the bank having suspicion that you aren't genuinely tax resident there.

Do you think there is actually real chance a bank files SAR on base of potential tax avoidance (providing untrue tax residence like UAE or Bahrain and inability to provide TRC upon request) while money source is absolute clean and legal?

 

[Konstanz]

Yes, private bank can request tax residence certificate. Usually they don't request. Unless they have suspicions you are not genuine resident in UAE

 

[Sols]

Do you think there is actually real chance a bank files SAR on base of potential tax avoidance (providing untrue tax residence like UAE or Bahrain and inability to provide TRC upon request) while money source is absolute clean and legal?

Yes, because if you refuse to submit to due diligence, that casts doubt over the cleanliness and legality of your money.

Getting a TRC in UAE (or Bahrain) isn't some impossible task, provided you have actually satisfied the requirements to be tax residence.

The problem is that UAE is known for handing out residence permits and doing zero checking on them, which means banks are increasingly not taking claimed UAE residence seriously. They want proven UAE residence.

 

[hortm]

Yes, because if you refuse to submit to due diligence, that casts doubt over the cleanliness and legality of your money.

Getting a TRC in UAE (or Bahrain) isn't some impossible task, provided you have actually satisfied the requirements to be tax residence.

The problem is that UAE is known for handing out residence permits and doing zero checking on them, which means banks are increasingly not taking claimed UAE residence seriously. They want proven UAE residence.

You think Bahrain is less suspicious for banks?

 

[Sols]

You think Bahrain is less suspicious for banks?

Bahrain isn't currently on any major blacklists or gray lists, so it's better than UAE in that sense. However, it's far less known and less established than UAE, which isn't in its favor. Compliance staff at banks know about UAE (and its shortcomings), whereas they might view Bahrain with suspicion simply for being novel.

 

[hortm]

But if banker tells that they already have clients with residency of Bahrain, then you think it should be better than UAE in overall?

 

[Sols]

But if banker tells that they already have clients with residency of Bahrain, then you think it should be better than UAE in overall?

Maybe, maybe not. It's impossible to say for sure. Unless they target the GCC region a lot, they probably have many times more UAE residents than Bahrain residents. So Bahrain is still relatively unknown.

Are you deciding which jurisdiction to tell your bank you're tax resident in while living somewhere else, in order to avoid CRS/AEOI?

 

[hortm]

Maybe, maybe not. It's impossible to say for sure. Unless they target the GCC region a lot, they probably have many times more UAE residents than Bahrain residents. So Bahrain is still relatively unknown.

Are you deciding which jurisdiction to tell your bank you're tax resident in while living somewhere else, in order to avoid CRS/AEOI?

>while living somewhere else -

yes and no. I am planning on actually living in Bahrain for necessary amount of time during year (I suspect that is 90 days), but at some point it may happen that I shall spend less than 90 days in Bahrain.

Keep in mind - I do not have any income at any other countries. I am only trading stocks on brokerage on my own accounts.

 

[karishi]

>while living somewhere else -

yes and no. I am planning on actually living in Bahrain for necessary amount of time during year (I suspect that is 90 days), but at some point it may happen that I shall spend less than 90 days in Bahrain.

Keep in mind - I do not have any income at any other countries. I am only trading stocks on brokerage on my own accounts.

But why don't you keep your money in the UAE?If you are resident in the UAE, which means your visa is valid, and use a UAE bank ( so not a UAE branch of a EU bank ), nobody will ask anything except for the source funds. Then you use Interactive Brokers for trading.

 

[Sols]

I am planning on actually living in Bahrain for necessary amount of time during year (I suspect that is 90 days)

183 days in Bahrain.

but at some point it may happen that I shall spend less than 90 days in Bahrain.

Then you're not tax resident and if someone asks you for a TRC, you might not be able to get one.

Keep in mind - I do not have any income at any other countries. I am only trading stocks on brokerage on my own accounts.

Doesn't make a difference. Helping tax evaders is no longer the preferred business activity even of private banks.

 

[hortm]

It was not question where I should keep money. Also I do not think it is relevant in terms of residency - same scrutiny shall apply.

IMHO, sometimes UAE banks are strange, have bad service and not honest. I do not want my money to be siphoned out eventually by some private banker or account blocked without any proper reason. Also I expect it to be nightmare to sue bank in UAE. Democratic countries with offshore habits seem more reasonable to me for banking - Bahamas, Cayman, USA, Switzerland... etc. My accounts are currently there and all is fine.

I saw many cases of clean honest e-commerce accounts being blocked in UAE. Retail bankers almost asking directly money to solve issue, etc. etc. Weird compliance questions and stuff.

Also, I do not like to physically spend time in UAE now. Too many russians and all that temporary expat. mode of everyone besides locals.

183 days in Bahrain.


Then you're not tax resident and if someone asks you for a TRC, you might not be able to get one.


Doesn't make a difference. Helping tax evaders is no longer the preferred business activity even of private banks.

Why 183? They need 90 days of stay to support gold investor visa and they do not have clear tax residency rules (check PWC).

They do not have TRC in Bahrain. They have COR (Cerificate of Residence). I think those 90 days are actually not enforced and I think they shall cancel that minimum stay as UAE did.

Also I assume I can move out money in case of such request and tell bank that 1. There is no TRC. 2. If they ask for COR -getting COR is just too complicated (which is true) and I would better just close the account and move to another bank. I think it is negligible bank shall do anything worse then just closing account after that.

 

[karishi]

It was not question where I should keep money. Also I do not think it is relevant in terms of residency - same scrutiny shall apply.

IMHO, sometimes UAE banks are strange, have bad service and not honest. I do not want my money to be siphoned out eventually by some private banker or account blocked without any proper reason. Also I expect it to be nightmare to sue bank in UAE. Democratic countries with offshore habits seem more reasonable to me for banking - Bahamas, Cayman, USA, Switzerland... etc. My accounts are currently there and all is fine.

I saw many cases of clean honest e-commerce accounts being blocked in UAE. Retail bankers almost asking directly money to solve issue, etc. etc. Weird compliance questions and stuff.

Also, I do not like to physically spend time in UAE now. Too many russians and all that temporary expat. mode of everyone besides locals.


Why 183? They need 90 days of stay to support gold investor visa and they do not have clear tax residency rules (check PWC).

They do not have TRC in Bahrain. They have COR (Cerificate of Residence). I think those 90 days are actually not enforced and I think they shall cancel that minimum stay as UAE did.

Also I assume I can move out money in case of such request and tell bank that 1. There is no TRC. 2. If they ask for COR -getting COR is just too complicated (which is true) and I would better just close the account and move to another bank. I think it is negligible bank shall do anything worse then just closing account after that.

Well democratic countries tend to follow the rules, and if you tell to a bank that you are a UAE resident, depending on how much money you have, might ask you for a confirmation that you are actually resident in the UAE or report you to the country of your passport. As usual, there are trade offs, as you say UAE banks are bad and UAE is not a democratic country so bad things can happen, but UAE banks will not report you if you have a valid residency visa.
.Don't put all yout eggs in the same basket, but don't expect banks to believe your UAE residency, since you can stay 3 days a year in the UAE and still be considered resident.