Twelve no/low tax countries share data on companies with no substance with UBO's country

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Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man.

Anguilla
Bahamas
Bahrain
Barbados
Bermuda
British Virgin Islands
Cayman Islands
Guernsey
Isle of Man
Jersey
Turks and Caicos Islands
United Arab Emirates

------- quote start

Tax transparency moves forward as no or only nominal tax jurisdictions first exchange information on the substance of entities

31/03/2021 – Twelve no or only nominal tax jurisdictions began their first tax information exchanges today under the Forum on Harmful Tax Practice’s (FHTP) global standard on substantial activities. The standard ensures that mobile business income can no longer be parked in a low tax jurisdiction without the core business functions being carried out from that jurisdiction and that the countries where the parent entities and beneficial owners are tax resident get access through regular exchanges of information.

These new annual exchanges cover information on the identity, activities and ownership chain of entities established in no or only nominal tax jurisdictions that are either non-compliant with substance requirements or engage in intellectual property or other high-risk activities.

"Today’s first exchanges of information on the previously unknown operations of entities in low tax jurisdictions, are good news for tax administrations around the world, as they will now have regular access to information on the activities and income of entities in low tax jurisdictions that are held or controlled by their taxpayers," said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.

The exchanges will enable receiving tax administrations to carry out risk assessments and to apply their controlled-foreign company, transfer pricing and other anti-base erosion and profit shifting provisions.

The FHTP is monitoring both the legal and practical implementation of the standard by no or only nominal tax jurisdiction through a rigorous, annual peer review process under Action 5 of the OECD/G20 Inclusive Framework on BEPS. The next annual results will be released in December 2021.




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MiddleEuroAsia

opportunist
Entrepreneur
Can't stop breaching how important the Residence Visa you get through the Dubai Company Formation is important.

From the listed countries it's by far the easiest and cheapest to get the Residence through the Company Formation in the UAE.
Yep, you can't just have 0% or low tax status while living full time in your home - and high tax - country, not possible anymore.

just yesterday, one of my friends in Spain received the an unfortunate news from his lawyer that he owns more than 500k in tax to the Spanish government, but he's not worried about that, he is worried that they know about his assets now and they will dig deeper, and yeah, you know how this goes....

Don't go down this muddy route and move your ass into a tax friendly country, if you don't like "sharia-law" countries and you like the comfort that the EU brings, Malta, Cyprus, Andorra is next door. "but it's boring" then don't blame anybody but your sorry ass.

Move before it's too late.
 

saintjohnny

New member
Yep, you can't just have 0% or low tax status while living full time in your home - and high tax - country, not possible anymore.

just yesterday, one of my friends in Spain received the an unfortunate news from his lawyer that he owns more than 500k in tax to the Spanish government, but he's not worried about that, he is worried that they know about his assets now and they will dig deeper, and yeah, you know how this goes....

Don't go down this muddy route and move your ass into a tax friendly country, if you don't like "sharia-law" countries and you like the comfort that the EU brings, Malta, Cyprus, Andorra is next door. "but it's boring" then don't blame anybody but your sorry ass.

Move before it's too late.
Would love to know what your friend was doing to end up in such a dire situation...
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member

wellington

Entrepreneur
Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man.

Anguilla
Bahamas
Bahrain
Barbados
Bermuda
British Virgin Islands
Cayman Islands
Guernsey
Isle of Man
Jersey
Turks and Caicos Islands
United Arab Emirates

------- quote start

Tax transparency moves forward as no or only nominal tax jurisdictions first exchange information on the substance of entities

31/03/2021 – Twelve no or only nominal tax jurisdictions began their first tax information exchanges today under the Forum on Harmful Tax Practice’s (FHTP) global standard on substantial activities. The standard ensures that mobile business income can no longer be parked in a low tax jurisdiction without the core business functions being carried out from that jurisdiction and that the countries where the parent entities and beneficial owners are tax resident get access through regular exchanges of information.

These new annual exchanges cover information on the identity, activities and ownership chain of entities established in no or only nominal tax jurisdictions that are either non-compliant with substance requirements or engage in intellectual property or other high-risk activities.

"Today’s first exchanges of information on the previously unknown operations of entities in low tax jurisdictions, are good news for tax administrations around the world, as they will now have regular access to information on the activities and income of entities in low tax jurisdictions that are held or controlled by their taxpayers," said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.

The exchanges will enable receiving tax administrations to carry out risk assessments and to apply their controlled-foreign company, transfer pricing and other anti-base erosion and profit shifting provisions.

The FHTP is monitoring both the legal and practical implementation of the standard by no or only nominal tax jurisdiction through a rigorous, annual peer review process under Action 5 of the OECD/G20 Inclusive Framework on BEPS. The next annual results will be released in December 2021.




----- end quote
Concerning issue with that list, a chunk of them are British Overseas Territories, or Former Territories in which the UK still has a close proximity to.

What happens when the UK (Pressured by the US, EU), pressures them in return... in one fell swoop...

Can't stop breaching how important the Residence Visa you get through the Dubai Company Formation is.

From the listed countries it's by far the easiest and cheapest to get the Residence through the Company Formation in the UAE.
Problem is, Dubai has no Heart and Soul... lived there for a 'month' and that was enough for me.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
What happens when the UK (Pressured by the US, EU), pressures them in return... in one fell swoop...

Do you mean UK gets data from them? I don't think UK wants to harm the economies of these Crown Dependencies or at least the British Overseas Territories. Any aggressive move by UK and the BOT's may go there own way like Barbados did last year. UK is in very weak position geopolitically to pressure anyone. UK is becoming largely irrelevant on world stage also.
 

openlaw

Offshore Agent
Can't stop breaching how important the Residence Visa you get through the Dubai Company Formation is.
Can you confirm that this automatically prevents information to be transferred by UAE (emirate) govt?
AFAIK, certificate of residency will be issued after 183 days of real stay in UAE in 2022. And already there are some refusals of issuance for people that were in UAE 1-30 days.
One fact doesn't confirm another automatically but these issues are linked one to another...
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
Entrepreneur
Can you confirm that this automatically prevents information to be transferred by UAE (emirate) govt?
AFAIK, certificate of residency will be issued after 183 days of real stay in UAE in 2022. And already there are some refusals of issuance for people that were in UAE 1-30 days.
One fact doesn't confirm another automatically but these issues are linked one to another...
You are talking about Tex Residence Certificate - that's not discussed here.

It's as simple as no UAE Bank nowadays opens without the Residence Visa a Bank Account.

That's the reason why Citibank UAE closed @Martin Everson non-resident account already years ago.

For me it's not clear why people are still looking into non-resident Offshore Companies like RAK - latest now with the aboth mentioned information - it's a dead cow.
 

KJK

Entrepreneur
I don't think it is simply greed.

It is something intristic in human psychology. In such situations, you just want to stay where you are, maintain your status quo and think that things will resolve themselves and it can't get any worse. Then you are surprised when things don't get better and even take a turn for the worse.

Same behaviour in different circumstances - French citizens in 19th century, Jews shortly before the outbreak of WWII, Australian citizens living through COVID restrictions, people living in 50%+ tax countries who try to find some loophole to keep living there...

Freedom was never given away, you always had to fight for it. And it the "fight" means simply moving away, being a resident elsewhere and perhaps burning a few bridges, then that price to pay is like 100 times smaller than what people had to pay in the past.
 

sublety22

New member
You are talking about Tex Residence Certificate - that's not discussed here.

It's as simple as no UAE Bank nowadays opens without the Residence Visa a Bank Account.

That's the reason why Citibank UAE closed @Martin Everson non-resident account already years ago.

For me it's not clear why people are still looking into non-resident Offshore Companies like RAK - latest now with the aboth mentioned information - it's a dead cow.
You mean tax residence certificate ? You are implying that all you need is the "residence visa" in UAE while all the means you don't have to live there and there is no reporting even if you do't have a tax residency certificate.
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
Entrepreneur
You mean tax residence certificate ? You are implying that all you need is the "residence visa" in UAE while all the means you don't have to live there and there is no reporting even if you do't have a tax residency certificate.
No - again - we are not talking here about Tax Residence Certificate.

CRS reporting is unrelated to a Tax residence Certificate.

You need to make yourself familiar with both CRS reporting - the mechanism behind, how it's enforced etc.

Same goes for the Tax Residence Certificate - make yourself familiar with it and not just put everything in one basket.

Practice Example:

John Doe wants to move out of his Home Country (Country of Citizenship). He decides to move physically to Thailand because he loves the beach and food there. John Doe doesn't like the local uncertain legal framework when it comes to running a Company - he doesn't want to have a local Thai part of his local Thai Company and that's the reason why he is looking at the OffshoreCorpTalk Forum. He sees the approach from DLS Dubai and does understand that he can get with this approach a Tax friendly environment for his Company and Finances with a minimum of bureaucracy.

John Doe decides to setup a Dubai Company that grants him the Dubai Residence Visa which ultimately gains him the access to the local banks. Further John does understand the point of the All-Incl. Package of DLS Dubai and that they setup additional to his Residence Visa substance for him to further satisfy the banks which leads to success in the Bank Account opening.

John Doe now received what he was looking for: an operational 0% Tax Company with reliable retail Banking and the minimum requirement of being every 6 months for 1 day in the UAE to keep the structure active.

John Doe doesn't need the Tax Residence Certificate from the UAE as he lives in Thailand - a country without CFC rules - further John Doe is a clever men and knows that he shouldn't live with his Dubai Setup the whole year in his home country (Country of Citizenship) but in the same time he knows that the world isn't about black and white thinking and he does undertsand that moving out of his Home Country doesn't mean necessarily moving the whole year to the UAE.

You can replace Thailand with any country without any CFC rules or a Digital Nomad Lifestyle where you are just travelling the world.
 

Konstanz

Entrepreneur
No - again - we are not talking here about Tax Residence Certificate.

CRS reporting is unrelated to a Tax residence Certificate.

You need to make yourself familiar with both CRS reporting - the mechanism behind, how it's enforced etc.

Same goes for the Tax Residence Certificate - make yourself familiar with it and not just put everything in one basket.

Practice Example:

John Doe wants to move out of his Home Country (Country of Citizenship). He decides to move physically to Thailand because he loves the beach and food there. John Doe doesn't like the local uncertain legal framework when it comes to running a Company - he doesn't want to have a local Thai part of his local Thai Company and that's the reason why he is looking at the OffshoreCorpTalk Forum. He sees the approach from DLS Dubai and does understand that he can get with this approach a Tax friendly environment for his Company and Finances with a minimum of bureaucracy.

John Doe decides to setup a Dubai Company that grants him the Dubai Residence Visa which ultimately gains him the access to the local banks. Further John does understand the point of the All-Incl. Package of DLS Dubai and that they setup additional to his Residence Visa substance for him to further satisfy the banks which leads to success in the Bank Account opening.

John Doe now received what he was looking for: an operational 0% Tax Company with reliable retail Banking and the minimum requirement of being every 6 months for 1 day in the UAE to keep the structure active.

John Doe doesn't need the Tax Residence Certificate from the UAE as he lives in Thailand - a country without CFC rules - further John Doe is a clever men and knows that he shouldn't live with his Dubai Setup the whole year in his home country (Country of Citizenship) but in the same time he knows that the world isn't about black and white thinking and he does undertsand that moving out of his Home Country doesn't mean necessarily moving the whole year to the UAE.

You can replace Thailand with any country without any CFC rules or a Digital Nomad Lifestyle where you are just travelling the world.
CRS avoidance discussions are pointless. Banks usually report people also to their citizenship countries
Another thing, not only you have to visit UAE twice a year. But also when you apply or renew your residence you have to undergo medical checks (including Chest Xrays). This is also something hidden about UAE residence :)
 

Fred

Dubai Expat
Mentor Group Gold
Elite Member
Commercial Service
Entrepreneur
CRS avoidance discussions are pointless. Banks usually report people also to their citizenship countries
Another thing, not only you have to visit UAE twice a year. But also when you apply or renew your residence you have to undergo medical checks (including Chest Xrays). This is also something hidden about UAE residence :)
CRS reporting based on the passport is simply not true.

There is a reason why this site exists:


With the aboth given example is it irrelevant anyway - moving out of your Country of Citizenship is the first step all the time.

About Medical Check:

Yes - you have to do a HIV rapid test and Xray shot to see if you are HIV positive or having Tuberkulose.

So better not consider UAE with having HIV and/or Tuberkulose.
 
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