UAE Among World’s Fastest Growing Tax Havens, Study Finds | Business and economic news
The United Arab Emirates is one of the fastest growing tax havens in the world, with more than $ 200 billion flowing into the country, according to the Tax Justice Network.
The United Arab Emirates, a magnet for the world’s ultra-rich, has also emerged as one of the fastest growing corporate tax havens, according to a study released Tuesday that highlighted the more than 200 billions of dollars flowing into the country.
The Corporate Tax Haven Index 2021 – released by the Tax Justice Network, which documents countries that encourage businesses to lower their tax bills – added the United Arab Emirates to its top 10, which includes Switzerland and Bermuda.
The offshore territories of the United Kingdom, the British Virgin Islands, Cayman Islands and Bermuda, have been named as the most important jurisdictions used by businesses to minimize their taxes, followed by the Netherlands.
The UAE joined the top spot at number 10 after multinationals redirected more than $ 218 billion in foreign direct investment through the Netherlands to the UAE to save taxes, the study found, boosting financial activity by almost 180%.
A spokeswoman for the Dutch Ministry of Finance said the Netherlands had introduced a withholding tax to target cash flows to low-tax countries, including the United Arab Emirates and Bermuda, and to prevent the Netherlands from being used as a channel. He believes, however, that cash flows are weaker.
The UAE did not respond to a request for comment.
The Tax Justice Network, a donation-funded group campaigning for transparency, said its study measured multinational activity, as well as tax rates and loopholes. While companies are not prohibited from using loopholes, the practice is viewed critically.
“You don’t have to be a tax expert to understand why a global tax system programmed by a club of wealthy tax havens results in a loss of over $ 245 billion in corporate taxes per year,” he said. said Alex Cobham, CEO of Tax Justice Network.
Dubai, a party capital in the United Arab Emirates and a magnet for social media influencers, has been hit hard by the coronavirus pandemic as lockdowns hurt tourism and shopping as lower oil prices weighed on Gulf State revenues.
To counter the decline in the local population and revive a struggling real estate market – after job cuts prompted many expats, who make up the majority of the population, to leave – he redoubled his efforts to revive the ‘economy.
The government has relaxed the rules to encourage international companies to locate locally and strengthened visa programs for wealthy foreigners.
The country has come under fire from the Financial Action Task Force, the world’s dirty money watchdog. The UAE recently approved the creation of a new government office to combat money laundering and terrorist financing.
The Cayman Islands government has said it “supports a fair tax system” and is committed to “international tax standards”. The UK Department of Finance said the Overseas Territories set their own policies. Other countries did not respond or declined to comment.