DUBAI (Reuters) - The United Arab Emirates will have to do more to address the European Union’s concerns about tax transparency in order to get itself removed from a tax-haven blacklist, the EU’s ambassador to the UAE said on Wednesday.
“The EU has been in touch over the last months with the UAE authorities and the UAE made a certain number of commitments,” Patrizio Fondi said in an email to Reuters.
But he added that the UAE “does not apply the BEPS (base erosion and profit sharing) minimum standards and did not commit to addressing these issues by Dec. 31, 2018.”
BEPS refers to an agreement signed by some OECD member countries to tackle tax avoidance strategies that allow multinational companies to shift profits artificially to low or no-tax locations.
EU finance ministers on Tuesday adopted a blacklist of 17 jurisdictions deemed to be tax havens, including the UAE and Bahrain, in an unprecedented step to counter worldwide tax avoidance.
Blacklisted countries may no longer be used by EU institutions for international financial operations, and transactions involving them could be subject to closer scrutiny. Fondi said officials in Brussels were still discussing what the full consequences for the UAE of being listed would be.
The governments of the UAE and Bahrain did not respond to Reuters requests for comment on Wednesday.
Fondi said UAE authorities would receive a letter from the EU in coming days detailing what they could do to be removed from the blacklist.
“The placement in the list must not be seen as the end game: on the contrary, the exercise is ongoing and remains a matter of cooperation between partners,” he said.
Reporting by Nawied Jabarkhyl, Writing by Saeed Azhar; Editing by Andrew Torchia