November 2019 / United Arab Emirates

On 6 November 2019, the International Monetary Fund (IMF) released the Concluding Statement of the 2019 Article IV Consultation with the United Arab Emirates (UAE). The IMF makes the following tax policy recommendations:

• strengthening transparent and rules-based fiscal frameworks to ensure sufficient saving of oil wealth for future generations and smoothing of short-term fluctuations; and
• promoting the growth of the non-oil private sector, including small and medium-sized enterprises (SMEs).

Note: Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. The IMF is also allowed to monitor the exchange rate, monetary and fiscal policies, structural policies, and financial and banking policies of every member country. Based on these discussions and research, the IMF prepares a report, which is discussed and assessed by its Executive Board.

On 25 November 2019, the Ministry of Finance published Cabinet Resolution 58 of 2019 defining the regulatory authorities for each type of relevant activity carried on and subject to the obligations provided by Cabinet Resolution No 31 of 2019 on the economic substance regulations (see also United Arab Emirates-1, News 19 September 2019). The regulatory authorities for each type of activity are set out below.

• For banking business, the regulatory authority is:
  • the UAE Central Bank for banking business regulated by the Central Bank; and
  • the competent authority in the Financial Free Zone for banking business carried out therein.
• For insurance business, the regulatory authority is:
  • the Insurance Authority for insurance business regulated by the Insurance Authority; or
  • the competent authority in the Free Zone for banking business carried out therein; and
  • the competent authority in the Financial Free Zone for insurance business carried out therein.
• For investment fund management business, the regulatory authority is:
  • the Securities and Commodities Authority for investment fund management businesses regulated by the said authority;
  • the competent authority in the Free Zone for fund management business carried out therein; and
  • the competent authority in the Financial Free Zone for fund management business carried out therein.
• For lease finance business, the regulatory authority is:
  • the UAE Central Bank for lease finance business regulated by the Central Bank;
  • the competent authority in the Free Zone for lease finance business carried out therein; and
  • the competent authority in the Financial Free Zone for lease finance business carried out therein.
• For headquarter business, the regulatory authority is:
  • the Ministry of Economy for headquarter business regulated by the said Ministry;
  • the competent authority in the Free Zone for headquarter business carried out therein; and
  • the competent authority in the Financial Free Zone for headquarter business carried out therein.
• For shipping business, the regulatory authority is:
  • the Ministry of Economy for shipping business regulated by the said Ministry;
  • the competent authority in the Free Zone for shipping business carried out therein; and
  • the competent authority in the Financial Free Zone for shipping business carried out therein.
• For holding company business, the regulatory authority is:
  • the Ministry of Economy for holding company business regulated by the said Ministry;
  • the competent authority in the Free Zone for holding company business carried out therein; and
  • the competent authority in the Financial Free Zone for holding company business carried out therein.
• For intellectual property business, the regulatory authority is:
  • the Ministry of Economy for intellectual property business regulated by the said Ministry;
  • the competent authority in the Free Zone for intellectual property business carried out therein; and
  • the competent authority in the Financial Free Zone for intellectual property business carried out therein.
• For distribution and service centre business, the regulatory authority is:
  • the Ministry of Economy for distribution and service centre business regulated by the said Ministry;
  • the competent authority in the Free Zone for distribution and service centre business carried out therein; and
  • the competent authority in the Financial Free Zone for distribution and service centre business carried out therein.