FBR issues warning to UAE

Federal Board of Revenue (FBR) has requested Ministry of Finance of the United Arab Emirates (UAE) to provide information of all those Pakistanis who have sought the UAE Iqama (work permit) under Residence by Investment (RBI) schemes; otherwise, FBR may terminate the Pakistan-UAE Avoidance of Double Taxation Agreement.

The FBR has requested the UAE to provide a well laid-out roadmap on the information about UAE Iqama holders. Alternatively, Pakistan would be constrained to seriously consider rolling out appropriate measures, including termination of the Pakistan-UAE avoidance of Double Taxation Agreement at an early date.

The FBR in its letter to the UAE's Ministry of Finance has stated that such "delinquent" Pakistan tax resident persons have not only siphoned off funds out of Pakistan, parked them in the UAE but also effectively circumvented the OECD-sponsored CRS exchange of bank and financial account information. The UAE's Ministry of Finance has not responded to all earlier written requests of FBR in this regard so far.

The FBR letter further states that the automatic exchange of information framework, in essence, was conceived and implemented to put up a well-coordinated and concerted global fight against organized tax theft and to inject transparency into the international taxes system. In the Pakistan-UAE meeting on EOI held in Dubai on October 9-10, 2019, a commitment was made to come up with a detailed formal response. However, not only that no reply whatsoever has been received from the UAE, but also that a few subsequent rejoinders issued by FBR went unanswered, even unacknowledged.

The UAE's persistent silence on FBR's efforts to develop a robust framework for sharing of structured information of Pakistani Iqama-holders has not been productive so far. The best inter-nation relationships are mutually responsive, symbiotic and empathetic, and are the product of superior diplomatic wisdom, the letter stated.