UNITED ARAB EMIRATES

Sources: IMF, International Financial Statistics, June 2021.

• The UAE's central bank is the Central Bank of the UAE (www.centralbank.ae).

Bank supervision

• UAE banks are supervised by the Central Bank.

• Lifting fees are applied on payments between resident and non-resident bank accounts.

• Credit transfers are used by companies to pay salaries and suppliers.
• Credit transfers are available as both paper-based and electronic payment instruments.
• Credit transfers are settled in real time via the UAEFTS.
• Low value (AED 10,000) transfers can be made via Immediate Payment Instructions (IPIs). Transfers are made in real time, 24/7/365. In 2019, there were 2.2 million IPI transactions, with a value of AED 5.8 billion.
• Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
• The UAE is involved in developing a regional and cross-border Real-Time Gross Multi-Currency Settlement Systems (GCC-RTGS), which will settle payments in the currencies of the six Gulf region countries. The GCC-RTGS will be operated by the Gulf Payments Company based in Saudi Arabia.
• In December 2020, the UAE-based Arab Monetary Fund’s regional payment system (known as Buna) went live settling transactions in multiple currencies across markets in the GCC, Middle East and Africa. Currencies cover not just the fiat currencies of the Arab countries, but principally traded currencies such as the USD and EUR.

• Direct debits are mainly used for regular payments, such as credit card bills.
• The UAE Direct Debit System (UAEDDS) offers a centralised method of effecting recurring payments.
• The UAEDDS processed 15.7 million transactions in 2019, an increase of 17.2%.
• Salary payments paid via the UAE Wage Protection System are made via direct debit. In 2019, the volume of WPS transactions rose 5%.

• The cheque is an important cashless payment instrument in the UAE, used by consumers and companies.
• Cheques are truncated into electronic items and processed via the ICCS. Final settlement takes place on a same-day basis via the UAEFTS.
• In December 2018, the Central Bank issued guidelines requiring banks to review the creditworthiness of customers with the Al Etihad Credit Bureau (AECB) before issuing cheque books. New customers will be initially issued with just ten cheques. The Central Bank has also encouraged banks to promote the use of electronic payment methods such as direct debits and bank transfers to minimise the use of cheques.
• In 2019, 26.9 million cheques were presented (28.1 million in 2018), a fall of 4.2%.

• Card payments are increasingly popular, especially for retail transactions.
• Visa and MasterCard-branded cards are the most widely issued.
• The Indian domestic debit and credit payment network RuPay was launched in the UAE in August.
• Each bank has its own clearing arrangements with the relevant card issuer.
• All debit cards issued are EMV compliant.

• There were 4,422 ATMs operated by banks in the UAE at the end of December 2020.
• There are approximately 200,000 POS terminals in the UAE.
• All ATMs and POS terminals are EMV-compliant.
• Most ATMs and POS terminals are linked via the UAESwitch network. UAESwitch connects 39 banks within the UAE.
• UAESwitch links to the Gulf Cooperation Council’s (GCC) GCCNet ATM network, as well as to the national networks in Egypt, Iran, Jordan and Lebanon. (The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.)

• The dominant electronic wallet scheme, the e-Dirham card, is mainly used to pay for government services. There are 3.7 million cards in circulation. The total number of transactions in 2019 reached 49 million.
• E-money payments are settled via individual schemes.
• Mobile wallet applications are available from leading UAE banks and telecoms operator Etisalat. Other providers, such as Samsung Pay, Mashreq Pay and Apple Pay, and Google Pay, are also available.
• Emirates Digital Wallet, jointly owned by 15 national banks, owns and operates Klip, a digital cash platform. Klip, which launched in September 2020, enables users to make instant cashless digital payments directly from their bank account or from value stored in the digital wallet.
• The eDMobile application, which provides users with access to eDirham services and e-payments through their smartphones, is an electronic wallet that allows users to store all their payment cards.

• Backed by a senior trade salesperson, a trade middle officer and a dedicated Bahrain-based trade structurer, the UAE represents one of BNP Paribas Global Trade Solutions' (GTS) primary markets. A centralised trade middle office is located in Dubai handling middle office operations for both Abu Dhabi and Dubai branches. GTS offers a wide range of trade products in UAE, and is a leader in supply chain management solutions in the region.

• The UAE has signed free trade agreements (FTAs) with European Free Trade Association (EFTA) member states (Iceland, Liechtenstein, Norway and Switzerland), Australia, Iceland, Iraq, Jordan, Lebanon, Norway, Singapore, Switzerland and Syria.
• The GCC has signed an FTA with EFTA and Singapore. Trade talks are ongoing with the European Union, Mercosur, Japan, China, South Korea, Australia, Pakistan and Turkey. A free trade agreement has been concluded with New Zealand but has not yet been ratified.

Sources: UAE, Bureau of Statistics,  June 2021.

• All importers must be licensed and may only import commodities specified in their licences.
• Specific licences are required when importing alcohol, armaments, ammunition, drugs and pesticides.
• A health certificate and a halal slaughter meat certificate are required when importing beef and poultry  products.

• Tariffs are not set on imports from GCC members states.
• Tariffs are generally not set on imports from GAFTA member states.
• A common external tariff (CET) of 5% is set on most imports from outside the GCC.
• Higher duties are set on alcohol and tobacco.

• None

• None

• Prohibited imports are published on a negative list.
• Specific imports are prohibited in order to protect fauna and flora and for national security or moral reasons.
• In August 2020, the UAE ended its economic boycott of Israel, enabling trade to be conducted between the two countries.

• None

• None

• None

• The Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) provides export credit insurance.

• Prohibited exports are published on a negative list.
• In August 2020, the UAE ended its economic boycott of Israel, enabling trade to be conducted between the two countries.

• The UAE does not apply exchange controls.

• The UAE has no specific rules regarding the taxation of financial instruments or foreign exchange trading.

• Not applicable in UAE.

• See financial instruments.

• There is no advance tax ruling practice in the UAE.

• There is no capital gains tax. Unless derived from a company that is taxable under any of the income tax or banking tax decrees.

• There are no withholding taxes in the UAE.

• United Arab Emirates has exchange of information relationships with 106 jurisdictions through 99 double tax treaties and eight TIEAs.
• The UAE is a signatory of the Multilateral Competent Authority Agreement (MCAA) on the automatic exchange of country-by-country financial account information. Under this multilateral agreement, information will be exchanged between tax administrations, giving them a single, global picture on some key indicators of economic activity within multinational enterprises.

• There are no thin capitalisation rules in UAE.

• There is no specific transfer pricing legislation.
• In April 2019, the UAE introduced country-by-country reporting. UAE-based companies are required to submit a country-by-country report to the Ministry of Finance if:
  • part of a multinational corporation group (MCG) consisting of a group of companies that are tax resident in more than one country (either through another group company or via a permanent establishment) and has consolidated revenues of AED 3.15 billion or more;
  • an ultimate parent entity of this MCG; or
  • a subsidiary of an MCG with a foreign ultimate parent entity unless the ultimate parent entity or an assigned alternate parent will submit the report for the relevant year in another country with which the UAE has an effective exchange relationship.

• There is no stamp duty tax in UAE.

• The UAE has no specific tax rules for cash pooling arrangements.

• No specific taxes are levied on financial transactions or banking services rendered in the UAE. However, as noted above, branches of foreign banks are generally subject to tax at a rate of 20%.

All tax information supplied by Deloitte Touche Tohmatsu and Deloitte Highlight 2021 (www.deloitte.com).