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The Central Bank of the UAE (CBUAE) has imposed financial penalties totaling 2.62 million dirhams ($713,310) on five banks and two insurance companies for failing to comply with tax reporting regulations under the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).
While the names of the sanctioned institutions were not disclosed, the CBUAE stated that the penalties were due to deficiencies in due diligence processes and inaccurate financial reporting. Despite receiving regulatory guidance and time to rectify these issues, the financial institutions failed to meet the required compliance standards.
Strengthening Compliance and Tax Transparency
The UAE’s financial regulator emphasized that the enforcement action aligns with its commitment to ensuring transparency in the country’s tax system and preventing tax evasion. By holding financial institutions accountable, the CBUAE aims to enhance regulatory compliance across the banking and insurance sectors.
UAE’s Ongoing Efforts to Combat Tax Violations
This latest move is part of a broader national crackdown on tax violations. The Federal Tax Authority (FTA) has been actively working to strengthen tax compliance, launching a whistleblower program in 2022 to encourage public reporting of tax evasion cases.
With stricter regulatory enforcement and financial penalties, the UAE continues to reinforce its commitment to maintaining global tax compliance standards and protecting the integrity of its financial system.
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