Emirates NBD Bank has issued an advisory to its customers, warning them of a potential fine of Dh20,000 for non-compliance with the Common Reporting Standard (CRS), a global tax transparency initiative. The bank sent out an email on Thursday evening, outlining the requirements under CRS and the steps customers need to take to comply.
The CRS mandates financial institutions to ascertain their customers’ tax residency and maintain accurate and up-to-date information about it. This includes information about controlling persons, where applicable. To comply with these regulations, bank customers are required to declare their tax residency, provide supporting documents, and complete a ‘self-certification form’. The bank has stipulated that these requirements must be fulfilled within 30 days from the date of the email.
Failure to ensure the accuracy of all submitted information could result in a hefty fine of Dh20,000, as per the UAE Ministry of Finance’s (MoF) regulations for CRS implementation in the country. According to the MoF guidelines, banks and financial institutions are obligated to report any violations within 30 days of detection.
The bank further clarified the concept of ‘self-certification’, which is a process through which the bank collects information about a customer’s tax status. This process is triggered when a new bank account is opened, an investment in new financial products is made, or a change in a customer’s circumstances is observed. The bank is also required to identify customers who appear to be tax residents outside the country where they hold their accounts and products.
Emirates NBD Bank explained that for individuals, tax residence typically refers to any jurisdiction where customers are liable to pay income taxes or have an obligation to file their tax returns. This can be determined by where the individual works or lives, among other factors based on each jurisdiction’s tax residency rules. For entities, it is where a firm is obligated to file a tax return or pay income or corporate taxes. The bank advised customers to consult a tax or legal advisor for more details.