British Offshore Investment Strategy

While the world watches the Panama papers propaganda, Dubai finalizes the framework for the perfect British Offshore Investment Strategy, a tax information exchange agreement (TIEA) with the United Kingdom (UK) and the famous tax haven of Jersey to avoid double taxation and pave the way for the United Arab Emirates (UAE) to become a leading International Finance Centre. In other words, UK, Jersey and UAE agree to a TIEA, the main purpose of which is to make it easier and more attractive for Brits to invest offshore.

The commercial secretary to the UK Treasury Jim O’Neill said the deal, inked on April 12, will “remove one area of possible uncertainty for the thousands of UK businesses operating in the UAE, and for the 100,000-plus British nationals living and working in the UAE.”

Jersey, a very important tax haven, has over the past half-decade inked several agreements with UAE authorities. Jersey is a self-governing parliamentary democracy under a constitutional monarchy, with its own financial, legal and judicial systems, and the power of self-determination.

The island of Jersey is the largest of the Channel Islands. Although the Bailiwicks of Jersey and Guernsey are often referred to collectively as the Channel Islands, the “Channel Islands” are not a constitutional or political unit. Jersey has a separate relationship to its Crown from the other Crown dependencies of Guernsey and the Isle of Man, although all three Crowns are held by the monarch of the United Kingdom. It is not part of the United Kingdom, and has an international identity separate from that of the UK, but the United Kingdom is constitutionally responsible for the defence of Jersey.

The separate agreements, signed by the UAE’s finance ministry and UK and Jersey authorities, are in line “with the Ministry’s belief in the importance of strengthening its network of international relations,” state-owned news outlet WAM reported.

Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). This double liability is often mitigated by tax treaties between countries.

The term ‘double taxation’ is additionally used, particularly in the USA, to refer to the fact that corporate profits are taxed and the shareholders of the corporation are (usually) subject to personal taxation when they receive dividends or distributions of those profits.

Photo credit: Steven Vacher via VisualHunt.com / CC BY-NC-ND