On the 21 April 2017, the United Arab Emirates (UAE) officially signed up to the Multinational Convention on Mutual Administrative Assistance in Tax Matters.

The Gulf state, which includes the emirates of Dubai and Abu Dhabi, is the 109th jurisdiction to sign up to what the Organisation for Economic Cooperation and Development (OECD) describes as "the most powerful instrument for international tax cooperation". The Convention provides for all forms of administrative assistance in tax matters: exchange of information in request,spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It is seen as the premier measure to combat international tax avoidance and evasion.

The signing of the Convention follows significant pressure asserted by the OECD and the G20 directly on the UAE (and other reluctant signatories such as the Bahamas) to ensure that they stay on track to fulfill their obligations under the Common Reporting Standards (CRS) to commence exchange of information by 2018. The CRS requires "financial institutions" to pass information about their clients to their clients' local tax authorities with the aim of preventing the use of "off shore" structures to evade tax.

With the number of UK expatriates based in the UAE this is a significant development for HMRC who are looking to clamp down on off shore evaders who have not paid sufficient tax in the UK. This is particularly if one believes the campaign group Tax Justice Network who have previously described Dubai as having, "a strong culture of an ask-no-questions, see no evil approach to commercial or financial regulation or foreign financial crimes".

In somewhat of a pincer movement, just as the CRS comes into effect so the UK has ramped up HMRC's off shore enforcement capacity. Indeed, the"No Safe Havens" strategy launched in 2013 by the Coalition Government set out to achieve just this, committing the UK to promotion of the CRS and other exchange treaties, combined with the implementation of a range of new measures aimed at clamping down on off shore tax evasion. Since that time we have seen the enactment of new criminal offences including the "strict liability" offence for off shore tax evasion (see strategy launched in 2013 by the Coalition Government set out to achieve just this, committing the UK to promotion of the CRS and other exchange treaties, combined with the implementation of a range of new measures aimed at clamping down on off shore tax evasion. Since that time we have seen the enactment of new criminal offences including the "strict liability" offence for off shore tax evasion (see our previous blog here) and the corporate offence of failure to prevent the facilitation of tax evasion in the UK and abroad (see our previous blog here). Both offences have received royal assent and should come into effect in September this year.

September 2017 is also the date for the first automatic exchanges under the CRS, where the UK, together with 52 other countries (including British Virgin Islands, Cayman Islands and the Isle of Man) will start to share information between jurisdictions. The remaining nations (including Bahamas, Switzerland and the UAE) will undertake their first exchanges in September 2018 in a second batch of multi-lateral exchanges.

It remains to be seen how effectively nations are able to cope with the technical and practical aspects of sharing such a vast amount of information in a way that is both efficient and effective but does not breach privacy and data protection laws. One thing is for certain, with over 100 nations implementing the CRS over the next two years, there is going to be some interesting financial information coming out of the woodwork.