Strengthening Tax Transparency: UAE Exchange of Information Framework

The UAE has introduced Cabinet Resolution No. 209 of 2025 to strengthen its Exchange of Information framework, aligning domestic law with international tax transparency standards and expanding record-keeping and disclosure obligations. The new regime grants the Ministry of Finance enhanced enforcement powers and introduces administrative penalties, reinforcing the UAE’s commitment to global tax cooperation and regulatory credibility.

The United Arab Emirates (UAE) has taken a decisive step in reinforcing its tax transparency architecture through the issuance of Cabinet Resolution No. 209 of 2025 (Resolution 209), establishing a comprehensive framework for the Exchange of Information (EOI) for tax purposes. The Resolution modernizes and significantly expands the country’s previous regime under Cabinet Resolution No. 17 of 2012 (Resolution 17), aligning domestic legislation with international standards on transparency, cooperation, and cross-border tax enforcement.

The new framework is not merely a technical update. It represents a structural enhancement of the UAE’s international tax cooperation regime at a time when global scrutiny of tax transparency, beneficial ownership, and information accessibility has intensified. As the UAE continues to consolidate its position as a major international business and financial hub, regulatory credibility and compliance with global tax standards have become central pillars of economic policy.

This article outlines the legal background, core components, enforcement mechanisms, and strategic implications of the UAE’s strengthened Exchange of Information framework.

Legislative background and policy context

Prior to the issuance of Resolution 209, the UAE’s EOI regime operated under Resolution 17. While the earlier framework enabled the competent authority to exchange information pursuant to international agreements, it lacked detailed compliance obligations, explicit enforcement mechanisms, and structured procedural clarity.

Over the past decade, the global tax environment has evolved substantially. International initiatives led by the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes have established robust peer-review mechanisms to assess jurisdictions’ compliance with transparency standards. Countries are now expected to demonstrate not only treaty participation, but also effective domestic implementation and enforcement capabilities.

The UAE has actively engaged in this process. Through its expanding network of double taxation agreements and its participation in multilateral tax cooperation instruments, the country has committed to upholding international standards on transparency and information exchange. The introduction of federal corporate tax, economic substance regulations, beneficial ownership rules, and anti-money laundering reforms in recent years further illustrate a broad regulatory transformation.

Cabinet Resolution No. 209 of 2025 must therefore be understood within this broader trajectory: it consolidates the UAE’s legal infrastructure for tax transparency and ensures that information exchange obligations are supported by enforceable domestic rules.

Scope of application

One of the most significant features of the new Resolution is its broad scope of application. The framework applies to:

• Natural persons licensed to conduct business activities in the UAE;
• Legal persons incorporated or registered in the UAE, including mainland and free zone entities;
• Legal arrangements such as partnerships and other structured vehicles; and
• Permanent establishments of foreign entities operating within the UAE.

The inclusion of free zone entities is particularly noteworthy. Free zones have long played a central role in the UAE’s economic model, offering regulatory and tax incentives to attract foreign investment. By explicitly including free zone businesses within the EOI framework, the Resolution reinforces the principle that transparency obligations apply uniformly across jurisdictions.

The framework also extends to entities that may not be subject to corporate tax due to exemptions or threshold requirements. The obligation to maintain and provide information under the EOI regime is not contingent on tax liability; it is linked to the potential relevance of information for foreign tax authorities under applicable treaties.

This expansive coverage ensures that information cannot be shielded through structural arrangements or jurisdictional segmentation within the UAE.

Competent authority and institutional powers

The Resolution designates the Ministry of Finance as the competent authority responsible for administering the Exchange of Information framework. The Ministry of Finance is empowered to receive requests from foreign competent authorities, verify compliance, obtain information from relevant persons, and transmit information in accordance with treaty obligations.

The Ministry is granted broad authority to:

• Request information from any person within the scope of the Resolution;
• Conduct inspections or require clarifications where necessary;
• Coordinate with regulatory bodies, licensing authorities, and financial institutions;
• Impose administrative penalties for non-compliance.

Importantly, the Ministry’s authority extends to information that may not be held directly by the requested entity but can reasonably be obtained by it. This reflects the international standard that information must be “foreseeably relevant” to the requesting authority, and that domestic obstacles should not impede exchange.

The Resolution also emphasizes confidentiality and data protection. Information exchanged is subject to treaty-based safeguards and may only be used for specified tax purposes. This balance between transparency and confidentiality is central to maintaining investor confidence while meeting international obligations.

Information and record-keeping equirements

A cornerstone of the new EOI framework is the detailed articulation of record-keeping and information retention obligations.

Entities and individuals within scope must maintain:

• Ownership and beneficial ownership information;
• Identity details of shareholders, partners, trustees, or equivalent stakeholders;
• Accounting records sufficient to determine financial position;
• Banking information and transaction records; and
• Information relating to assets and liabilities.

The Resolution prescribes a minimum retention period of five years from the end of the relevant financial period, unless a longer period is required under another applicable law. Records must be accessible within the UAE and provided upon request within specified deadlines.

These requirements align closely with the standards promoted by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. Under the Exchange of Information upon Request (EOIR) standard, jurisdictions must ensure that ownership, accounting, and banking information is available, accurate, and accessible.

The emphasis on beneficial ownership information is particularly significant. In recent years, beneficial ownership transparency has become a focal point of international compliance reviews. The UAE’s EOI framework complements its existing beneficial ownership regulations, ensuring that information held for corporate registry purposes can also support cross-border tax inquiries.

Enforcement mechanisms and administrative penalties

Perhaps the most transformative aspect of Resolution 209 of 2025 is the introduction of a structured enforcement regime.

Under the previous framework, penalties were either unclear or indirectly derived from other laws. The new Resolution establishes explicit administrative fines for non-compliance, including:

• Failure to retain required information;
• Failure to provide information within the specified timeframe;
• Submission of incomplete or inaccurate information; and
• Intentional destruction, alteration, or concealment of records.

Administrative fines range from AED 20,000 to AED 100,000 depending on the nature and severity of the violation. Repeat offenses may result in doubled penalties. In addition, licensing authorities may suspend or cancel business licenses in cases of persistent non-compliance.

This enforcement architecture serves two purposes. First, it enhances the UAE’s credibility in international peer reviews by demonstrating effective implementation. Second, it incentivizes proactive compliance by businesses operating in the jurisdiction.

The availability of meaningful sanctions addresses one of the common criticisms faced by jurisdictions during Global Forum assessments: that information may technically exist but cannot be obtained effectively due to weak enforcement powers.

Interaction with international agreements

The UAE maintains an extensive network of double taxation agreements (DTAs) and has acceded to multilateral conventions that provide a legal basis for information exchange. The new EOI framework functions as the domestic enabling legislation that operationalizes these treaty commitments.

Information exchange may occur under:

• Bilateral double taxation agreements;
• Multilateral conventions on administrative assistance;
• Tax information exchange agreements;
• Other international arrangements entered into by the UAE.

The Resolution clarifies that exchange is limited to the scope permitted under applicable treaties and does not override national security or public order considerations. This ensures consistency between domestic law and international commitments.

Furthermore, the EOI framework complements the UAE’s participation in Automatic Exchange of Information (AEOI) regimes, including the Common Reporting Standard (CRS). While EOIR addresses case-by-case requests, AEOI facilitates periodic automatic transmission of financial account information. Together, these mechanisms form an integrated transparency architecture.

Implications for businesses and financial institutions

For businesses operating in the UAE, the strengthened EOI framework has immediate operational implications.

First, companies must assess whether their record-keeping systems meet the five-year retention requirement and ensure that documentation is readily accessible within the jurisdiction. Decentralized record storage or reliance on foreign affiliates for data retention may pose compliance risks.

Second, governance structures must be reviewed to ensure accurate and updated beneficial ownership information. Inaccuracies or inconsistencies across corporate records, beneficial ownership registries, and accounting systems could trigger enforcement action.

Third, financial institutions must be prepared to respond promptly to information requests transmitted through regulatory channels. Coordination between compliance, legal, and finance departments will be essential to avoid delays or incomplete submissions.

Professional advisors — including tax consultants, corporate service providers, and auditors — also play a critical role. Advisers must ensure that clients understand their obligations under the EOI framework and implement internal controls to mitigate exposure to penalties.

Importantly, the Resolution reinforces that non-taxed entities are not exempt from transparency obligations. Even businesses benefiting from corporate tax exemptions or free zone incentives must comply with information retention and disclosure requirements.

Challenges and compliance considerations

Despite its strengths, the new framework presents practical challenges.

Smaller businesses may face resource constraints in maintaining detailed records and responding to formal requests within tight deadlines. Free zone entities accustomed to lighter compliance obligations may need to upgrade internal systems.

Cross-border groups must ensure consistency between UAE documentation and foreign reporting positions. Discrepancies could prompt inquiries not only under EOI mechanisms but also under transfer pricing or anti-avoidance frameworks.

Additionally, data protection considerations must be carefully managed. While the Resolution emphasizes confidentiality safeguards, companies must balance information disclosure obligations with contractual and privacy commitments.

Proactive compliance strategies, including periodic internal audits of record-keeping systems, will be essential to mitigate risk.

Conclusion

Cabinet Resolution No. 209 of 2025 marks a significant evolution in the UAE’s tax transparency regime. By establishing detailed record-keeping requirements, empowering the Ministry of Finance with explicit enforcement authority, and introducing structured administrative penalties, the UAE has created a robust and operationally effective Exchange of Information framework.

The reform aligns domestic legislation with international standards promoted by global transparency bodies and strengthens the country’s position as a cooperative and credible tax jurisdiction. For businesses, financial institutions, and advisors, the message is clear: transparency is no longer optional or procedural, it is an enforceable legal obligation embedded within the UAE’s modern tax system.

As global tax cooperation continues to deepen, jurisdictions that demonstrate effective implementation will retain investor confidence and regulatory legitimacy. Through its enhanced EOI framework, the UAE has positioned itself firmly within this evolving international landscape.

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