Hannah Gutang, Author at LexisNexis Middle East

Dubai: Enacts New Fines for Foreign Banks

16/01/202516/01/2025
by Hannah Gutang

In a significant move to regulate foreign banking operations within the Emirate, the Executive Council has issued Dubai Executive Council Decision No. 101/2024.

This decision, effective immediately upon its publication in the Official Gazette, outlines a comprehensive framework for administrative violations and fines applicable to foreign banks operating in Dubai.

The decision, rooted in the provisions of Dubai Law No. 1/2024 on the taxation of foreign banks, aims to ensure compliance with financial regulations and enhance transparency within the sector.

It stipulates a range of fines for various administrative violations, with penalties escalating for repeated offences.

Key provisions include fines for delays in submitting tax returns and supporting documents, with penalties set at AED 1,000 for each day of delay.

More severe violations, such as submitting falsified documents, incur fines of AED 20,000 per incident.

Additionally, banks failing to report changes in contact information or the suspension of operations face fines of AED 20,000.

The decision also mandates that all fines collected will be directed to the Public Treasury of the Dubai Government, reinforcing the commitment to fiscal responsibility and governance.

This regulatory update underscores Dubai’s dedication to maintaining a robust and compliant financial environment, aligning with international standards and fostering a transparent banking sector.

The decision is part of a broader strategy to enhance the Emirate’s financial regulatory framework, ensuring that foreign banks comply with local laws and contribute positively to Dubai’s economic landscape.

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News developments

Bahrain: Recommends Extending Environmental Protection Appeals Period

16/01/202516/01/2025
by Hannah Gutang

The Daily Tribune, 10 January 2025: The House of Representatives’ Public Utilities and Environment Committee has endorsed a legislative proposal aimed at extending the appeal period for administrative decisions under the environmental protection and wildlife conservation law from 30 to 60 days.

The proposal highlights that the current 30-day timeframe may not be adequate for stakeholders to effectively challenge decisions.

Extending the appeal period would allow for a more comprehensive review before initiating legal action.

The proposal also points out that many Bahraini laws already permit a 60-day appeal period for administrative decisions.

For example, Bahrain Law No. 27/2022 concerning biological and toxin weapons allows for a 60-day appeal period following the rejection of an appeal.

While the Ministry of Oil and Environment and the Supreme Council for the Environment have refrained from expressing a governmental stance, the Supreme Judicial Council has stated that it is not within their jurisdiction to provide an opinion at this stage.

The proposed law is set for discussion and voting in the House of Representatives.

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News developments

Kuwait: Considers Introducing VAT

15/01/202515/01/2025
by Hannah Gutang

Gulf News, 12 January 2025: Kuwait is weighing the introduction of VAT as GCC nations continue to reform their tax frameworks to diversify revenue sources and align with global standards.

The VAT adoption follows similar measures by other GCC countries, including Saudi Arabia and Bahrain, which have increased their VAT rates to 15% and 10%, respectively.

Qatar and Kuwait are expected to introduce VAT soon, further diversifying income beyond oil revenues.

VAT was introduced across the UAE since 2018 at a standard rate of 5%.

The introduction of VAT represents a pivotal step in the region’s economic transformation, providing governments with additional revenue to reinvest in infrastructure, public services, and sustainable development.

These efforts align with broader global trends as GCC nations modernise their economies and reduce dependence on hydrocarbons.

In addition to VAT, GCC countries are implementing the OECD-endorsed global minimum corporate tax rate of 15%, targeting multinational corporations with revenues exceeding €750 million.

This measure is designed to curb tax avoidance and ensure fair contributions from companies operating in historically low-tax jurisdictions, such as Dubai and Manama.

The UAE has already introduced a 9% corporate tax for businesses with profits above AED 375,000, while maintaining exemptions for small and medium enterprises and tax-free zones to retain its competitive edge.

Kuwait, along with other GCC nations, has implemented the 15% profit tax rate, and Bahrain is set to align with global tax regulations by 2025.

Saudi Arabia and Oman have joined the OECD framework, signaling a unified approach to corporate taxation.

Qatar, maintaining a 10% corporate tax, has indicated plans for future reforms.

Despite these changes, the GCC remains attractive for businesses, owing to its no-income-tax policy.

While Oman has considered a personal income tax for high earners, most GCC nations remain committed to a tax-free income environment.

To enhance compliance and efficiency, the region is embracing digital tax initiatives.

Saudi Arabia and the UAE have introduced e-invoicing systems to reduce fraud and streamline operations for businesses, showcasing their commitment to modernising tax systems.

These reforms aim to strengthen economic resilience, attract investment, and support job creation, positioning the GCC as a hub for sustainable growth and innovation.

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News developments

Sharjah: Approves UAE’s First Bill on Natural Resources Corporate Tax

14/01/202514/01/2025
by Hannah Gutang

Khaleej Times, 12 January 2025: Sharjah’s Consultative Council has approved a groundbreaking bill on corporate tax for extractive and non-extractive natural resources, marking a first in the UAE.

This draft law is designed to regulate the taxation of companies involved in the extraction and use of natural resources, covering both mineral extraction and associated activities.

The initiative is part of a broader strategy to enhance Sharjah’s tax system, ensuring effective governance and adherence to regulatory standards.

The legislation aims to create a comprehensive framework for economic activities related to natural resources, thereby boosting public revenues to fund development projects within the emirate.

The decision was made during the council’s seventh meeting at its headquarters in Sharjah, as part of its agenda for the second regular session of the eleventh legislative term.

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News developments

Abu Dhabi: New Labour Laws Allow Companies to Hire Remote Workers

10/01/202510/01/2025
by Hannah Gutang

Khaleej Times, 9 January 2025: Abu Dhabi has introduced new employment regulations that empower companies to hire remote workers and offer more flexible working arrangements.

The Registration Authority (RA) of the Abu Dhabi Global Market (ADGM), the international financial centre of Abu Dhabi, has published these new laws to provide greater clarity to employers and employees regarding their rights and obligations.

A significant change in the regulations is the amendment of the definition of an “employee” to include remote and part-time work.

This change reflects the evolving nature of the workforce and aims to accommodate diverse working styles.

The new regulations will come into effect on 1 April 2025, allowing employers ample time to adjust their internal policies, employment contracts, and other employment-related matters to comply with the new requirements.

As per the new law, employers are responsible for providing and maintaining the technical equipment necessary for employees to perform remote work.

This ensures that remote workers have the tools they need to be productive and efficient.

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News developments

UAE: Government Issues Federal Decree-Law to Reorganise Civil Defence Authority

10/01/202510/01/2025
by Hannah Gutang

The UAE Government has issued a Federal Decree-Law to reorganise the Civil Defence Authority, aiming to enhance the country’s readiness to respond to emergencies and disasters while ensuring the highest standards of public safety and protection.

This Decree marks a significant step in modernising the national civil protection framework.

The reorganisation focuses on improving coordination between local and federal entities working in civil defence, developing advanced alert and evacuation systems, providing care for affected individuals, and forming specialised teams for relief efforts.

The Decree establishes a new entity named the “Civil Defence Authority”, part of the National Emergency, Crisis, and Disasters Management Authority.

This new body replaces the Civil Defence Department previously operating under the Ministry of Interior.

The Civil Defence Authority is tasked with strategic responsibilities to enhance civil protection and ensure comprehensive readiness to address risks and disasters.

These responsibilities include developing policies, strategies, and regulations related to civil defence in coordination with relevant entities, studying potential risks and incidents, and preparing plans to manage them efficiently.

The Authority is also responsible for creating hazards prevention programmes and establishing safety standards, securing buildings and facilities against fire hazards, and deploying rapid response teams to incident sites to extinguish fires effectively.

The Authority’s duties extend to establishing and equipping specialised risk management centres and public alert systems to warn residents of potential hazards.

It also prepares evacuation plans for residents when necessary and ensures residential and institutional buildings are adequately equipped.

Medical and social care is provided for affected individuals in collaboration with relevant entities.

To further bolster national preparedness, the Authority is tasked with procuring and maintaining equipment essential for civil defence operations.

It also coordinates essential services—medical, social, engineering, administrative, and educational—to ensure continuity during times of disasters.

Additionally, the Authority organises efforts and collaborates with entities that have internal security systems, such as oil companies and airports, to provide support as required.

The Civil Defence Authority is committed to forming specialised teams to carry out response and relief operations in affected areas.

It organises joint training programs for civil defence personnel and volunteers and implements awareness campaigns to educate residents on the necessary actions during emergencies.

The Authority’s responsibilities also include monitoring radiological, chemical, and biological hazards and taking the necessary measures to address them in coordination with relevant authorities.

Furthermore, it enhances cooperation among UAE emirates to establish support centres that improve civil defence services at national and international levels.

The Civil Defence Authority prioritises coordination with entities that maintain internal security and safety systems, such as oil companies and airports, to ensure effective support and assistance when required.

This includes organising methods for providing aid and fostering efficient collaboration during emergencies.

The Civil Defence Authority is tasked with forming specialised teams for response and relief operations in disaster-affected areas.

It organises training programmes and joint simulation exercises for civil defence personnel and volunteers to enhance their readiness for various emergency scenarios.

Additionally, the Authority oversees awareness campaigns to educate residents about necessary precautions and procedures during emergencies.

The Authority requires entities to refrain from issuing any licences for properties or facilities unless they first obtain a certificate verifying compliance with safety and prevention standards.

The Decree establishes a dedicated committee to review compensation claims related to damages caused by civil defence operations, with a grievance mechanism in place.

It also enforces strict penalties, including imprisonment of up to six months or fines of up to AED250,000 for violations of the law or disruptions to civil defence activities.

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News developments

Saudi Arabia: Amends Traffic Law to Penalise Driving With Expired Vehicle Registration

10/01/202510/01/2025
by Hannah Gutang

Saudi Arabia has introduced significant amendments to its Traffic Law, making driving with an expired vehicle registration (istimara) a traffic violation.

The amendment involves the cancellation of Article 71 of Saudi Arabia Cabinet Decision No. 315/1428, which previously imposed a fine of SR100 for each year or part thereof for delayed renewal of driving licenses and vehicle registrations, with a maximum fine of SR300.

The fine was applicable after 60 days from the expiry date.

Additionally, a new paragraph has been added to the Traffic Violations Schedule, explicitly stating that driving with an expired vehicle registration is a violation.

In the same session, the Cabinet approved the Petroleum and Petrochemical Products Law and tasked King Abdullah University of Science and Technology with overseeing the Saudi Centre for Vaccines and Protein Treatments.

Minister of Media has highlighted the Cabinet’s review of recent government activities aimed at enhancing international cooperation and addressing global challenges.

The Cabinet has also addressed the situation in the occupied Palestinian territories, condemning Israeli actions and advocating for a ceasefire in Gaza.

Domestically, the Cabinet has assessed progress in development programs focused on economic diversification and resource optimisation.

Several international agreements were approved, including MoUs with Uruguay in sports, North Macedonia in Islamic affairs, Singapore in justice, and Morocco in health.

Agreements were also made with Qatar in digital government, Eswatini in air services, and Peru in financial intelligence.

The Cabinet endorsed final accounts for various Saudi authorities and funds for previous fiscal years.

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News developments

Qatar: Amendments to Income Tax Law

10/01/202510/01/2025
by Hannah Gutang

The Shura Council approved amendments to the Income Tax Law, aiming to ensure tax fairness between local and global companies operating in Qatar by establishing a global minimum corporate tax rate of 15%.

Analysis

Qatar Shura Council approved amendments to the Income Tax Qatar Law No. 24/2018. The amendments aim to ensure tax equity between local and multinational companies operating in Qatar by implementing a global minimum corporate tax rate of 15%. The General Tax Authority clarified that the new amendment applies exclusively to multinational corporations with foreign branches and annual revenues exceeding 3 billion Qatari Riyals, including Qatari companies with branches outside Qatar and global companies with branches in Qatar.

The amendment do not affect individual taxpayers or local companies operating in Qatar, which are currently subject to a 10% corporate income tax.

For the full story, click here.

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News developments

Oman: Issues Royal Decrees to Reform Penal Code and Tenant Laws

10/01/202510/01/2025
by Hannah Gutang

The Arabian Stories, 7 January 2025: Oman has issued two Royal Decrees yesterday, introducing significant amendments to key legal frameworks.

Oman Sultani Decree No. 11/2025 amending some provisions of the Penal Code.

Oman Sultani Decree No. 12/2025 amending some provisions of Oman Sultani Decree No. 6/1989 regulating the relationship between owners and tenants of residential, commercial and industrial premises and registering their lease contracts.

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News developments

Kuwait: Central Bank Enforces New Security Measures on Bank Card Transactions

10/01/202510/01/2025
by Hannah Gutang

Arab Times, 5 January 2025: The Central Bank of Kuwait has issued a directive to local banks to impose financial limits on bank cards and payment operations.

This move aims to enhance security and regulatory controls.

The directive emphasises the need for banks to manage transactions conducted through websites, especially those not requiring a one-time password (OTP), by setting conservative daily limits on both the total value and number of such transactions.

Banks are instructed to create a mechanism, accessible through branches or electronic banking services, allowing customers to adjust their bank card payment limits.

This system should be personalised to each customer’s profile, with notifications for any changes made.

Additionally, banks must seek approval from the Central Bank for these adjustments.

The Central Bank’s directive is part of its ongoing efforts to bolster regulatory controls, improve internal systems, and enhance security measures for all bank cards, including ATM, credit, and prepaid cards.

Banks are required to implement stringent controls on payment operations to ensure security.

Furthermore, the Central Bank stresses the importance of complying with regulations for electronic money payments.

This includes developing policies and systems to detect and address fraud, with mechanisms for reporting fraudulent activities to relevant authorities.

Banks must provide continuous updates on fraud cases as specified by the Central Bank.

Compliance with these instructions is mandatory, and banks are required to submit a detailed timeline for implementing these new requirements.

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