UAE: New Federal Traffic Law Introduces Stricter Regulations and Safety Measures

Khaleej Times, 3 December 2024: On 29 March 2025, a significant federal decree on traffic regulations will be implemented, introducing several key changes aimed at enhancing road safety.

The minimum driving age will be reduced to 17 years, allowing younger individuals to obtain a driver’s license.

In a bid to reduce noise pollution, the decree bans the operation of excessively noisy vehicles and restricts the use of car horns within city limits, except in situations where they are necessary to prevent danger or accidents.

The new regulations also prioritise pedestrian safety by prohibiting road crossings where speed limits exceed 80 km/h.

Authorities have emphasised that non-compliance will result in civil or criminal liability.

To deter serious traffic violations that could lead to fatal accidents, the law outlines “deterrent penalties” for offences such as driving under the influence of alcohol or narcotics, hit-and-run incidents, jaywalking, and driving in flood-prone areas during adverse weather conditions.

Additionally, transporting hazardous materials or unusual loads will now require a special permit from the relevant authorities, ensuring safer transportation practices across the country.

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UAE: Corporate Tax Registration Deadline for Resident Juridical Persons

The Federal Tax Authority (FTA) has renewed its calls for Resident Juridical Persons with Licences issued in October and November, regardless of the year of issuance, to promptly submit their Corporate Tax registration application no later than 30 November 2024, to avoid Administrative Penalties.

The FTA advises Taxable Persons to adhere to the timelines specified in Cabinet Decision No. 3/2024 on the Timeline for Registration of Taxable Persons for Corporate Tax, which came into effect on 1 March 2024.

Resident Juridical Persons incorporated or established before March 1, 2024, must submit their Corporate Tax registration application based on the month their Licence was issued, irrespective of the year.

For Taxable Persons holding multiple Licences on 1 March 2024, the deadline is determined by the Licence with the earliest issuance date.

Registration for Corporate Tax is available through the EmaraTax digital platform, accessible 24/7.

The process has been streamlined into four main steps, taking approximately 30 minutes. Taxable Persons can also register through authorised Tax Agents or government service centres.

The FTA has urged Taxable Persons subject to Corporate Tax to review the Corporate Tax Law, related decisions, and guidelines published on the FTA website: tax.gov.ae.

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UAE: Private firms Reminded To Meet Emiratisation Targets By Year End

Khaleej Times, 19 November 2024: Authorities in the UAE have reminded private sector companies to meet their 2024 Emiratisation targets by the end of December.

Non-compliant firms will face hefty fines starting from 1 January 2025.

Emiratisation policies apply to establishments with 50 or more workers, requiring them to increase the number of Emirati employees in skilled positions by 2% by the end of the year.

Failure to comply will result in a fine of Dh96,000 for each Emirati not hired.

Additionally, a select group of establishments employing 20 to 49 workers across 14 specified economic activities are also subject to Emiratisation policies.

These establishments must employ at least one Emirati and retain any nationals employed prior to 1 January 2024.

Non-compliance will also lead to a Dh96,000 fine for each Emirati not hired.

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UAE: Issues Federal Decree Establishing UAE Aid Agency

The UAE has issued a Federal Decree No. 27/2024 to establish the UAE Aid Agency, affiliated with the International Humanitarian and Philanthropic Council.

The agency will implement foreign aid programs, focusing on disaster relief, early recovery, post-conflict stabilisation, development, and capacity-building initiatives.

It aims to enhance the impact of the UAE’s global priority foreign aid and maximise positive outcomes in executing humanitarian relief programs and developmental projects worldwide.

The UAE’s leadership has emphasised the country’s commitment to addressing global humanitarian challenges, fostering sustainable development, and collaborating with international partners to create a lasting positive impact, especially in crisis-affected regions.

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UAE: Tax Loss Utilisation Rules for Companies

Khaleej Times, 4 November 2024: UAE companies must meet certain conditions to claim tax losses.

Tax losses can be carried forward without limitation provided the same person or persons continue to own at least 50% of the entity with the losses.

If there is a greater than 50% change in ownership, tax losses may still be carried forward provided there is no major change in the nature or conduct of the entity’s business.

Tax losses from one UAE group company may be used to offset the taxable income of another UAE group company where there is 75% or more common ownership and certain other conditions are met.

These conditions include both companies being UAE resident juridical persons, neither being an exempt person or a qualifying free zone business, and their financial statements being prepared using the same accounting standards and financial year.

Tax losses can, subject to certain conditions, be offset against the taxable income of future periods, up to a maximum of 75% of the taxable income in each of those future periods.

Any excess (unused) tax losses can be carried forward and used against taxable income of future tax periods indefinitely.

Example: A taxpayer has a taxable income of Dh360,000 and carried forward losses of Dh300,000.

It can offset (75% x Dh360,000) = Dh270,000 of its losses carried forward in the relevant tax period, reducing its taxable income to Dh90,000.

The amount of tax losses available for carry forward to subsequent tax periods would reduce to Dh30,000 (Dh300,000-Dh270,000).

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UAE: Regulator Sets Requirements for End-of-Service Gratuity Investment Funds

Mubasher, 28 October 2024: The UAE Securities and Commodities Authority (SCA) has established eight key requirements for companies licensed to manage end-of-service gratuity savings funds within the country.

These requirements are part of the optional alternative system for end-of-service benefits, known as the “savings scheme.”

Financial institutions that have obtained licenses from the SCA have highlighted that the most crucial requirements include determining the contribution rate, ensuring a safe investment of funds to address concerns about potential losses, and specifying the timing for receiving entitlements upon termination of employment.

The requirements also cover the possibility of employees increasing their contributions to maximise benefits, as well as the option to continue investing their entitled funds in the fund after termination of employment.

Additionally, the benefits for participating employees and employers who contribute to these funds have been outlined.

The SCA has granted the first-of-its-kind licences to “National Bonds Corporation” and “Daman Investments” to manage end-of-service gratuity savings funds within the UAE.

This move aims to facilitate the safe and reliable investment of employee gratuities, ensuring the protection of their rights and increasing the value of their entitlements while enhancing the UAE’s position as an attractive destination for work and investment in the region.

According to the National Bonds Corporation, the basic employer contribution rate for their capital-protected investment fund is 5.83% of the employee’s basic monthly salary for full-time employees with less than five years of service, and 8.33% for those with more than five years of service.

Employees can also voluntarily contribute a percentage of their salary or a fixed monthly amount, subject to a maximum of 25% of their annual salary.

Participating employees are entitled to receive all basic contributions made by their employer to the alternative end-of-service gratuity system, along with any accrued returns during the contribution period, within 14 days of termination of employment.

Beneficiaries have the option to continue investing their entitled funds in the fund, and employees can withdraw part or all of their voluntary contributions or investment returns at any time during their employment, subject to conditions set by the fund manager.

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