Abu Dhabi Archives - Page 12 of 24 - LexisNexis Middle East

UAE: Tax Loss Utilisation Rules for Companies

08/11/202408/11/2024
by Hannah Gutang

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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News developments

Abu Dhabi: Occupational Safety and Health Awareness

08/11/202408/11/2024
by Hannah Gutang

Al Etihad, 1 November 2024: The Municipality of Abu Dhabi City has stressed to consulting offices and high-risk contracting companies the importance of fully complying with occupational health and safety requirements at construction sites.

It has emphasised the need to meet all standards set by the Abu Dhabi Occupational Safety and Health System.

This came during the awareness workshop organised by the Environment, Health and Safety Department in the Municipal Council hall in the Abu Dhabi City Municipality building, which aimed to enhance the awareness and commitment of consulting offices and contracting companies to preventive measures that would create an ideal, positive, and healthy work environment free of accidents.

The workshop’s topics included explaining the requirements of the Abu Dhabi Occupational Safety and Health System, and the mechanism for monitoring the implementation of these requirements in terms of submitting periodic reports, activity reports, auditing, and others.

The workshop was keen to raise the level of knowledge of newly registered construction and contracting entities about the requirements of the Abu Dhabi Occupational Safety and Health System.

Through these awareness workshops, the Municipality of Abu Dhabi City emphasises the necessity of maintaining the safety of workers in the construction sector and preserving their general health, as it is a top priority, as this sector is one of the most sensitive activities compared to all other sectors and businesses.

For the full story, click here.

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News developments

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

31/10/202431/10/2024
by Hannah Gutang

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.

For the full story, click here.

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News developments

ADGM: Enhancing Regulatory Framework for Sustainable Financial Practices

31/10/202431/10/2024
by Hannah Gutang

The ADGM Financial Services Regulatory Authority (FSRA) has published a Consultation Paper aimed at enhancing its regulatory framework to ensure continued alignment with the guidelines outlined by the Basel Committee on Banking Supervision (BCBS).

The key areas of enhancements to the regulatory framework pertain to corporate governance expectations, requirements around notifications to the FSRA, related party transactions, provisioning for credit exposures, stress testing expectations, designation of domestic systemically important banks, and expectations around the management of country risk and transfer risk.

This consultation paper is of interest to all Authorised Persons operating in ADGM or seeking to do so, particularly banks, insurers, and entities authorised to provide credit or manage profit-sharing investment accounts (PSIAu) in ADGM.

The FSRA seeks feedback to establish a regulatory environment built on a solid foundation that supports sustainable financial practices.

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News developments

UAE: FTA Publishes New Guide on Tax Residency and Tax Residency Certificate

24/10/202424/10/2024
by Hannah Gutang

On 18 October 2024, the UAE Federal Tax Authority (FTA) had published a new guide titled Tax Residency and Tax Residency Certificate – Tax Procedures Guide (TGPTR1).

The guide covers various aspects of tax residency, reviewing the relevant criteria under UAE tax laws and double taxation agreements (DTAs) and offering several examples.

It provides guidance on how a UAE tax resident can obtain a Tax Residency Certificate (TRC) or request the FTA’s stamp on an original TRC form issued by another jurisdiction.

One of the key aspects the guide addresses relates to the Place of Effective Management (POEM) as a criterion for determining UAE corporate tax residency.

The guide analyses the facts and circumstances that need to be considered when deciding if key management and commercial decisions, on the basis of which POEM is determined, are made in the UAE or elsewhere.

It indicates various criteria for identifying persons who make key management and commercial decisions for the company, outlining three tests: the board of directors test, the delegation of authority test, and the shareholder activity test.

The guide offers various examples of when the POEM is in the UAE (e.g., board meetings held virtually when the majority of directors are physically located in the UAE) or not (e.g., when key management and commercial decisions are made in the UAE on an occasional or one-off basis).

The guide also explains who can qualify for the TRC and the procedures to follow to obtain it.

A TRC cannot be obtained for future periods or periods exceeding 12 months.

When a TRC is needed for the current period, the FTA will review the application after three months into the period for juridical persons, as soon as the criteria to be a Tax Resident are met for natural persons, and one day into the period for Government Entities and Government Controlled Entities.

The new guide is essential for those handling corporate tax in the UAE or navigating global tax responsibilities.

Although not legally binding, it will certainly help businesses and individuals optimise their tax strategies.

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News developments

Abu Dhabi: Digital Notary Service

24/10/202424/10/2024
by Hannah Gutang

The Abu Dhabi Judicial Department has launched a digital notary services platform for conducting notary transactions and attestations using AI technology.

The service provides approved templates and forms of powers of attorney, declarations, and contracts by notary publics. It enables approved transactions to be issued without human intervention, in both Arabic and English languages.

The digital platform has been designed to improve the process for completing notary transactions and authentications by shortening unnecessary steps and reducing the required inputs using user data from the government data interchange after a user has registered with the UAE Pass. It will be particularly useful for land transactions in Abu Dhabi, licensed vehicles, and for commercial licenses issued by the Emirate. It will also be possible to be used for registered cases, and powers of attorney issued by the Judicial Department.

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News developments

UAE: Eases Corporate Tax Compliance for Businesses

18/10/202418/10/2024
by Hannah Gutang

The National, 14 October 2024: The UAE’s Ministry of Finance has cancelled economic substance reporting requirements for companies with a financial year ending after 31 December 2022.

This move aims to help companies focus on compliance with the UAE corporate tax system.

The amendment to Cabinet Decision No. 57/2020 on economic substance requirements aims to enhance efficiency and tax compliance across the country, ensuring accurate application of tax legislation by all entities subject to it.

The UAE has introduced a federal corporate tax with a standard statutory rate of 9% starting from the financial year beginning on or after 1 June 2023.

It brought the income of companies exceeding Dh375,000 ($102,100) within the taxable bracket, while taxable profits below that level will be subject to a tax of 0%.

While companies are no longer required to submit economic substance notifications or reports for financial years ending after 31 December 2022, they remain responsible for fulfilling compliance obligations for previous years and paying any penalties imposed by the Federal Tax Authority (FTA).

The UAE has also announced a deadline extension for corporate tax returns and payments for some entities.

Businesses with short tax periods ending on or before 29 February 2024, can now file their returns and make payments by 31 December 2024.

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News developments

Abu Dhabi: Bolstering Real Estate Regulations and Launching Digital Platform

17/10/202417/10/2024
by Hannah Gutang

The Abu Dhabi Global Market (ADGM) has announced significant enhancements to its Real Property Regulations, introduced new off-plan development regulations, and launched a unified digital platform, AccessRP.

Analysis

Key enhancements of the revamped regulatory framework aligned with English Common Law and best onshore practices in the region:

– regulatory legislation for short-term residential leases;

– enhanced legislation for off-plan development;

– off-plan sales;

– escrow arrangements; and

– a new registration framework for real property and professionals such as brokers, valuers, and property managers.

The AccessRP digital platform will provide a comprehensive range of real estate services, including transaction services for buying, selling, leasing, and mortgages, as well as new developer services for off-plan development, project registration, and account management. Additionally, the platform will offer owner services such as certificate issuance and Power of Attorney registrations, enhancing the customer experience and easing real estate procedures within ADGM’s jurisdiction.

In this regard, the ADGM has issued the Real Estate Regulations 2024 and Off-Plan Development Regulations 2024.

Real Estate Regulations 2024

ADGM’s Real Property Regulations provide a comprehensive framework for the administration and management of real property interests and transactions within its jurisdiction. The regulations cover various aspects, including types of real property interests and conveyances, registration processes, the establishment and maintenance of a real property register, provisions for joint holders, transfers, eminent domain, leases, mortgages, statutory charges, easements, covenants, deceased estates, writs, caveats, and instruments.

They outline the appointment and duties of the Registrar, the contents of the register, and the requirements for initial registration of real property and titles. They also address specific matters such as joint ownership, severing joint tenancy, lease obligations, permitted uses, variations, terminations, and renewals, as well as mortgage requirements, variations, discharges, and foreclosure procedures.

Covering the registration and management of statutory charges, easements, covenants, and deceased estates, they provide guidelines for writs of execution, caveats, and the execution and lodgement of instruments and outline the powers and proceedings against the Registrar, search procedures, existing rights, contraventions, and miscellaneous provisions.

Furthermore, the regulations include transitional provisions specific to Al Reem Island, addressing existing musataha, usufruct, ownership, granted land, and lease interests, as well as corrections to the register, priority of registered instruments, and the application of these regulations to real property located on Al Reem Island and Al Maryah Island.

Off-Plan Development Regulations 2024

It provides a comprehensive framework for the regulation of off-plan real estate development and sales within the Abu Dhabi Global Market (ADGM) jurisdiction. It covers the establishment and contents of registers, publication of information and search procedures, registration requirements for off-plan developers, and the process for registering off-plan projects.

The regulations outline restrictions on off-plan sales, application procedures for developer registration, building permits, and approvals. They also address the relationship between developers and the Registrar, notification requirements, and administrative services.

Furthermore, they detail the registration process for off-plan projects, including project name registration, application requirements, utility contracts, mortgage restrictions, and registration on the Real Property Register. Provisions related to project accounts are also included.

The regulations specify the form and disclosure requirements for off-plan sales agreements, as well as procedures for handling major changes and failure to pay the purchase price.

The outline also covers the powers of the Registrar, including the authority to request information, waive requirements, state cases, correct registers, and collect fees.

Transitional provisions are outlined for ongoing off-plan developments on Al Reem Island, including provisions for further extensions of time.

Finally, the regulations address contraventions, sanctions, warning and decision notices, the Registrar’s procedures, the right to refer decisions to courts, access to materials, protected items, publication, censure statements, suspension, cancellation, and fines.

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News developments

Abu Dhabi: Guidance Manual for Safe Use of Bicycles and Scooters Updated

10/10/202410/10/2024
by Hannah Gutang

Atheer, 3 October 2024: The Abu Dhabi Quality and Conformity Council has approved the update of the guidance manual for the safe use of bicycles, electric bicycles, and scooters in the Emirate.

The updated manual aims to support service providers and users by outlining the classifications, requirements, and specifications for permitted use, as well as safety guidelines and infrastructure needs.

This is in accordance with Abu Dhabi Administrative Decision No. 21/2022 on Regulating the Use of Bicycles in the Emirate of Abu Dhabi.

This update promotes sustainable transportation, enhances public safety, and aligns with international standards for short-distance mobility services.

For the full story, click here.

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News developments

UAE: Exempts Cryptocurrencies and Virtual Assets from VAT

09/10/202409/10/2024
by Tanya Jain

Khaleej Times, 7 October 2024: The UAE has introduced amendments to the Executive Regulations of Federal Decree-Law No. 8/2017 on VAT, exempting certain activities related to cryptocurrencies and virtual assets from VAT.

This move aims to establish the UAE as a hub for investment activities and support the growth of the financial sector.

The amendments, approved by the UAE Cabinet through Cabinet Decision No. 100/2024, exempt digital representations of value that can be digitally traded or converted and are intended for investment purposes from VAT. However, this exemption does not extend to digital representations of fiat currencies or financial securities.

The scope of the exemption covers transfers, conversion, keeping, and managing virtual assets, essentially encompassing cryptocurrency trading.

Additionally, the amendments provide exemptions for investment fund management services, including the management of fund operations, investments, and performance monitoring.

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