UAE: Mandatory Job Loss Insurance Scheme Now in Force

Gulf News (United Arab Emirates), 1 October 2023: The mandatory job loss insurance scheme is now in force. It means employees will now be fined 400 AED.

Employees who subscribe to the scheme but fail to pay the premiums for more than three months will now have their insurance certificate cancelled and be fined 200 AED.

If employees fail to pay the fines for three months from the due date, the amount will be deducted from their wages through the Wage Protection System, end-of-service gratuity, or any other alternative method deemed acceptable by the Human Resources and Emiratisation Ministry. This penalty will be specified in the relevant Ministerial Decision.

Under the relevant Ministerial Decision, employees will not be eligible for a new work permit until all fines owed are paid within the specified timeframe.

Investors, domestic helpers, temporary contract workers, those under 18, and retirees who are entitled to a pension and have started a new job are exempt.

Employees had to pay a premium to subscribe to the scheme. If they lose their jobs for anything other than disciplinary action or resignation, they will receive financial support for up to three months.

Premiums can be paid monthly, quarterly, bi-annually, or annually. To get the support employees must be subscribed to the scheme for at least 12 months. Subscriptions to the scheme began in January 2023 so if an employee subscribed to it in January, they will become eligible for compensation only if they lose their job after December 2023. If a person subscribes to the scheme this month, they will only become eligible after 12 months have passed.

Private sector employees, federal government departments, and free zones had until 1 October to subscribe to the Involuntary Loss of Employment (ILOE) scheme.

There are two types of plans. Category A is available to employees with a basic salary of 16,000 AED or less. The premium will be five AED plus VAT a month and will provide an employee with 60% of their basic salary up to 10,000 AED a month.

Category B is available to employees with a basic salary of more than 16,000 AED. The premium will be 10 AED plus VAT a month and will provide an employee with 60% of basic salary; up to 20,000 AED a month.

The benefits of the scheme will stop if the beneficiary gets a new job or leaves the UAE.

The employee must not have an existing absconding complaint against them.

Claims must be submitted within 30 days from the date of termination or the settlement of a labour complaint referred to the judiciary.

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UAE: Administrative Penalties for Commercial Agency Law Violations Decision Issued

Gulf News (United Arab Emirates), 11 September 2023: The UAE’s Economy Ministry has issued a Decision specifying the administrative penalties which will be imposed for Commercial Agency Law (Federal Decree-Law No. 3/2022) violations.

Among other penalties under Cabinet Decision No. 89/2023, an international business who sells its goods and services to entities or individuals other than the contracted commercial agent will receive a warning first and may then be fined between 100,000 and AED 400,000. Their goods may also be seized by UAE Customs.

In addition, other offences may see a warning given first and then fines of between 100,000 and 200,000 AED imposed. Goods may also be seized by UAE Customs.

Some repeat offences could see offenders fined up to 400,000 AED.

In addition, the new legislation will apply automatically to existing commercial agency contracts drafted before the new Commercial Agency Law came into force in June. Only contracts not being renewed or being terminated early will be exempt..

The Cabinet Decision has been published in the Official Gazette.

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Umm AlQuwain: New Property Laws Introduced

Arabian Business, 6 September 2023: Umm Al Quwain’s Ruler has introduced new property laws for the Emirate. The laws will regulate new rules on mortgages, property prices and investors’ rights, among other things. They have been issued to help develop and implement plans to drive growth in the sector and support the Emirate’s urban development plans.

Umm Al Quwain Law No. 2/2023 will allow an Interim Real Estate Register to be established and property registration activities in the Emirate to be regulated.

Umm Al Quwain Law No. 3/2023 will regulate real estate development activities in the Emirate, the pricing of all real estate projects and provide real estate escrow accounts, in line with regulations that ensure the rights of investors, real estate companies and property developers are protected.

Umm Al Quwain Law No. 4/2023 amends Umm Al Quwain Law No. 3/2007 on real estate escrow accounts in the Emirate. It sets out guidelines to help regulate real estate sales transactions better and ensure the compliance of all relevant parties with the regulation issued by the Real Estate Foundation.

Umm Al Quwain Law No. 5/2023 covers the regulation of mortgage registration activities through the Umm Al Quwain Municipality Department in line with the regulations issued by the UAE Central Bank and the settlement of issues and violations related to unregistered mortgages.

Umm Al Quwain Law No. 6/2023 relates to protecting the rights of investors where there are delays or hurdles in real estate development projects, as well as ensuring these projects are completed, when possible. It also provides for a special committee to handle issues related to cancelled and incomplete real estate projects to be established.

Finally, Umm Al Quwain Law No. 7/2023 amends Umm Al-Quwain Law No. 2/2005 on the regulation of real estate brokerage activities in the Emirate and sets out legislation and guidelines to regulate all brokerage activities.

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UAE: Federal Tax Authority Issues Corporate Tax Guide

The UAE’s Federal Tax Authority has announced it has issued a Corporate Tax Guide. The Guide has been issued following the issuing of Federal Decree-Law No. 47/2022 on the Taxation of Corporations and Businesses (Corporate Tax Law) on 3 October 2022 and its publication in the Official Gazette on 10 October 2022.

The law provides the legislative basis for imposing a federal tax on corporations and business profits in the UAE. The provisions of the law will apply to tax periods commencing on or after 1 June 2023.

Various Cabinet and Ministerial Decisions have since been published. The Guide is aimed at providing general guidance on corporate tax in the UAE with a view to making the provisions of the Corporate Tax Law as understandable as possible to readers.

It provides readers with an overview of the main corporate tax rules and procedures, including the determination of the corporate tax base, the calculation of corporate tax, the filing of corporate tax returns and other related compliance requirements and assistance with the most common questions businesses might have. In addition, the guide explains where further assistance should be sought if there are questions about the guide’s contents or areas not specifically dealt with in the guide.

It covers the fundamentals of the corporate tax regime in the UAE, including what corporate tax is, who is subject to it, what types of income are taxable and how a taxable person’s corporate tax liability is calculated as well. Finally, the guide explains the corporate tax administration process, from Tax Registration and record keeping to submitting returns and making payments.

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UAE: Federal Tax Authority Urges Businesses to Register for Corporate Tax

Gulf News (United Arab Emirates), 5 September 2023: The UAE’s Federal Tax Authority has urged businesses not to delay registering for corporate tax. Listed companies and private businesses whose financial years start on 1 June 2023 especially should not delay registering.

These companies have until February 2025 to pay their corporate tax obligations for the current financial year. Registration can be done via the EmaraTax portal on the Authority’s website.

Those who are already registered for VAT and excise tax can log in to their tax account on the EmaraTax portal. They will then need to select the taxable person, select the option to register for corporate tax and proceed with filling the registration form and providing documentation.

Once the application is approved, a Tax Registration Number for corporate tax will be issued.

Taxpayers who are not registered for VAT or excise tax will need to create a new user profile on the portal using the eservices.tax.gov.ae link and create an account using their email ID and phone number. Once the user profile has been created, registration can be completed by creating a taxable person profile, selecting the option to register for corporate tax and applying for registration.

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UAE: Foreign Affairs Ministry Announces Visa-free Travel List

Gulf News (United Arab Emirates), 28 August 2023: The UAE’s Foreign Affairs Ministry has announced nationals from more than 80 countries can now enter without a visa.

They are nationals from Australia, Switzerland, the Czech Republic, Slovakia, France, Greece, Hungary, Saudi Arabia, the UK, the US, Mexico, Japan, Andorra, Liechtenstein, Monaco, Ukraine, Barbados, Brunei Darussalam, the Solomon Islands, Azerbaijan, Estonia, Argentina, Uruguay, Albania, Brazil, Portugal, El Salvador, China, the Maldives, Germany, Austria, Ireland, Iceland, Italy, Paraguay, Bulgaria, Poland, Peru, Belarus, Chile, San Marino, Slovenia, Singapore, the Seychelles, Serbia, Finland, Cyprus, Kazakhstan, Croatia, Korea, Costa Rica, Colombia, Kiribati, Latvia, Lithuania, Malta, Mauritius, Nauru, Honduras Georgia, Luxembourg, Israel, Kuwait, Qatar, Vatican City State, Russia, Romania, Saint Vincent and the Grenadines, Oman, the Bahamas, Canada, Malaysia, Hong Kong, Spain, Bahrain, Denmark, Sweden, Norway, Belgium, the Netherlands, Montenegro and New Zealand.

More information can be found on the Foreign Affairs Ministry website or the Federal Authority for Identity, Citizenship, Customs, and Port Security’s website.

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