Dubai Archives - Page 10 of 29 - LexisNexis Middle East

UAE: Announces Amendments to Corporate Tax Law

13/12/202413/12/2024
by Hannah Gutang

Finance Ministry has announced updates in relation to certain provisions of Federal Decree-Law No. 47/2022 on the Taxation of Corporations and Businesses.

These amendments aim to enhance the business environment in the UAE and promote greater compliance with global standards for tax transparency and fairness.

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News developments

Dubai: 30% Alcohol Sales Tax to Return

13/12/202413/12/2024
by Hannah Gutang

Khaleej Times, 6 December 2024: Dubai will reinstate a 30% tax on alcohol sales starting 1 January 2025.

The Dubai Government has mandated the reinstatement of the 30% municipality tax on alcoholic beverage purchases, effective from January 2025.

All orders invoiced from 1 January 2025, will be subject to this tax, and Dubai Municipality has requested that all necessary systems be in place to ensure compliance.

Several restaurateurs have confirmed the move, noting its potential impact on consumer buying behaviours.

One executive director from a hotel and permit room mentioned that the reimposed tax could present an opportunity for outlets within hotels, as they may attract more guests who prefer discounted rates and deals on alcohol rather than purchasing directly from retail stores.

Previously, in January 2023, Dubai Municipality had announced the removal of the 30% tax on alcohol sales for a year, a measure that was extended until the end of December 2024.

A restaurateur, who has wished to remain anonymous, expressed surprise at the reinstatement of the full 30% tax, as they had anticipated a 15% rate.

However, alcohol retailers have now confirmed the return to the previous 30% tax.

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News developments

UAE: Announces 15% Domestic Minimum Top-Up Tax for Multinationals in 2025

10/12/202410/12/2024
by Hannah Gutang

Khaleej Times, 9 December 2024: The UAE is set to implement a new tax on multinational companies operating in the Emirates.

Large multinational enterprises (MNEs) must pay a minimum effective tax rate of 15% on their profits.

The Finance Ministry has announced that Domestic Minimum Top-up Tax (DMTT) will be effective for financial years starting on or after 1 January 2025 to establish a fair and transparent tax system aligned with global standards.

The Ministry has added that the DMTT will apply to multinational enterprises operating in the UAE with consolidated global revenues of €750 million (Approx Dh300 billion) or more in at least two out of the four financial years immediately preceding the financial year in which the DMTT applies.

Further details on this legislation will be issued by the Finance Ministry in due course.

The UAE continues to improve its business-friendly environment, reflecting its commitment to national strategic objectives such as strengthening economic competitiveness and improving ease of doing business.

This major update is in line with the country’s commitment to implement the Organisation for

Economic Co-operation and Development’s (OECD) Two-Pillar Solution.

To promote sustainable growth, innovation, and investment, the Finance Ministry is considering the
introduction of the following Corporate Tax Incentives under Federal Decree-Law No. 47/2022.

A research and development (R&D) tax incentive is being considered to encourage research and development (R&D) activities and foster innovation and economic growth within the UAE.

Based on feedback received during public consultations conducted in April 2024, the proposed incentive is expected to take effect for tax periods starting on or after 1 January 2026.

The R&D tax incentive will be expenditure-based, offering a potential 30-50% tax credit and will be refundable depending on the revenue and number of employees of the business in the UAE.

The scope of Qualifying R&D activities will be aligned with the OECD’s Frascati Manual guidelines and must be conducted within the UAE.

Another incentive being considered is a refundable tax credit for high-value employment activities.

This aims to encourage businesses to engage in activities that deliver significant economic benefits, stimulate innovation, and enhance the UAE’s global competitiveness.

This incentive is proposed to take effect on 2 January 2025 and will be granted as a percentage of eligible salary costs for employees engaged in high-value employment activities.

This includes C-suite executives and other senior personnel performing core business functions that add substantial value to the UAE economy.

The final form and implementation of the proposed incentives are subject to legislative approvals.

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News developments

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

05/12/202405/12/2024
by Hannah Gutang

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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News developments

Dubai: Strict Enforcement Actions by FSA Against Financial Misconduct

05/12/202405/12/2024
by Hannah Gutang

Khaleej Times, 27 November 2024: In 2024, the Dubai Financial Services Authority (DFSA) took strict action against a company that mismanaged client investment funds and an individual involved in money laundering.

In one case, a former relationship manager was fined nearly $1 million (around Dh3.6 million) for deceptive conduct and for facilitating the money laundering technique known as layering.

The Head of Enforcement at DFSA has explained ‘layering’ as a series of transactions to create the impression that the money has gone from one person to another, whereas it’s the same person or it’s the same people who are running the whole thing.

The individual, a private banker gave false information to his compliance function to allow that activity to continue, and he generated quite a lot of bonus income as a result of the commissions from those clients.

Another company, OCS International Finance, was fined for misusing clients’ funds.

They misled a bank about the nature of some money which they had deposited, and they then also misused the money.

That was client money which they had to protect and under the rules, they had to keep it in a separate account.

They did not do that, but they lent that money to a related party without telling the client they were doing it.

That related party then did not repay the money.

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News developments

UAE: Corporate Tax Registration Deadline for Resident Juridical Persons

29/11/202429/11/2024
by Hannah Gutang

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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News developments

Dubai: New Circular Outlines Requirements for Installment Requests

29/11/202429/11/2024
by Hannah Gutang

The Dubai Courts have issued a new circular outlining the requirements for accepting installment requests.

According to the circular, the installment request is first referred to the Settlement Department for review.

The department studies the request and negotiates with the parties to reach a settlement.

If a settlement cannot be reached, the conditions for accepting the installment request are verified, and the request is forwarded to the competent authority.

For an installment request to be accepted for consideration, the party must fulfill the following requirements: Payment of an initial installment of 20% of the outstanding amount before submitting the installment request.

The advance payment shall not be considered as final acceptance of the installment plan.

Proof of monthly income, which includes a salary certificate or an income statement from any other source.

Submission of a detailed bank statement for the last six months.

Proof of ownership: Submission of documents proving ownership of any assets such as real estate, vehicles, or stocks.

Submission of a declaration from the party outlining their overall financial situation and confirming the accuracy of the provided information.

The new circular aims to streamline the process of installment requests and ensure that parties provide accurate and comprehensive information to support their requests.

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News developments

DIFC: Reinforces Common Law Foundations and Enhances Real Estate Regulations

29/11/202429/11/2024
by Hannah Gutang

The Dubai International Financial Centre (DIFC) has enacted significant amendments to DIFC Law No. 3/2004 on Application of Civil and Commercial Laws and DIFC Law No. 10/2018, DIFC Real Property Legislation.

These changes solidify DIFC’s position as a leading international common law jurisdiction and enhance the regulatory framework for real estate transactions within the financial centre.

New Articles 8A and 8B has been added to the Application Law.

Article 8A of DIFC Law No. 3/2004 establishes that DIFC Law is determined first by DIFC statutes and court judgments, supplemented by the common law principles and rules of equity from England and Wales, as well as other common law jurisdictions.

Article 8B of DIFC Law No. 3/2004 states that interpretation of DIFC statutes may be guided by principles developed in analogous laws in established common law jurisdictions and international jurisprudence for model laws adopted by DIFC.

Real Property Law and Regulations Amendments: Introduction of a 0.25% Mortgage Registration fee based on the value of the mortgage being registered.

Extension of the registration period for Off Plan Sales from 30 days to 60 days, providing more time for purchasers to register transactions and pay the Freehold Transfer Fee.

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News developments

Lexis Middle East Law Alert: October-November 2024 Edition

27/11/202419/03/2025
by Hannah Gutang

Welcome to the October-November 2024 edition of Lexis Middle East Law Alert, providing insights into the changing legal landscape in the MENA regions. This issue focuses on the GCC countries’ efforts to attract foreign investment and diversify their economies away from hydrocarbons. The publication highlights Saudi Arabia’s new Investment Law, which aims to provide confidence to foreign investors by ensuring fair treatment, protecting ownership rights, and facilitating ease of exit. Additionally, it covers efforts to streamline business establishment processes in Saudi Arabia, as well as developments in the UAE, Bahrain, and the modernisation of Abu Dhabi’s judicial system.

Furthermore, the issue delves into other notable legal developments, including UAE virtual asset marketing regulations, changes to the ADGM Real Property Law, Bahrain’s Domestic Minimum Top-Up Tax, and insights into dispute resolution and contract watch for Saudi labour contracts. The publication serves as a comprehensive resource for staying updated on the latest legal trends and initiatives in the MENA regions, particularly those aimed at fostering a business-friendly environment for foreign investment.

Stay informed with our meticulously curated content, designed to keep you ahead in the ever-changing legal landscape.

FEATURE: EQUALITY AND OPPORTUNITY

Bedoor Alrabiah of GLA & Co explains that Saudi Arabia has a new Investment Law designed to create a more attractive investment environment there by better protecting local and foreign investors’ rights and providing them with more opportunities.

FEATURE: ALL CHANGE

Dhana Pillai, a representative from the Dubai Ports and Trade Corporation (DPTC), sheds light on how Abu Dhabi Law No. 6/2024 is designed to bring about a contemporary transformation of the judicial system in the emirate.

IN-HOUSE PROFILE: TECHNOLOGY’S REGULATORY IMPACT

Hilal Al Khulaifi, Group Chief Legal, Regulatory & Governance Officer, Ooredoo Group explains how dramatic technological change in
the telecoms sector could lead to a regulatory rethink.

DISPUTE RESOLUTION FOCUS

Waleed Hamad and Myriam Simon of Al Aidarous explain how a significant Dubai Court of Cassation ruling has clarified the legal framework surrounding the enforceability of foreign summary judgments in the UAE.

MOVERS AND SHAKERS

A round-up of the most notable appointments and career progressions within the legal field across the region, highlighting the pivotal shifts reshaping the professional landscape.

CONTRACT WATCH: SAUDI LABOUR CONTRACTS

Jassar Aljohani, along with Sara Khoja and Sarit Thomas from Clyde & Co, shed light on the significant amendments to the Saudi Labour Law, which aim to modernise the Saudi labour market, enhance workers’ rights, and streamline employer responsibilities.

Lexis Middle East Law Alert_October-November 2024

Explore the past editions of the Lexis® Middle East Law Alert and stay up-to-date with the latest news! Click the links below for instant access to older editions.

Lexis Middle East Law Alert_January-February 2024

Lexis Middle East Law Alert_May/June 2024

Lexis Middle East Law Alert_August-September 2024

Lexis Middle East Law Alert_July August 2023

TAX AND FINANCE ROUND-UP

Stay updated on the newest tax and financial news across the region, highlighting Bahrain’s recently introduced Domestic Minimum Top Up Tax.

LEGAL ROUND-UP

Stay informed with our legal round-up, providing a comprehensive overview of recent developments across the region with a spotlight on the UAE’s virtual asset marketing regulations.

LAW MONITOR

Delve into the latest legal advancements in the GCC, encompassing modifications to the ADGM Real Property Law.

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News developments

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

22/11/202422/11/2024
by Hannah Gutang

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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