UAE: Eases Corporate Tax Compliance for Businesses

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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UAE: Exempts Cryptocurrencies and Virtual Assets from VAT

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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UAE: Hajj Permit Requirements for Citizens

Emaratalyoum, 29 September 2024: The General Authority for Islamic Affairs, Endowments and Zakat has set three conditions for obtaining a Hajj permit for the upcoming season, as per Cabinet Decision No. 32/2018 regarding the Hajj and Umrah system.

The applicant must be a citizen of the UAE, be at least 12 years old, and must not have performed Hajj during the last 5 Hajj seasons.

Priority in granting Hajj permits will be given to those who have not previously performed Hajj, including disabled people, those with intractable diseases, the elderly, and mahrams and companions who meet the conditions, taking into account those who have priority in registration in the electronic system.

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UAE: Guidelines on Use of Internet in Schools

Emaratalyoum, 22 September 2024: A set of guidelines have been introduced on the use of information technology in government and private school premises in the UAE.

The guidelines restricted the use of the Internet in schools solely for educational purposes and within the regulations, rules, and laws. Schools have prohibited the use of information technology to receive, send, or distribute any materials that violate the applicable instructions, regulations, and laws. Schools have circulated a list of 19 prohibited violations to students and teachers to ensure a safe electronic environment in educational establishments. They emphasised ensuring all students and staff are aware of the risks of internet use and using it responsibly and safely for study purposes. Violating these instructions may lead to pupils being permanently expelled from the school.

The 19 prohibited violations for all users of school computers and internet services include using email to threaten or harass others, sending or posting disturbing images online, using the internet for any form of piracy such as music, movies, or software, sharing or using others’ passwords, violating copyright laws on downloading or copying electronic files for personal use, sharing confidential school matters or information without permission, compromising the school’s electronic systems’ security by introducing malware, using the internet for personal purposes, visiting unauthorised websites, distributing inaccurate, offensive, or defamatory information, using inappropriate threatening language in communications, damaging devices or software, intentionally causing harm to someone’s work or program, engaging in cyberbullying, impersonating others online, plagiarising work, accessing pornographic or hate-promoting websites, disclosing personal information without permission, visiting social media sites without permission, and using someone else’s information and work without permission.

The electronic safety policy outlines acceptable internet uses for students, including using web browsers for educational purposes, research, and gathering information from various websites and databases; using the internet to share documents and tasks that promote collaborative work; maintaining the confidentiality of personal usernames and passwords; not sharing passwords with anyone; not attempting to access, modify, or change anyone else’s username, password, files, or data; sharing emails only with known and parent/teacher-approved individuals. There is also a prohibition on bringing mobile phones to school (which will be monitored by surveillance cameras). The internet can also be used for online tests or tasks approved or recommended by teachers; studying curriculum content online and performing related tasks as assigned by teachers; working on projects or lesson presentations; preparing global circulars, invitations, and booklets for community service or other school activities with teacher approval; accessing exam sites and practice papers; responsibly accessing social media sites for educational purposes only under teacher guidance. Pupils should also always use appropriate language in all digital communications through emails and social networks, and take care of all digital devices used.

Permitted uses of the Internet for teachers include adhering to responsible and effective Internet use, using the Internet only for school-related purposes, using email for school-related matters only, and participating in all activities that enhance and improve the employee’s professional aspect, including online research and training.

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UAE: Federal Authority Introduces Unified Employment Contract Model for Federal Sector

The Law Reporters, 16 September 2024: The UAE Federal Authority for Government Human Resources (FAHR) has unveiled a unified model for employment contracts within the federal government sector, a move aimed at streamlining and standardising employment terms for both Emiratis and expatriates.

This legal reform signifies a major advancement in the UAE’s employment framework, reflecting its commitment to fostering an inclusive, efficient, and well-regulated public sector.

The newly introduced employment contract model applies to all employees within the federal government, covering various employment types and work patterns.

It clarifies the different work patterns allowed under federal government employment, giving room for diverse roles and responsibilities while maintaining operational efficiency.

The reform includes provisions for flexible working hours, recognising the growing need for adaptable work schedules in a modern work environment.

One of the model’s most significant aspects is the specification of contract durations, providing clarity and transparency for both employers and employees.

Whether an individual is employed on a permanent, temporary, or project basis, the duration of the employment will be clearly stipulated.

The unified model is applicable to both Emiratis and expatriates employed in the federal government.

This inclusivity is in line with the UAE’s broader policies to integrate Emiratis into the public sector while ensuring that expatriates have clear and structured employment terms.

From a legal standpoint, this initiative represents a significant step towards reducing ambiguity and employment disputes in the public sector.

By standardising terms and conditions, the model enhances legal certainty for all stakeholders.

Employees now have a clear understanding of their rights and obligations, and employers can ensure compliance with unified guidelines.

The introduction of this contract model comes at a time when governments worldwide are reassessing employment frameworks to adapt to new work environments shaped by technological advancements, global mobility, and shifts in labour markets.

The UAE has consistently been at the forefront of such reforms, with this unified model being a testament to its proactive approach to labour governance.

The unified model also aligns with the UAE’s ongoing Emiratisation efforts, which aim to increase the number of Emiratis employed in the public and private sectors.

By creating a transparent, structured, and attractive employment framework, the federal government aims to encourage more Emiratis to join the workforce, knowing that their employment terms are safeguarded under this unified system.

The UAE’s move to introduce a unified employment contract model is a landmark reform that reflects the country’s legal sophistication and its ability to adapt to the evolving needs of the workforce.

It provides much-needed clarity on work patterns, flexible timings, and contract durations, ensuring fairness and legal consistency for both Emirati and expatriate employees in the federal sector.

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UAE: Streamlined Process for Withdrawing Absconding Reports Introduced

Khaleej Times, 6 September 2024: The Ministry of Human Resources and Emiratisation (MoHRE) has introduced a simplified process for both domestic workers and employers to file or withdraw absconding reports.

This initiative aims to provide a fair and transparent resolution for all parties involved.

According to the new guidelines, domestic workers can initiate the withdrawal process through MoHRE’s website, application, or by visiting designated domestic worker centres or Tawseel vehicles.

The service is available in all emirates except Dubai, where it can be accessed through the General Directorate of Residency and Foreigners Affairs.

To withdraw an absconding report, domestic workers must provide a copy of their Emirates ID, passport, and have a record of an absconding report lodged by their employer.

After filling out the application and paying the required fee (Dh115 online or up to Dh72 at business centres), MoHRE will verify the validity of the complaint.

Once approved, the worker can cancel the complaint without involving the employer within a week of the cancellation date.

Employers, on the other hand, can log into MoHRE’s portal or use their UAE Pass to submit an application for withdrawing the absconding report.

They must provide copies of the domestic worker’s Emirates ID and passport, and have a record of lodging a complaint against the worker for absence from work.

After paying the applicable fee and verification by MoHRE and the Federal Authority for Identity, Citizenship, Customs and Ports Security, the employer will receive final approval.

The new process aims to streamline the resolution of domestic worker disputes, with the latest amendments mandating that such cases be taken up at the Court of First Instance as a last resort if an amicable settlement cannot be reached with MoHRE.

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UAE: Circular Warns Against Violations in Marketing Calls for Securities and Commodities

Al-Ethihad, 3 September 2024: The Securities and Commodities Authority has urged the public to report marketing calls related to securities and commodities that violate the provisions and regulations outlined in Cabinet Decision No. 56/2024 on the regulation of telephone calls.

The Authority has outlined violations and practices that fall under the purview of the aforementioned resolution, including marketing of products not under the Authority’s supervision through unofficial channels without approval.

Using unjustified marketing pressures to convince individuals to accept a product or service.

Using false and misleading information when marketing a product or service.

Making marketing calls outside the authorised time frame of 9:00 AM to 6:00 PM.

Persisting after an initial rejection of a product or service.

Calling more than once a day or twice a week after no answer or call termination.

Not asking for consent before starting marketing, advertising, or promotion.

Not using registered local numbers issued by authorised telecommunications companies.

Making marketing calls from unregistered or non-company-owned numbers.

Receiving marketing calls from a company registered in the Non-Disclosure Register (DNCR).

Disclosing and trading personal data to third parties for marketing purposes.

Failure to indicate that the call is being recorded. Failure to disclose the company’s identity and purpose of the call at the beginning.

Additionally, any other violations of controls issued by the Authority.

The Authority has confirmed that companies approved for marketing securities and commodities via telephone can be verified on its website.

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