UAE: FTA Issues New Excise Tax Framework for Natural Shortages in Designated Zones

Alvarez and marsal, 26 June 2025: The UAE Federal Tax Authority (FTA) issued Decision No. 6/2025, effective from 1 July 2025, introducing a structured framework for the reporting and management of natural shortages of excise goods within Designated Zones, in line with international tax standards.

FTA has established a detailed framework for managing the natural shortages of excise goods—those occurring due to uncontrollable factors during production, transportation, or storage. The regulation will require businesses to seek pre-approval from the FTA for any natural shortages within a permissible threshold. This threshold must be corroborated by an FTA-approved Independent Competent Entity (ICE), which will conduct assessments of production processes and storage facilities and issue a report that will be valid for up to a year, confirming allowable shortages. When significant changes occur that might affect loss ratios, prompt notification to the ICE will be mandatory.

The new procedural requirements come with rigorous documentation and reporting duties, and businesses will need to maintain comprehensive audit-ready documentation, supported by ICE findings. This includes real-time traceability of excise goods and full compliance with potential FTA inspections. Non-compliance will lead to a risk of excise tax relief being denied and potential penalties.

This decision replaces previous natural shortage procedures, changing the approach from discretion by the FTA to a more systematic approach with obligatory third-party assessments and set deadlines. It will specifically target natural shortages, with other loss types like theft or operational errors remaining under separate guidelines, such as EXTP007.

Businesses affected by these changes should submit pre-approval requests to the FTA, ensure alignment with ICE standards, and update their internal processes accordingly. They should also revisit previous shortage claims to ensure compliance with the newly established criteria.

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UAE: Ministry Announces Exemptions Under the Unemployment Insurance Scheme

Gulf Today, 16 June 2025: The Ministry of Human Resources and Emiratisation (MoHRE) confirmed specific categories exempt from participation in the UAE’s Unemployment Insurance Scheme (UIS).

These include investors actively engaged in their registered businesses, domestic workers, temporary contract workers, minors below 18 years of age, and pensioners who are re-employed while drawing a pension.

Launched to provide compensation for unemployed individuals, the UIS requires remaining eligible participants to fulfil four key conditions: maintaining a minimum uninterrupted subscription period of 12 months, ensuring termination is not due to disciplinary reasons as per Federal Decree-Law No. 33/2021, preventing fraudulent claims or fictitious employment, and having compensation halted upon securing new employment during the payout period.

The decision impacts stakeholders within these exempt categories by relieving them of insurance dues, simplifying regulatory compliance for specific employment types.

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UAE: Cryptocurrency for Salaries and Payments

Khaleej Times, 4 June 2025: The UAE is set to integrate cryptocurrency into daily transactions, allowing residents to pay bills, traffic fines, and receive salaries in digital currencies.

Residents and businesses across the UAE, will be able to use cryptocurrencies for utility bills, groceries, and other payments. The legal precedent was set by a Dubai court when it ruled allowing an employee’s dues to be paid in both dirhams and cryptocurrency, as per their contract.

To use crypto currencies, businesses have to adapting their payment systems to accept cryptocurrencies, and residents would have to ensure compliance with the legal framework governing digital transactions.

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UAE: Banks to Increase Minimum Balance Requirement

Khaleej Times, 20 May 2025: Several banks in the UAE have announced an increase in the minimum balance requirement from AED 3,000 to AED 5,000 as per the Central Bank’s personal loan regulations.

Customers who do not maintain the new minimum balance will incur a monthly fee of AED 25, unless they hold a credit card or have personal financing with the bank. The decision aims to enhance banks’ deposit levels and cover the costs of maintaining customer accounts.

Customers with a total balance of AED 20,000 or more, or a monthly salary transfer of AED 15,000 or more, will be exempt. Those with salary transfers between AED 5,000 and AED 14,999 who also have a credit card, overdraft facility, or loan will also be exempt.

Finance experts have raised concerns about the financial disadvantage to low-income workers, urging banks to reconsider the increase or offer varied minimum balances based on salary ranges. Alternative options, such as using money exchanges or financial institutions for salary disbursement, are suggested to mitigate the impact on affected workers.

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Fujairah: Police Announce New Traffic Plan for Pedestrian Safety

Khaleej Times, 20 May 2025: The Fujairah Police have unveiled a comprehensive traffic plan aimed at improving pedestrian safety across the emirate.

This initiative involves the establishment of new pedestrian crossings and the redesign of existing hazardous ones. The decision targets both drivers and pedestrians to reduce run-over accidents and promote safe crossing practices.

The plan aligns with Article 89 of Federal Decree-Law No. 14/2024 on the Traffic and Road Law, which penalises jaywalking with a fine of 400 AED. It forms part of a broader operational strategy for 2025, including a campaign titled “Pedestrians Have the Right to Cross Safely.” This campaign aims to lower mortality and injury rates by encouraging the use of designated crossings and discouraging risky behaviours.

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UAE: Federal Tax Authority Clarifies Corporate Tax Rules for REIT Investors

The Finance World, 7 May 2025: The UAE Federal Tax Authority (FTA) issued a clarification CTP005 on the Taxation of investors in a Real Estate Investment Trust (REIT) that is exempt from Corporate Tax as a Qualifying Investment Fund

The clarification covers the income that will be taxed in the hands of juridical persons that are investors in a REIT and the relevant Tax Period in which the income will be taxed for such investors. It also provides information on the compliance obligations of the REIT and the investors.

A REIT that meets the conditions of Article 10(1) of Federal Decree-Law No. 47/20221 and Article 4(1) of Cabinet Decision No. 34/20252 can make an application to the Federal Tax Authority to be exempt from Corporate Tax as a Qualifying Investment Fund. Where a REIT is exempt from Corporate Tax, the Taxable Income of a juridical person that is an investor in the REIT is adjusted to include 80% of the prorated Immovable Property Income of the REIT. However, if the REIT makes a distribution within nine months from the end of its Financial Year and the investor has not received the dividend distribution due to the disposal of its entire Ownership Interest in the REIT, the investor will not be subject to Corporate Tax on the Immovable Property Income of the REIT.

A REIT must provide specific information in respect of the period to which the distribution relates, or the relevant Financial Year of the REIT, as the case may be. This includes the amount of Immovable Property Income of the REIT; whether the REIT is a distributing fund for such Financial Year; and the amount of tax depreciation deduction for each investment property.; any disposals of investment property for which a tax depreciation deduction was previously claimed. A REIT is not required to provide investors with information that is not relevant to the investor’s Corporate Tax obligations or which the investor has an obligation to keep in their own records, such as the investor’s own acquisition cost or disposal proceeds of an Ownership Interest in the REIT.

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UAE: Securities Authority Imposes Disciplinary Actions for Market Violations

Mubasher, 6 May 2025: The UAE Securities and Commodities Authority (SCA) has issued a financial penalty of AED 100,000 to an investor for engaging in pre-emptive trading activities.

The relevant regulation governs trading, clearing, settlement, transfer of ownership, and custody of securities.

In a separate disciplinary action, the SCA revoked a preliminary approval of an employee holding the position of “Promotion Manager” at a licensed company. The revocation followed the employee’s proven misconduct during an examination on the UAE’s financial systems and regulations.

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