UAE: Launches Blue Visa

Khaleej Times, 12 February 2025: The UAE has initiated the first phase of the Blue Visa, unveiling the specifics of this ten-year residency permit at the World Governments Summit 2025.

This innovative visa is aimed at individuals who have significantly contributed to environmental protection and sustainability, both within the UAE and globally.

In this initial phase, twenty sustainability thought leaders and innovators will be awarded the Blue Visa, as announced by the Ministry of Climate Change and Environment and the Federal Authority for Identity, Citizenship, Customs and Ports Security (ICP).

The Blue Visa is designed to recognise and support those actively engaged in environmental action.

It is available to members of international organisations, global companies, associations, non-governmental organisations, as well as global award winners and distinguished activists and researchers in the field of environmental work.

This initiative is an extension of the UAE’s Golden and Green Residencies, which were introduced earlier to attract exceptional talent to the country.

To apply for the Blue Visa, interested sustainability advocates and experts can either apply directly to the ICP or be nominated by relevant authorities within the UAE.

The first phase of the application process is conducted electronically, allowing for the submission of applications through government agencies involved in sustainability sectors, following the procedures outlined on the ICP’s website.

The ICP ensures 24/7 access to the Blue Visa service for eligible individuals via its website and mobile application, complying to the approved terms and conditions.

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Fujairah: All Government Employees to Receive Comprehensive Health Insurance

Khaleej Times, 12 February 2025: In a move to enhance employee welfare, all government employees in Fujairah will now receive health insurance coverage.

This initiative is part of a decision by the Crown Prince of Fujairah to implement a comprehensive health insurance system for all workers across local government institutions and departments.

UAE: Announces Cabinet Decision on Introduction of Top-Up tax for Multinational Enterprises

The Finance Ministry has introduced Cabinet Decision No. 142/2024, detailing the new Top-up Tax for Multinational Enterprises, specifically the UAE Domestic Minimum Top-up Tax (UAE DMTT).

This follows a previous announcement made on 9 December 2024.

The UAE DMTT aligns with the GloBE Model Rules from the Organisation for Economic Co-operation and Development (OECD).

It targets entities within Multinational Enterprises (MNEs) operating in the UAE, with annual global revenues of €750 million or more, as reflected in the Consolidated Financial Statements of the Ultimate Parent Entity for at least two of the four financial years preceding the applicable financial year.

The tax offers relief through a Substance-based Income Exclusion, which reduces the net Pillar Two income subject to the UAE DMTT.

This is calculated based on payroll and the carrying value of tangible assets to determine Excess Profit for tax computation.

In line with the GloBE Model Rules, the UAE DMTT includes a de minimis exclusion, allowing an entity’s UAE DMTT to be zero if specific criteria are met.

To enhance the UAE’s appeal as an investment hub, Investment Entities, as defined by these rules, are excluded from the UAE DMTT.

As a transitional measure to foster economic growth, the UAE DMTT will not be applied during the initial phase of an MNE Group’s international activity, provided no ownership interests in UAE entities are held by a parent entity subject to a Qualified Income Inclusion Rule in another jurisdiction.

The UAE DMTT should be interpreted according to the OECD’s Commentary and Administrative Guidance.

Cabinet Decision No. 142/2024 can be accessed on the UAE Legislation’s website: www.uaelegislation.gov.ae/en.

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Fujairah, UAE: 20% Salary Hike Announced for Government Employees

Khaleej Times, 6 February 2025: Fujairah has announced a 20% salary increase for government employees from 1 February 2025.

Furthermore, 72% of UAE nationals expect a salary increase in 2025.

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UAE: AI In Courts

Arab Times, 5 February 2025: AI could soon play a key role in the UAE’s judicial system, with trials already underway to test its effectiveness in case analysis.

A top government official has revealed that AI is being used to assist in cases where outcomes are clear-cut and require no human discretion.

Beyond case rulings, AI is also streamlining legal processes by translating, summarising, and analysing large volumes of documents.

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UAE: Advances with $790M VAT Refunds and Digital Expansion

Arabian Business, 26 January 2025: The UAE has made significant progress in its tax refund initiatives, granting $790 million in VAT refunds to nationals constructing new homes and unveiling VAT waivers for tourists.

The Federal Tax Authority (FTA) has highlighted the success of its digital VAT refund systems, which have been enhanced through ongoing digitalisation efforts.

Since the inception of the VAT-refund service for UAE nationals building new residences, 34,900 applications have been approved, amounting to AED2.9 billion ($790 million).

This marks a notable increase from the previous year’s figures, with a 27.52% rise in approved applications and a 32% increase in refund value.

In 2024 alone, 7,520 applications were approved, totaling AED704.38 million ($192 million).

The growth trajectory is evident when compared to previous years, with applications rising from 270 in 2018 to 8,250 in 2023.

The FTA has also expanded the digital VAT-refund scheme for tourists, with the number of registered retail outlets growing to 17,847 by the end of 2024.

This expansion includes the addition of 1,490 new retailers in 2024, contributing to a total of 3,008 outlets over two years.

The FTA is committed to enhancing the tourist experience by increasing the number of self-service kiosks for tax refunds, which now total 97 across major shopping malls, hotels, and airport terminals.

These kiosks process transactions in under two minutes, reflecting an 18.3% increase from the previous year.

The authority has emphasised its dedication to advancing digital systems in line with global best practices and the UAE’s digital transformation strategy.

The FTA plans to continue launching projects in 2025 to further streamline tax services, reduce bureaucracy, and enhance customer satisfaction.

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UAE: To Impose Penalty for Unpaid Corporate Tax

Arabian Gulf Business Insight, 26 January 2025: The Federal Tax Authority (FTA) has announced that companies failing to pay corporate tax will face a significant penalty, amounting to 14% per annum.

This penalty will be applied to the outstanding tax amount and will be calculated from the day after the payment deadline, accruing monthly on the same date.

To avoid these penalties, tax payments must be completed no later than nine months following the end of the relevant tax period.

Starting 1 January 2025, the UAE will increase the corporate tax rate for multinationals to 15% of profit.

This higher rate will affect companies operating in multiple jurisdictions with consolidated annual revenues of €750 million ($793 million) or more in at least two of the four preceding financial years.

This domestic minimum top-up tax amendment follows the introduction of a 9% corporate tax by the Gulf state a year earlier.

In December 2024, the Finance Ministry has stated that this strategic step reflects the UAE’s commitment to implementing the Organisation for Economic Co-operation and Development’s two-pillar solution, aimed at establishing a fair and transparent tax system aligned with global standards.

In a regional context, Bahrain has announced in September 2024 that it would also implement a Domestic Minimum Top-up Tax (DMTT) starting 1 January 2025 next year for large multinational enterprises (MNEs).

Similarly, Kuwait has declared an upcoming corporate tax rate of 15% for large MNEs, effective from the beginning of 2025.

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