United Arab Emirates Archives - Page 18 of 65

ADGM: Announces Plans for Establishment of Insurance Association

19/12/202419/12/2024
by Hannah Gutang

ADGM has announced the upcoming establishment of the Insurance Association within its jurisdiction, marking a significant step forward for the insurance and reinsurance sectors in ADGM and the UAE.

This initiative aims to create a unified platform to support industry growth and innovation.

The Association will foster collaboration among key stakeholders, enhance professional standards, and promote best practices within the insurance industry.

It will act as a collective voice, engaging with regulators, policymakers, and industry leaders to address emerging challenges and opportunities, aligning with ADGM’s mandate and the UAE’s economic and financial development goals.

This initiative highlights ADGM’s commitment to building a robust, sustainable, and globally competitive insurance ecosystem, reinforcing its status as a leading financial centre.

Further details on the Association’s structure, membership opportunities, and upcoming activities will be announced soon.

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News developments

UAE: Launches World’s First VAT Refund System for E-Commerce Tourists

18/12/202418/12/2024
by Hannah Gutang

Khaleej Times, 16 December 2024: The Federal Tax Authority (FTA) has unveiled a groundbreaking VAT refund system for e-commerce retail purchases made by tourists during their stay in the UAE, marking a world-first initiative.

This innovative system, developed in partnership with Planet, the authorised operator, is part of the FTA’s strategy to embrace proactive solutions through innovation and digital transformation.

The new system integrates platforms and e-commerce retailers registered with the Authority into the ‘VAT Refund for Tourists on E-Commerce Purchases’ program.

This initiative builds on the success of a fully digital VAT refund system launched over two years ago, which has been continuously updated to remain entirely paperless.

Tourists can now enjoy a seamless shopping experience, easily scanning their passports and completing purchase transactions that are automatically converted into digital invoices.

The system allows for quick verification of invoices via a shoppers’ portal, ensuring fast and efficient VAT refund procedures for eligible purchases.

The FTA’s Director-General expressed pride in launching this pioneering electronic system, which enhances the UAE’s reputation as a leading international tourism destination.

The system has been praised for its simplicity, efficiency, and speed, offering tourists a unique experience by enabling VAT recovery on purchases from both traditional stores and registered e-commerce platforms.

The VAT refund process is designed to be smooth and efficient, from purchase to refund completion upon the tourist’s departure.

Tourists can apply for VAT refunds directly through registered e-commerce platforms by providing travel document details and personal information to verify eligibility at the time of purchase.

The registration is finalised once the tourist’s identity is confirmed during delivery or online order fulfillment.

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News developments

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

Sharjah: Announces Rules on Conditional Release of Prisoners

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

Khaleej Times, 10 December 2024: Prisoners in Sharjah may be granted conditional release under a new decision issued by the emirate’s Executive Council.

The decision states that an inmate may be released on parole after serving three-quarters of his/her sentence.

The release, which would still include restrictions, could be set for a period of one month or more.

Those sentenced to life in prison can be granted conditional release if they have served at least 20 years in jail.

In all cases, however, the Commander-in-Chief of Sharjah Police shall issue a decision on an inmate’s conditional release.

The emirate’s public prosecution will then be notified.

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News developments

Sharjah: Council Committee Reviews Proposed Law on Military Pensions and Benefits

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

The Legislative and Legal Affairs, Appeals, Suggestions, and Complaints Committee of the Sharjah Consultative Council (SCC) convened to deliberate on a proposed law addressing pensions and end-of-service benefits for military personnel within the emirate’s regulatory bodies.

The draft law was initially presented during a previous council session. A meeting was held this morning at the council’s headquarters in Sharjah, led by the committee’s head.

Committee members and key officials, including the legal advisor and the committee secretary, participated in the session.

The focus was on scrutinising the draft law’s provisions, with particular emphasis on its core articles.

This involved evaluating the eligibility criteria for pensions and benefits, the procedures for their distribution, and the transitional provisions related to membership requirements.

The committee underscored the legal and financial aspects embedded in the draft law, aiming to establish robust regulations for subscriptions, benefits, and pension calculations.

During the meeting, the committee shared insights on various articles, emphasising the importance of regulatory measures tailored to the unique characteristics of Sharjah’s military organisations.

The committee plans to continue its thorough review of the draft law in upcoming meetings, ultimately preparing a final report for submission to the Consultative Council for further discussion and approval.

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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

ADGM: FSRA Proposes Amendments To Its Digital Asset Regulatory Framework

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

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has released Consultation Paper No. 11/2024, outlining proposed changes to its regulatory framework for Authorised Persons engaging in Regulated Activities involving Virtual Assets within ADGM.

The paper aims to gather feedback on these potential modifications.

Key proposed amendments include updates to the acceptance process for Virtual Assets in ADGM, as well as adjustments to capital requirements and associated fees.

The consultation also invites input on various topics, such as staking and other emerging business models related to Virtual Assets.

Additionally, the FSRA seeks opinions on the criteria for accepting non-ADGM issued Fiat-Referenced Tokens within ADGM.

The paper further suggests broadening the range of investments permissible for Venture Capital Funds.

Stakeholders are encouraged to review the consultation materials and submit their feedback by the deadline of 31 January 2025.

The materials are accessible via the provided link.

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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

Lexis Middle East Gulf Tax – Winter 2024 Edition

09/12/202409/12/2024
by Hannah Gutang

The latest edition of Lexis Middle East Gulf Tax magazine provides a comprehensive overview of the evolving tax landscape in the GCC region. The magazine delves into the OECD’s Pillar Two or Global Anti Base Erosion Rules, highlighting the challenges multinational enterprises face due to varying approaches by different jurisdictions, particularly in the GCC. Bahrain stands out as the first GCC country to enact a Domestic Minimum Top-Up Tax, with implementation set for January 2025.

The issue also explores the implications of recent changes in VAT treatment for Investment Fund Management Services and provides a round-up of key tax treaty developments and regulatory changes in the region.

Additionally, it discusses potential tax reforms in Oman and Kuwait, and features insights from tax professionals on the rapid pace of legislative changes in the GCC. The magazine concludes with an examination of new details on disputing tax assessments and penalties in the UAE.

FEATURE: PILLAR TWO: WHAT NOW?

Bahrain is the pioneering GCC country to introduce a Domestic Minimum Top-Up Tax. Shashank Chandak of KPMG analyses the current positions of Bahrain and other GCC nations on Pillar Two.

FEATURE: INVESTMENT APPROACHES

With recent changes to the VAT treatment of Investment Fund Management Services, Markus Susilo of Crowe analyses the general differences in tax treatment for Investment Management Services and investment funds.

TAX NEWS ROUND-UP

This round-up highlights the latest significant changes in tax agreements and regulatory updates throughout the region, offering readers a thorough understanding of the current developments.

PRACTICAL FOCUS: TAX REFORM IN OMAN AND KUWAIT

Rami Alhadhrami, a Tax Partner at BDO Kuwait, and Asrujit Mandal, a Tax Advisor in Oman, discuss the potential tax system reforms in Oman and Kuwait, focusing on changes to income and profit taxation.

TAX PROFESSIONAL PROFILE

According to Asrujit Mandal, Tax Partner at BDO LLC for Oman and Bahrain, the rapid pace of change in tax legislation poses the greatest challenge for businesses in the GCC.

ANY QUESTIONS?

Tina Hsieh of Baker McKenzie delves into the recent updates from the FTA concerning the procedures for challenging tax assessments and administrative penalties in the UAE.

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Lexis Middle East Gulf Tax_Winter 2024

Have you read the Lexis® Middle East Gulf Tax – Past editions? Click the links below to access them.

Lexis Middle East Gulf Tax | Autumn 2024

Lexis Middle East Gulf Tax | Summer 2024

Lexis Middle East Gulf Tax | Winter 2023

Lexis Middle East Gulf Tax | Autumn 2023

Lexis Middle East Gulf Tax | Spring 2023

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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