August 2024 / United Arab Emirates

The UAE Government has issued a Federal Decree-Law amending specific provisions of the Federal Decree-Law Regarding the Regulation of the Employment Relationship, known as the “UAE Labour Law”.

This decree is part of the UAE's ongoing efforts to, further, develop its legislative and legal framework. It aims to ensure the efficiency and competitiveness of the labour market, regulate employment relationships, clearly define the rights and obligations of all parties involved, and ensure their protection by law.

The decree imposes fines of no less than AED100,000 and no more than AED1 million on any employer who employs workers without a proper permit, hires workers or brings them to the country and fails to provide them with a job, misuses work permits, or shuts down a business or suspends its activities without settling workers' rights, in violation of the new decree and its Executive Regulations. The same penalties apply to the illegal employment of minors or allowing minors to work in violation of the law by their guardians.

Additionally, the new decree introduces criminal penalties for fictitious recruitment, including fictitious Emiratisation. Therefore, employers found guilty of bypassing the provisions of the laws or executive regulations or decisions regulating the labour market, by faking their recruitment of one or more employees, will face fines ranging from AED100,000 to AED1 million. The penalty is multiplied by the number of workers involved in the fictitious employment.

The amendments state that in the case of labour disputes, and if there is a disagreement with a decision the Ministry of Human Resources and Emiratisation issued to solve the dispute, the case shall then be brought before the Court of First Instance rather than the Court of Appeal. The court shall revoke proceeding with any claims filed after two years from the termination of the employment relationship, by the provisions of the present law.

Furthermore, the new decree stipulates criminal proceedings for fictitious employment, including fraudulent Emiratisation, can only be initiated at the request of the Minister of Human Resources and Emiratisation or his/her authorised representative.

The decree also provides the Ministry with the power to settle such cases upon the employer's request before a court sentence is issued, provided that the employer pays at least 50 percent of the minimum specified fine and pays back to the government all the financial incentives received by his/her fictitious employees.

Additionally, according to the new decree-law, Courts of Appeal shall refer all requests, disputes and grievances regarding the regulation of employment relations, in their current state, to the competent Court of First Instance, starting from the date of the implementation of the provisions of this decree-law, except from the disputes that have been adjudicated or reserved for the issuance of a judgment.

Source: Mohre.gov.ae

The Federal Tax Authority (FTA) has urged Resident Juridical Persons with licences issued in July, irrespective of the year of issuance, to promptly submit their Corporate Tax registration application no later than 30th September 2024 to avoid administrative penalties.

In a press statement, the FTA advised taxable persons to adhere to the timelines specified in FTA Decision No. 3 of 2024 on the timeline for the registration of taxable persons for Corporate Tax under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments, which came into effect on 1st March 2024. The FTA Decision outlines deadlines for each category of taxable persons subject to Corporate Tax to submit their registration applications.

The FTA noted that, as per Cabinet Decision No. 75 of 2023 on the administrative penalties for violations related to the application of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and its amendments, an administrative penalty will be levied on taxable persons who fail to comply with submitting their Corporate Tax registration application within the specified time periods.

Furthermore, the FTA explained that the FTA Decision applies to juridical persons and natural persons, whether resident or non-resident, noting that juridical persons that are resident persons incorporated or otherwise established or recognised before 1st March, 2024 must submit their Corporate Tax registration application based on the month their licence was issued, irrespective of the year of issuance.

For taxable persons holding multiple licences as of 1st March 2024, the deadline is determined by the licence with the earliest issuance date. In the event that a taxable person holds an expired licence on 1st March 2024, the registration deadline is still based on the month the licence was issued.

The FTA stated that registration for Corporate Tax purposes is available through the EmaraTax digital tax services platform, which is accessible 24/7. The registration process has been streamlined into four main steps that will take approximately 30 minutes to complete. The platform also allows Value Added Tax or Excise Tax registrants to directly access their accounts via EmaraTax, complete registration for Corporate Tax, and submit the required documents. Once the registration request is approved, taxable persons will obtain a Tax Registration Number for Corporate Tax purposes.

Meanwhile, the FTA urged taxable persons subject to Corporate Tax who have yet to register to create a new username through the EmaraTax platform using their email address and mobile number. Once the account is successfully created, registration can be completed by identifying the taxable person, selecting the ‘Register for Corporate Tax’ option, and following the remaining simple steps.

Additionally, taxable persons subject to Corporate Tax can register directly through the EmaraTax digital tax services platform or through authorised tax agents listed on the FTA’s website. They can also submit a Corporate Tax registration application at several government service centres across the country, which provide their services electronically in accordance with government service standards and under the supervision of qualified and trained individuals. Once application procedures and electronically entered data verification are complete, a team of specialists reviews the application internally and provides the applicant with their Tax Registration Number for Corporate Tax directly to the email address listed in the Corporate Tax registration application.

Source: wam.ae

Diacron provides support in assessing the impact of Corporate Tax, offering dedicated consultancy to ensure full compliance and meet related regulatory requirements. For any inquiry or to discuss your specific needs, please do not hesitate to contact us at tax.uae@diacrongroup.com