UAE VAT Overhaul: Key Updates for Financial, Real Estate, and Healthcare Sectors Effective November 2024
The United Arab Emirates (UAE) has introduced significant updates to its Value-Added Tax (VAT) Executive Regulations, effective November 2024. These changes impact the financial services, real estate, and healthcare sectors, aiming to modernize the VAT framework and strengthen compliance.
Key Takeaways:
- Virtual assets, including cryptocurrencies, are now VAT-exempt retroactively to 2018, simplifying tax compliance for crypto-related transactions.
- Fund management services for UAE-licensed investment funds are now exempt from VAT, encouraging the growth of the fund sector by reducing costs.
- Hotel apartments and similar properties are now excluded from the definition of “residential buildings,” making them subject to VAT, which impacts real estate development and management practices.
- Imports of pharmaceuticals and medical equipment now enjoy zero-rating, lowering costs for healthcare providers.
- Passenger and goods transport within the UAE, when part of international transit, qualifies for zero-rating, supporting logistics providers.
- New definitions for export documents ensure clearer compliance on zero-rating exports, and the Federal Tax Authority (FTA) now has the power to deregister entities that might threaten the tax system’s integrity.
UAE’s New 2024 Labor Law: Boosting Worker Protections and Employer Accountability
The United Arab Emirates (UAE) has introduced pivotal amendments to its labor law, significantly enhancing employee protections and imposing stricter penalties on employers for violations. These changes aim to create a more equitable and transparent labor environment while streamlining the dispute resolution process.
Key Takeaways:
- The time limit for filing labor claims has been increased from 1 year to 2 years from the date of employment termination.
- Fines for employer violations have been substantially raised, ranging from AED 100,000 to AED 1,000,000, up from the previous range of AED 50,000 to AED 200,000.
- The Ministry of Human Resources and Emiratisation (MOHRE) can now instruct employers to continue wage payments for up to 2 months during dispute resolution.
- MOHRE’s rulings now have the power of a writ of execution, making them legally enforceable, but only for disputes under AED 50,000.
- Labor disputes must now be brought before the Court of First Instance instead of the Court of Appeal, with pending cases being transferred accordingly.
Dubai’s Game-Changing Company Law Update: Fast-Track Your Business Setup
The Dubai Department of Economic Development (DED) has introduced amendments to the company law that significantly simplify the registration and formation of companies in Dubai. These updates are aimed at reducing bureaucratic hurdles and enhancing the ease of doing business in the emirate.
Key Takeaways:
- The law introduces provisions that make it easier for businesses to set up, with fewer restrictions on foreign ownership for certain types of businesses.
- Companies can now operate more seamlessly across various jurisdictions within the UAE, further integrating Dubai into the global business ecosystem.
- In line with the UAE’s broader digital transformation, the company law updates encourage companies to leverage digital tools to manage their licenses and registrations more efficiently.
- New provisions offer greater flexibility for businesses wishing to operate in the free zones, including easier access to various legal structures, such as offshore entities.
- The law aims to attract foreign investment by easing market entry processes for international companies looking to establish operations in Dubai.
Road Safety Revolution: Dubai’s Tougher Traffic Rules
Dubai Police have introduced a series of tougher traffic rules aimed at reducing accidents caused by reckless behaviour and creating a safer driving environment in the emirate.
Key Takeaways:
- Drivers caught using mobile phones while driving face fines of AED 800 and four black points, as this measure aims to reduce distractions, a key contributor to road accidents.
- New rules impose penalties for excessive speeding and tailgating, with fines up to AED 1,000 and black points, as tailgating poses significant safety risks.
- Serious infractions such as dangerous overtaking, driving without a license plate, and unsafe lane changes can now lead to a 30-day vehicle impoundment.
- Drivers who make abrupt lane changes or enter roads without checking their surroundings risk hefty fines and severe penalties.
- In addition to fines and black points, offenders may face more severe penalties, including potential vehicle impoundment for up to 30 days.
