Latest news with #FederalDecreeLaw
Arabian Business
3 days ago
- Business
- Arabian Business
UAE announces new tax benefits for fair value investment properties
The UAE Ministry of Finance has issued a Ministerial Decision allowing taxpayers to claim tax depreciation on investment properties held at fair value under Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses. Under the decision, taxpayers who elect for the realisation basis can now deduct depreciation from their taxable income for investment properties maintained on a fair value basis. The tax depreciation deduction will be calculated as the lower of the tax written down value of the investment property or 4 per cent of the original cost of the investment property for each 12-month tax period, with pro-rata adjustments for partial tax periods. The deduction applies to taxpayers who hold investment properties both before and after the introduction of corporate tax. The decision clarifies the value basis for tax depreciation claims depending on whether the investment property is transferred between related parties, third parties, or has been constructed by the taxpayer. The ministry stated the decision creates parity between taxpayers holding investment properties on a historical cost basis, who can already benefit from accounting depreciation deductions, and those holding investment properties on a fair value basis. To access this benefit, taxpayers must make an irrevocable election in their first Tax Period beginning on or after January 1, 2025 in which they hold an investment property. This election will apply to all investment properties going forward. The decision includes an exceptional window for taxpayers to elect for the realisation basis to access the tax depreciation deduction, given that the realisation basis election is typically made in the first Tax Period. The ministry has provided guidance on when claw-back of tax depreciation may occur in instances outside of disposal of an investment property. This ensures taxpayers understand their tax compliance obligations and can assess their returns on investment property. The ministry said the release of this decision reflects its commitment to ensuring a level playing field for all taxpayers, enhancing the principles of tax neutrality and equity in the UAE corporate tax regime, and ensuring such deductions align with international best practice.
Zawya
3 days ago
- Business
- Zawya
MoF issues Ministerial Decision on Depreciation Adjustments for Investment Properties held at Fair Value for the purposes of Corporate Tax Law
Abu Dhabi, United Arab Emirates: The UAE Ministry of Finance has issued a new Ministerial Decision regarding Depreciation Adjustments for Investment Properties held at Fair Value for the Purposes of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses. Under this decision, taxpayers (who elect for the realization basis) can elect to deduct depreciation from their taxable income (hereafter known as 'tax depreciation') for investment properties that are held on a fair value basis. The tax depreciation deduction available will be the lower of the tax written down value of the investment property or 4% of the original cost of the investment property , for each 12-month tax period or otherwise prorated for part of the tax period, during which the relevant investment property is held, and will be available to taxpayers who hold investment properties prior to and/or after the introduction of corporate tax. The decision provides clarity as to the value upon which tax depreciation can be claimed depending on whether the investment property is transferred between related parties or third parties or has been constructed/developed by the taxpayer. The decision provides parity between taxpayers who hold investment properties on a historical cost basis, who can already benefit from a deduction for accounting depreciation, with those who hold investment properties on a fair value basis. To avail this benefit, this decision therefore requires taxpayers to make this irrevocable election in their first Tax Period beginning on or after 1 January 2025 in which they hold an investment property and such election will apply to all investment properties going forward. Given the realization basis must have been elected for by taxpayers wanting to benefit from the tax depreciation election, and that the realization basis election is generally made in the first Tax Period, the decision also allows for an exceptional window for taxpayers to opt in to elect for the realization basis to avail the tax depreciation deduction. Finally, the decision provides guidance on when the claw-back of tax depreciation may occur in instances outside of a disposal of an investment property such that taxpayers are aware of their tax compliance obligations and are able to accurately assess their returns on investment property. The release of this decision reflects the Ministry's commitment in ensuring a level playing field for all taxpayers, thus enhancing the principles of tax neutrality and equity in the UAE Corporate Tax regime and ensuring such deductions are aligned with international best practice.
Khaleej Times
06-07-2025
- Business
- Khaleej Times
UAE law: Can full-time employees legally start their own business?
Question: I work in a private firm in the UAE. What does the law say about starting a business while being employed full-time? Will it be a legal problem if the business I started and my current job are similar? I work in the HR department in my firm, and the company I plan to start is an HR consultancy. Answer: An employee may establish a new entity or become a partner or shareholder in an existing entity in the UAE, provided that the employer issues a No Objection Certificate (NOC) permitting the employee to do so. Accordingly, if you intend to establish a new human resource consultancy firm while still being employed with your current employer, it is advisable first to obtain an NOC from your current employer. Furthermore, if you establish a human resource consultancy and the nature of the work is similar to your role in your current employment, then this may be considered as joining a competitor of your employer only if your signed employment contract includes a non-competition clause. This is by Article 10(1) of the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations, which states, 'Where the employee performs a work which gives him access to employer's customers or business secrets, the employer may make a provision in the employment contract that the employee shall not compete with or be engaged in any business which competes with him in the same sector after the expiry of the contract. Such a clause shall specify the place, time, and type of work to the extent necessary to protect the legitimate business interests, and the non-competition period shall not exceed two (2) years after the expiration of the contract." However, the non-competition clause in your employment may not be applicable once you leave the employment, provided you and your employer have agreed in writing that non-competition between you and your employer does not apply upon the end of your current employment contract. This is under Article 12 (4) of the Cabinet Resolution No. 1 of 2022 Concerning the Executive Regulations of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations, which states, 'It shall be permissible to agree in writing on the non-performance of the non-competition clause after the end of the employment contract." In addition, the provisions of non-competition may be exempted as mentioned in Article 12 (5) of the Cabinet Resolution No. 1 of 2022 on Employment Relations, which states, "An employee shall be exempted from the non-compete clause provided for in Article (10) of the Employment Law under the following conditions: a. If the employee or the new employer pays compensation not exceeding three (3) months of the employee's wage agreed upon in the last contract to the former employer, and the former employer's written consent thereto is required. b. If the contract is terminated during the probationary period. c. Any professional categories according to the needs of the employment market in the UAE, as determined by the decision of the Ministry under the employment classification approved by the Cabinet." You may contact the Ministry of Human Resources and Emiratisation for further clarification.
Gulf Business
30-06-2025
- Business
- Gulf Business
Have an inactive business in UAE? Here's what you should know
Image credit: Getty Images The Ministry of Human Resources and Emiratisation (MoHRE) in UAE has reaffirmed its commitment to enforcing labour regulations by taking strict action against businesses found to be non-compliant with their licensed activities while maintaining registered workers without genuine employment relationships. Read- Since the start of 2025, In response, MoHRE imposed penalties exceeding Dhs34 million, suspended the issuance of new work permits for these entities, and downgraded them to the third category within the Ministry's classification system for private sector establishments. Legal action targets both employers and workers The Ministry has also barred the owners of these non-compliant establishments from registering any new businesses in its system, in line with its continued efforts to ensure adherence to UAE labour laws and regulations. These actions are backed by Federal Decree-Law No. 33 of 2021 on Regulating Labour Relations, Cabinet Resolution No. 21 of 2020 regarding service fees and administrative fines, and Ministerial Resolution No. 318 of 2024, which governs how authorities handle cases involving establishments that register workers but do not carry out licensed operations. MoHRE has urged employers to cancel licences and update the legal status of their workers if an establishment ceases operations for any reason. Failure to do so could result in legal liability for both business owners and registered employees. An inactive licensed business that retains workers without actual employment is considered a serious legal violation. The consequences apply to all parties involved, especially when no legitimate employment link exists. The ministry also underscored the effectiveness of its field-based and smart monitoring systems, which use comprehensive data and indicators—including worker sponsorships, licensing activity, transaction records, and field inspections—to evaluate whether a business is operational.
Khaleej Times
23-06-2025
- Business
- Khaleej Times
Up to Dh30,000 fine: UAE announces penalties for offences by public benefit institutions
In a recent Cabinet resolution, the UAE government has introduced a new framework for administrative penalties imposed on public benefit institutions. These measures aim to ensure compliance with Federal Decree-Law No. (50) of 2023, which regulates the operations of such entities. Under the new regulations, institutions can face fines ranging from Dh1,000 to a staggering Dh30,000 for various violations. These offences include failure to notify authorities of operational changes, unauthorised participation in events, and mismanagement of funds. Here is a list of offences and their corresponding penalties: Failure to notify changes within the institution First and second violations: Warning Third violation: Dh1,000 fine Fourth violation: Temporary closure for one month Unauthorized participation in events First violation: Warning Second violation: Dh1,000 fine Third violation: Dh2,000 fine Fourth violation: Temporary closure for one month Hosting individuals from within the country for events without approval First violation: Warning Second violation: Dh1,000 fine Third violation: Dh2,000 fine Hosting individuals from outside the country for events without approval First violation: Dh2,000 fine Second violation: Dh4,000 fine Third violation: Dh6,000 fine Fourth violation: Temporary closure for one month Participation in activities organized by associations or entities outside the country without approval First violation: Dh5,000 fine Second violation: Dh10,000 fine Third violation: Dh15,000 fine Affiliation or membership in any organization based outside the country without local approval and ministry authorization First violation: Dh10,000 fine Second violation: Dh20,000 fine Third violation: Dh30,000 fine Improper fund management First violation: Warning Second violation: Dh5,000 fine Third violation: Dh10,000 fine The resolution emphasises the importance of adhering to regulations and highlights the government's commitment to transparency and accountability within the sector. Institutions are urged to familiarize themselves with these new rules to avoid penalties and ensure their operations align with national standards.
