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These include plastic bans to be implemented in more emirates; from next year outlets will have to charge shoppers an extra 25 fils for each plastic bag they use
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2022 is the year of labor reforms and a new visa regime. As we prepare for the new year, many new laws will also come into effect next year. These include the company’s emiratization goals, the introduction of corporate tax, mandatory insurance against unemployment, plastic bans in more emirates and personal status laws for non-Muslims.
Here are the details of the laws that will come into force in 2023:
1. Compulsory work insurance
Starting January 1, 2023
Employees working in the private sector and the federal government must purchase unemployment insurance
Exemption for investors and business owners who own and manage their own businesses, domestic workers, casual employees, youth under 18 and retirees who receive a pension and join a new employer
Workers with a basic salary of Dh16,000 or less will need to pay a monthly insurance premium of Dh5, or Dh60 per year
Compensation for this category shall not exceed Dh10,000 per month
And those whose basic salary exceeds Dh16,000 will need to pay Dh10 per month, which is Dh120 per year
Compensation for this category shall not exceed Dh20,000 per month.
Employees can choose to pay premiums on a monthly, quarterly, semi-annual or annual basis
Workers can coordinate with insurance companies to subscribe to additional benefits
Workers can subscribe through the insurance pool’s website (www.iloe.ae) and smart app, bank ATMs and self-service kiosk machines, business service centres, money changers, du, Etisalat and SMS.
The plan will be offered by Dubai Insurance, which is representative of an insurance pool of nine companies.
2. Corporate tax
Effective from June 1, 2023
9% tax for companies posting Dh375,000 profit per annum
The tax will be taxed on the company’s profits rather than its total turnover
Not applicable to resident wages
Individuals with a freelance license will be subject to corporate tax based on self-sponsorship and income above thresholds.
It also does not apply to personal income from bank deposits, savings plans and investments, dividends or foreign exchange earnings.
If the real estate income is derived from an economic activity (rental, sale, transfer, etc.), it may be subject to corporate tax under the conditions stipulated in the administrative decision. However, if the income is earned from real estate investments in which the investment manager conducts business activities, it may qualify for exempt income.
Non-residents are also subject to corporate tax if they have a permanent establishment in the UAE and receive state source income in the country (i.e. from the sale of goods, rendering of services, etc.). Non-residents are not subject to corporate tax on income from operating aircraft and ships in international space. Non-residents are not subject to corporate tax on income earned by investment managers of real estate or any other investment.
Qualified free zone persons who meet all the conditions set out in the UAE Corporate Tax Law Enforcement Regulations will be exempt from taxation. Natural resource extraction activities are also tax-free, however, they are subject to existing emirate taxes. Activities of government entities (excluding commercial activities), pension funds, investment funds and public benefit organizations are exempt from corporate tax.
3. Emiratization goals
Companies with more than 50 employees must achieve 2% emiratization rate for skilled work to avoid penalties
Companies that do not comply will face financial penalties, which will be imposed from January 2023.
Each UAE national who is not appointed will be fined Dh6,000 per month. Fines will be paid in one lump sum.
If an Emirati citizen employed by a private company resigns, the company will have to replace it with an Emirati in order to achieve the goal of Emiratis.
Companies that successfully achieve the goal of Emiratisation will receive significant incentives, including discounts of up to 80% on MoHRE fees.
4. Personal Status Law
New personal status law for all non-Muslim foreigners to come into effect on 1 February 2023
These rules will apply to non-Muslim foreigners residing in the country, unless one insists on applying the laws of their country.
Non-Muslim foreigners may agree to enforce other legislation on family or personal status in force in the UAE other than the provisions of this Decree.
The new law covers the conditions of marriage and the procedure for concluding and recording marriages in competent courts.
It also provides for divorce procedures that can be initiated jointly or ex parte.
It organizes the resolution of financial claims proceedings after divorce and joint custody arrangements for children.
The law regulates the procedures for succession and wills (testaments) and proof of parentage.
5. Plastic ban
Ajman and Umm Al Quwain to ban single-use plastics from January 2023
Starting next year, points of sale will have to charge shoppers an extra 25 fils for each plastic bag they use.
Retailers in Abu Dhabi, Dubai and Sharjah have already charged consumers 25 fils per bag to reduce the use of single-use bags and plastic in the country.
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