Sheikh Khalifa issues Tax Procedures Law for UAE

President His Highness Shaikh Khalifa Bin Zayed Al Nahyan has issued the landmark Federal Law No. 7 of 2017 for Tax Procedures, which sets the foundations for the planned UAE tax system, regulating the administration and collection of taxes and clearly defining the role of the Federal Tax Authority (FTA).

The Federal National Council (FNC) approved the draft law in March this year and with the presidential approval to the tax law, the country now has a legal framework for taxation, implementation and administration.

“The Tax Procedures Law is a significant milestone towards establishing the UAE’s tax system and diversifying the economy,” said Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and FTA Chairman.

“The Law, issued by Shaikh Khalifa is an all-encompassing legislative framework that lays the groundwork for the UAE’s plan to implement taxes as a means to ensure sustainability and diversify the government’s revenue streams. The increased resources will enable the Government to maintain the momentum of its development and infrastructure for a better future.”

The Law defines a clear set of common procedures and rules to be applied to all tax laws in the UAE, namely, value added tax (VAT) and excise tax laws, and clearly states the respective rights and obligations of the FTA and the taxpayer.

The law covers tax procedures, audits, objections, refunds, collection, and obligations, which include tax registration, tax-return preparation, submissions, payment and voluntary disclosure rules – in addition to tax evasion and general provisions.

When the Tax Procedures Law goes into effect, all UAE-based businesses will be required to keep accurate records for five years.

The law also sets penalties for non-compliance, as well as clear processes for appeals which align with international best practices and establishes a fair and transparent environment for the FTA to carry out its mandate.

“The UAE is committed to meeting the most stringent international standards,” Shaikh Hamdan said.

“We are working to establish an optimal legislative and executive environment to ease the nation into the VAT and excise tax systems. Implementing these taxes gives the UAE further leverage when it comes to international competitiveness and brings us one step closer towards building the future envisioned by our wise leaders, who have called on all those in charge to innovate and strive to spread happiness among citizens and residents.”

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Insurance coverage for Indian workers in U.A.E revamped from August 1

The government of India has revamped the mandatory insurance scheme, Pravasi Bharatiya Bima Yojana (PBBY), aimed at the welfare of Indian emigrant workers who need Emigration Clearance for overseas employment. The strengthened scheme (PBBY,2017) will be effective w.e.f. August 1, 2017.

Salient provisions of the strengthened scheme are as follows:

• Maximum sum for which insured under the Scheme is Rs.10.00 lakhs in the event of accidental death or permanent disability leading to loss of employment while in employment abroad, irrespective of change of employer/location of insured person
• Few other benefits at a nominal insurance premium of Rs. 275 and Rs. 375 for a period of two and three years respectively
• Certification of accidental death or permanent disability by Indian Missions and Posts abroad shall be accepted by the insurance companies.
• Medical insurance cover including injuries / sickness / ailment / diseases enhanced to Rs.1,00,000/- (up to Rs. 50,000 per hospitalization)
• Repatriation cover for medically unfit/premature termination of employment: Actual one-way economy class air fare to the nearest international airport in India.
• Family Hospitalization in India enhanced to Rs. 50,000/-
• Maternity benefit to women emigrants enhanced to Rs. 35,000/-
• Return economy class air fare to the nearest international airport attendant in case of emigrant’s accidental death or permanent disability.
• Legal expenses on litigation related to emigrant’s overseas employment enhanced to Rs. 45,000/-
• Provision for On-line renewal of PBBY policy.

Dubai Labour Court offer Free legal advice for workers

Chief Justice of Dubai Labour Court Jamal Salem Al Jaberi

Pro bono legal advice for low-paid residents is being offered by Dubai Labour Court in a bid to ensure workers’ rights are upheld.The court has launched the Oun initiative, which offers free legal consultations for workers, and it has also set up a one-day court to speed up legal proceedings.

Chief Justice of the Labour Court, judge Jamal Salem Al Jaberi, said that work is under way to provide not only consultations but full, free-of-charge legal services for workers, through another initiative known as Sanad.

Fourteen lawyers volunteered to provide the service and the Chief Justice expects that more will take part in time. “The lawyer who takes a case will have to represent the worker in court, attend hearings, submit defence arguments and give workers consultation,” said Mr Al Jaberi.

The one-day labour court will soon be launched in coordination with the Ministry of Human Recourses and Emiratisation.

Mr Al Jaberi said that the fast-track court will reduce the time it takes for cases to reach a verdict. Last year, the labour court handled 9,000 cases - 4,711 of which were in the first six months of the year. In the first six months of this year it handled 6,895 cases.

“The increase in number is a result of the several initiatives that helped speed up the legal process and make room for more cases to be heard and settled and not because of an increase in disputes between workers and employers,” said Mr Al Jaberi.

“The labour court of first instance at the ministry has been equipped to hear and issue rulings in labour cases [within a day], and it’s one of the initiatives launched to ease procedures and speed things up.”

The one-day court will first attempt to amicably settle disputes in the presence of both parties involved and, if a settlement is not reached, it will hear the case and reach a verdict on the same day.

“We are keen on employing amicable settlements between labourers and employers because it’s the fastest way to grant workers their rights,” said Mr Al Jabri, who added that most cases heard by the labour court are over unpaid wages.

One point of law that should be revised to speed up the legal process, according to judge Al Jaberi, is the mandatory legal notice, which can be costly for workers.

“Some cases require that a legal notice is published in a newspaper, which sometimes is an obstacle for workers who cannot afford the Dh100 or Dh200 for publishing costs,” he said.  The labour court is currently negotiating with a number of local newspapers to provide the legal notices for free to workers.

Another initiative by the court is a “night shift,” in which two courtrooms handle four hearings of labour cases through the night two days a week. It has successfully handled more than 300 cases since its launch.

“Starting this week, the night shift courts will hold six hearings a week but these courts handle cases with financial claims that are less than Dh20,000,” said Mr Al Jaberi.

The night shift will be evaluated soon to determine whether it is successful enough to merit it being adopted permanently, as it is costly due to the overtime hours paid to court officials. Another move being discussed that would ease the burden for workers is free translation services. The aim would be to save workers more expenses as most are required to present their documents to the court in Arabic.

“Once this is approved we will even provide them with transportation to and from the translation offices back to the court,” said Mr Al Jaberi.

Workers who look to take advantage of any of the court’s initiatives must apply and a committee evaluates them and decides whether the individual is entitled to the services.