UAE Labour permit fees Increased from December 4th

Starting from December 4^th, 2017, the Ministry of Human Resources and Emiratisation (MORHE) will enforce a revised fee structure for issuing work permits linked to the classification of companies.

The new classification system of companies will be in three categories according to the skill level and the cultural diversity of their workers, in the implementation of a recent Cabinet decision. Under the system, new work permit fees will be applied depending on the level of skill of the worker and whether he or she is outside or inside the country and the category of the company.

Companies recruiting Emiratis or citizens of Gulf countries as well as fishing boat facilities will be exempt from work permit fees, according to another Cabinet decision.

Classification System

The first category of the new system includes fishing boats owned by citizens and enterprises, members of the Emiratisation Partners Club, small and medium enterprises that are members of the youth project support institutions which meet the conditions as well as the new service centres “Tadbeer”.

Category 2 -A company is classified as “Category 2” and rated as A, B, C and D in this category — according to the ratio of skilled workers, and to the extent of its commitment to multicultural diversity.

Category 2A -A company will be classified if it has 40 percent or more skilled workers of its total workforce — and at least 50 percent of the multicultural ratio is available in the company.

Category 2B -A company, which has between 10 percent and less than 40 percent skilled workers and at least 50 percent of the multicultural ratio will be classified as 2B.

Category 2C- If the percentage of skilled workers ranges between 5 percent and less than 10 percent of the total workforce and it has at least 50 percent of the multicultural ratio, the company will be classified as category 2C.

Category 2D -The company is classified as category 2D if the percentage of skilled workers is less than five percent of the total workforce, or the establishment does not have at least 50 percent of the multicultural ratio.

Cabinet resolution

The Cabinet resolution stipulates that companies with a workforce of not more than three workers will be classified in category 2B, which also includes companies with four to 10 workers — if 50 percent of the multicultural ratio is met.

If the multicultural ratio is not met, a company will be classified as category 2D.

A company will be included in the third category of the system if it has committed one or more of the 10 violations as stated in the Labour Law.

The facilities are transferred from one category to another, or from one level up or down, whenever they meet the classification criteria and conditions of the category or level to which they are transferred.

Work permit fees for workers from outside the country

The fee for issuing a work permit for a worker from outside the country is Dh 200 for the three categories. The fee for issuing a work permit for two years is Dh 300 for the companies listed in the first category, regardless of the skill level of the worker.

The fee for the second class companies is Dh500 for the skilled worker and Dh1,200 for the semi-skilled worker, level B Dh1000 for a skilled worker, Dh2,200 for semi-skilled skill and level C Dh1,500 for a skilled worker, Dh2,700 for the semi-skilled worker, level D Dh 2000 for skilled worker and Dh3,200 for the semi-skilled worker.

The fee for a work permit for workers from outside the country for companies classified in category III is Dh5,000 regardless of the skill level of the worker.

The fee for work permits for a worker from outside the country was also unified, as was the issuance of a work permit of Dh100 for each of the two services mentioned for the companies listed in the different categories in the classification system.

Work permit fees for workers from inside the country

The work permit fee for those who are on sponsorship of their parents for companies listed in the different categories is unified at Dh200.

The fee for a work permit for those who are on the sponsorship of their parents and for a period of two years for the first category is Dh300, regardless of the skill level of the worker, while the companies in the second category A  is Dh500 for skilled workers and Dh1000 for a semi-skilled worker and the companies category IIB  Dh1000 for skilled workers and Dh2,000 for semi-skilled workers.

Companies of category IIC will be charged Dh1,500 for a work permit for a skilled worker and Dh2,500 for a semi-skilled worker, while companies of category IID will be charged Dh2,000 and Dh3,000  for skilled and semi-skilled workers respectively.

Work permit fees for companies listed in the third category will be Dh5,000 regardless of the level of skill of the workers.

A fee of Dh 100 for different categories of companies has been fixed for the application for a work permit and Dh 500 for issuing a work permit for one year for part-time jobs for teenagers.

A fee of Dh100 for the different categories of companies has been fixed for each service for requesting a temporary work permit, issuing a temporary work permit for each month, requesting a work permit for some time, issuing a work permit for some time for each month, requesting a training permit and issuing a training permit for a month and request a permit to test the worker and issue a permit to test the worker  for each month.

Employment transfer fees from one company to another

A fee of Dh100 was determined for companies listed in the three categories for each service requesting a transfer permit and the use of a worker from one company to another and requesting permission to transfer and employ a worker from one company to another owned by the same owner or partner, for a period of two years.

A transfer permit and the use of a worker from one company to another for two years will coast Dh 150 for the companies listed in the first category, regardless of the skill level of the worker.

The fee for the second-class companies at Level A will be Dh250 for the skilled worker and Dh500 for the limited skill and level  B, Dh500 for the skilled worker and Dh1,000 for the limited skill and level C, Dh750 for the skilled worker and Dh1,250 for the limited skill and level D, Dh1,000 for the skilled worker and Dh1,500 for limited skill, while the fee for the companies classified as category III is Dh2,500, regardless of the skill level of the worker.

Renewal and amendment of work permits

The fee for the renewal of work permit for two years will be Dh300 for the first category regardless of the level of skill of the worker and companies in the second category level A, Dh 500 for the skilled worker and Dh1,200 for a semi- skilled worker and level B, Dh1,000 dirhams for skilled workers and Dh2,200 for limited Skill and level C /, Dh1500 for skilled workers and Dh2,700 for semi-skilled worker and level D, Dh2,000 for skilled workers and Dh3,200 for limited skill,while the fee for the companies classified in the third category Dh5,000, regardless of the skill level of the workers.

A fee of Dh200 was allocated for the companies listed in the three categories for each service to change the work permit or the job contract.

A fee of Dh100 per month for the companies included in the three categories has been determined for the renewal of a work permit.

A unified fee for the three categories in the classification system was set at Dh2,000 for the opening of a company register and Dh250 for the electronic signature card and Dh200 for issuing a public relations officer (PRO) card for expats for two years.

The fee for the issuance of an electronic work permit for domestic workers for two years for citizens and one year for expats is Dh100 dirhams and Dh100 dirhams for renewal of the permit.

The fee for the issuance of a work contract for domestic workers for two years for citizens and one year for expats is Dh50 and Dh50 for renewing the contract.

UAE residents should check credit history before applying for a loan

As more banks rely on a customers’ credit history to make decisions on loan applications, it will become extremely important to pay special attention to credit history and reports. Credit scoring, common in mature markets, is a three-digit number assigned to each borrower – in the UAE’s case between 300 and 900 – that represents their creditworthiness and future risk of default. The higher the number, the lower the risk.  

Your credit history combines records of your existing debts, including credit cards, personal, car and home loans and any missed loan/credit card repayments or bounced cheques will appear as well. All your current credit cards whether used or not will also appear on your credit report. These records (of the past two years) are provided by the banks to the Al Etihad Credit Bureau – the UAE’s official credit bureau.

Al Etihad Credit Bureau is a Federal Government organization that collects credit data, information and financial commitments from banks and financial institutions in order to provide accurate Credit Reports to individuals, financial institutions and companies in the UAE as allowed by the laws and regulations of the UAE

There is a law which says one’s debt repayments cannot be more than 50 percent of their income and your credit report will show how much of that 50 percent you have already used up. When you apply for a loan, your bank will go to the credit bureau to get your credit history details before it makes a decision on your application. The bank will have access to the information that all the other banks have provided, for example, the number of credit cards you have and their limit, the number of loans you have and any missed repayments in the past. This will allow the bank to check whether you have reached your debt burden ratio and check your repayment behaviour. Depending on the bank’s credit criteria of who it will lend to, your credit report will help it make a decision on whether to approve your loan and help it fix a rate.

Therefore before applying, it is a good idea to find out what is in your own report. This is possible by purchasing a copy from the Al Etihad Credit Bureau. The report takes 10 to 15 minutes to issue.

How do I get  Credit Score from Al Etihad Credit Bureau

Visit one of our Customer Service Centers and provide an original valid Emirates ID Card, Passport(s) Copy and a valid Email Address. You can pay with credit, debit or e-dirham cards.

How Much does the Credit Score Cost

Credit Report - Individual or Establishment -----------------AED100

Credit Report - Individual or Establishment with Score --AED150

Credit Report - Commercial  ----------------------------------  AED 180

Credit Report - Commercial with Score --------------------- AED 220

Credit Score  --------------------------------------------------------AED 60

Federal Tax Authority clarifies registration procedure for VAT in the UAE

The Federal Tax Authority, FTA, has called on natural and legal persons exercising business in the UAE to expedite their registration process for the Value Added Tax, VAT, to avoid the risk of missing the deadline, on 1st January 2018.

This applies to businesses whose taxable supplies and imports of goods and services exceed AED375,000 over the previous 12 months. Taxable supplies are identified as all supplies of goods and services made by a person who is not exempt.

Registration is available on a 24/7 basis through the VAT website. Businesses are required to visit the website, select the e-Services portal, sign up and create an account. Once the email has been verified, they can log in and register.

The FTA has urged businesses to provide accurate information and make sure they enter it properly into the application form. To complete the registration process, scanned documents must be attached,

•  The business or trade license
•  Passport Copy
•  Emirates ID, for UAE residents, of the manager or owner of the business.
• The Authorized signatory, if the signatory is not the manager him/herself, as well as proof of authorization for the manager or signatory for example articles of association, power of attorney attested by notary.

 Issuing a Tax Registration Number, TRN, may require up to 20 working days or less. Therefore, and in order to ensure that the application is processed, and the TRN issued before 1st January, 2018, the FTA urged businesses to complete their registration to avoid the administrative penalty of AED20,000, as well as additional penalties related to late payment of tax, according to the Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE Two or more legal persons conducting business in partnership may apply for Tax Registration as a Tax Group if each of them has a place of establishment or fixed establishment in the UAE; if the persons are related parties, thus not separated in economic, financial or regulatory aspects; or if one or more of the Persons in the group control the others.

Persons intending to register as a Tax Group need to nominate a representative member who shall apply to register them. The representative member applies first by completing a VAT registration application stating that the intention is to be part of a Tax Group.

After the representative member is issued with a Tax Identification Number, TIN, the additional members of the group may be added through Tax Group Registration. Members can be added whether they have registered separately or not. After the process is complete and the application to add members has been submitted, a TRN will be issued for the whole Group.

More information can be found in theLegislation and Guides section, on the FTA website.

Residential Buildings Subject to the Zero Rate VAT in the UAE

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE and Ruler of Dubai, has approved the executive regulations of Federal Law No.8 of 2017 on Value Added Tax (VAT). The bylaws govern the implementation of the VAT, which will come into effect from January 2018.

The regulations define VAT as the 5 percent tax imposed on the import and supply of goods and services at each stage of production and distribution, including what is a deemed supply, with the exception of specific supplies subject to the zero rate and what is exempted as specified in the law

.Article (37) Residential buildings

1. The phrase “residential building” means a building intended and designed for human occupation, including:

a. Any building or part of a building that the person occupies, or that it can be foreseen that a person will occupy, as their principal place of residence.

b. Residential accommodation for students or school pupils.

c. Residential accommodation for armed forces and police.

d. Orphanages, nursing homes, and rest homes.

2. A “Residential building” does not include any of the following:

a. Any place that is not a building fixed to the ground and can be moved without being damaged.

b. Any building that is used as a hotel, motel, bed and breakfast establishment, or hospital or the like.

c. A serviced apartment for which services in addition to the supply of accommodation are provided.

d. Any building constructed or converted without lawful authority.

3. A building shall be considered as a residential building if a small proportion of it is used as an office or workspace by the occupants if it includes garages and gardens used in conjunction with it, or it includes any other features that may be said to comprise part of the residential building.

Article (38) Zero-rating of Buildings Specifically Designed to be Used by Charities

1. The first sale or a lease of a building, or any part of a building, shall be zero-rated if the building was specifically designed to be used by a Charity and solely for a relevant charitable activity.

2. In Clause (1) of this Article, “relevant charitable activity” means an activity for the purpose other than for the purpose of profit or benefit to any proprietor, member, or shareholder of the Charity, and one which is undertaken by the Charity in the course or furtherance of its charitable purpose or objectives to carry out a charitable activity in the State as approved by the Ministry of Community Development, or under the conditions of its establishment as a charity under Federal or Emirate Decree, or as otherwise licensed to operate as a Charity by an agency of the Federal or Emirate Governments authorised to grant such licences.

Such charitable purposes and objectives include, for instance, advancing health, education, public welfare, religion, culture, science and similar activities.

Article (39) Zero-rating Converted Residential Building

1. The first supply of a building or any part of a building, which is converted to a residential building shall be subject to the zero rate provided that the supply takes place within 3 years of the completion of the conversion and the original building, or any part of it, was not used as a residential building and did not comprise part of a residential building within (5) five years prior to the conversion work commencing.

2. The presence of shared or common facilities, or dividing walls or similar features in a residential building should not cause the residential building to be considered or any part thereon as part of a pre-existing residential building.