On June 5th, the Ministry of Finance of the UAE announced Cabinet Decision No. 56 of 2023 “On the Taxation of Non-Residents in the UAE” regarding the corporate tax law.

According to the decision, foreign non-resident companies will be subject to corporate tax on income derived from real estate and other immovable property located in the UAE. Additionally, such companies will be required to register in the UAE as corporate tax payers. These requirements apply to both commercial and investment properties.

Non-resident legal entities that own property in the UAE will be subject to corporate tax based on “net income,” which is calculated after deducting relevant expenses.

Income from real estate investments derived from immovable property in the UAE, owned directly or through a trust, fund, or other structure that is considered fiscally transparent for the purposes of UAE corporate tax, is generally not subject to corporate tax. However, this applies only if it is not a licensed entrepreneurial activity.

Furthermore, real estate investment trusts and other qualified investment funds may qualify for an exemption from corporate tax on income derived from investments in real estate in the UAE, subject to compliance with relevant conditions.

The Ministry of Finance of the Arab countries has announced the launch of three new ministerial decisions on the law “On the taxation of corporations and enterprises”.

The discussion is about three solutions:

Ministerial Decision No. 116 of 2023 on exclusion from participation.

Ministerial Decision No. 114 of 2023 regarding imagery and accounting methods;

Ministerial Decision No. 115 of 2023 on Pension and Social Security Funds;

Exclusion decision

The “participation exemption” decision means that a UAE company that owns shares in foreign companies can be exempt from paying taxes on dividends. For this company, it is necessary to own a share of at least 5% in a foreign company and to be the holder of such a share for at least 12 months. Participation exemption if the subsidiary is located in a country with a tax rate of at least 9% or shows that it pays an effective tax rate of at least 9% on its profits, income or equity. This decision also clarifies that the exemption is granted to one-time types of rights holders, such as preferred shares, ordinary shares and others. But to receive this benefit, the total value of the right must be at least 4,000,000 dirhams.

Solutions for a wide range of accounting methods

The Accounting Standard and Method Decision provides guidance to businesses on the preparation of Financial Statements that will form the basis for calculating taxable income. According to the decision, International Financial Reporting Standards (IFRS) are the applicable accounting standards in the UAE and must be adopted in accordance with international accounting standards for more than AED 50,000,000. The solution also allows small and adult businesses with revenues of less than AED 50,000,000 to use IFRS. Assumptions, samples do not exceed 3,000,000 dirhams, can calculate the tax base on the basis of cash accounting.

Pension Fund Solutions

The Pension and Social Insurance Fund (SIF) decision sets out additional conditions to exclude pension funds and SIFs in the UAE from corporate court. The decision to consider this RIAC case is tax practice and the legality of such a decision from the point of view of other countries, which is probably the basis for considering the case for the avoidance of double taxation. In addition, the decision clarifies the maximum disbursements per beneficiary and the requirements for annual confirmation of compliance with the statutory auditor.

Dubai has simplified the rules for obtaining a three-year investor visa when buying property.

According to the Dubai Land Department, it is now enough to invest 750,000 dirhams in ready-made real estate to obtain residency, and not a million, as it was before.

In this case, the investor gets the right to apply for a residence permit in the UAE with the possibility of extension and sponsoring his family.

To apply for a three-year UAE resident visa, the investor must provide a passport and an electronic copy of the certificate of ownership. The cost of obtaining an investor visa at the Land Department is about 12,000 thousand dirhams.

On September 14, 2021, a unique event was held in Dubai – “Business Day for Professionals”, organized by PARUS Management Consultancies.

Business Day for Professionals – Business Tour for lawyers, consultants and professional intermediaries.

The United Arab Emirates relatively recently became an independent state. During this time, the state has become one of the main players in the oil market, an important tourist and business center, where the values of the West and the traditions of the East coexist peacefully. Thanks to this, the country has become interesting for investments from all over the world, but even now not all foreigners can decide to organize a business in such an attractive, but for many still exotic and mysterious eastern country.

Our event was organized for a detailed acquaintance with the UAE as a jurisdiction for doing business, in order to show how everything works from the inside, to reveal and answer all the exciting questions, in the absence of which there were difficulties in working with this jurisdiction.

We thank all those present for their active participation, your attention, positive attitude and good company! It’s a pleasure to work with you!
We hope that your participation was the most useful and enjoyable for you!

We express special gratitude for the support to our partners Bosco Conference
Thanks for the cooperation proven over the years!

See you next time!
PARUS Management Consultancies

The UAE Government has embarked on one of the largest overhauls in recent years of the legal system and a number of changes to the country’s legislation, which was announced on November 7, 2020.

The laws, effective immediately, reflect progressive measures to improve the standard of living in a country that continues to be a center of attraction for foreign direct investment and for people from all over the world living in the UAE.

The amendments to existing laws and the introduction of new laws aim to regulate essential personal and civil rights, with provisions allowing non-UAE citizens to manage their personal affairs in accordance with the laws of their home countries.

In the UAE, where more than 200 nationalities live, they try to take into account all their needs. The reforms will affect laws relating to divorce and separation, separation of wills and estates, alcohol, suicide, and the protection of women.

The changes also mean that the laws of a person’s country of origin can be used for divorce and inheritance, meaning that Islamic law or Sharia will now rarely be used when it comes to family law cases involving expatriates. A number of these measures have been discussed in the UAE for some time, and the entry into force of the new laws reflects an important milestone in the ongoing progress of the country’s judiciary.

Judicial procedure:

The new law provides for the provision of interpreters to defendants and witnesses during court hearings if they do not speak Arabic. The court must ensure that legal interpreters are available. In addition, new privacy laws mean that evidence related to “indecency” cases must be protected and cannot be publicly disclosed.

Suicide and “caring citizens”:

Suicide and attempted suicide will be decriminalized. Until now, someone who tried to commit suicide but survived could be prosecuted, although such cases were rare. The police and the courts will provide psychological support to these people. But nevertheless, anyone who helped a person in a suicide attempt faces a prison term without a specified term.

The law also ensures that “caring citizens” who intervene to help people cannot be held responsible for the results of those they help. According to a long-standing but rarely used provision, someone who came to someone’s aid – gave artificial respiration or provided other first aid – could be held liable for involuntary injury or subsequent death.

The new law states that “any person who performs an act of good intentions that may ultimately harm that person will not be punished.”

Pursuit and attack:

There are a number of amendments aimed at protecting the rights of women. There will no longer be an excuse for crimes known as “honour crimes” where a male relative can receive a lighter sentence for assaulting a female relative under the pretense of “defending honour”. Such incidents will be treated as crimes like any other attack.

There will be harsher penalties for men who subject women to harassment and harassment of any kind. The law is a continuation of a law passed earlier last year that provides for stricter penalties for harassment and also recognizes that men can be victims of harassment or harassment.

The punishment for raping a minor or a person with mental disabilities would be execution.

Alcohol consumption:

Drinking alcohol is no longer criminalized. Anyone who drinks, stores alcohol, or sells alcoholic beverages in permitted areas without an alcohol license will no longer be subject to fines.

To legally consume alcohol in the UAE, a person must be at least 21 years old, and anyone caught selling alcohol to a minor will be punished. Alcohol may only be consumed in private or in permitted public places.

In September, Abu Dhabi ended the alcohol licensing system for residents. Previously, a license was required to purchase or consume alcohol. Now the new federal law will be extended to all Emirates.

Divorce :

One of the most significant changes concerns divorce, the separation of spouses and the division of property in the event of a divorce. If a couple married in their home country but divorced in the UAE, one would expect the divorce process to be similar to that practiced under Sharia in a UAE court.

Now, instead, the laws of the country in which the marriage took place will apply. The new law mentions joint assets and joint accounts, and that a court can be called in to mediate if there is no agreement between the two parties.

Cohabitation for unmarried couples:

For the first time, the law allows legal cohabitation not with