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.

On September 11, as part of the UAE 50 Projects program, new types of Green Visa and Freelancer Visa were accepted.

Obtaining a Green Visa makes it possible to officially work without concluding an employment contract with an employer, obtain residency in the UAE and be a visa sponsor for your family

Green Visa can be obtained by real estate investors, entrepreneurs, highly qualified doctors, teachers, athletes, the best students and graduates of world famous universities, as well as heads of small and medium-sized enterprises, scientists and others.

Freelance Visa is available to self-employed workers from the UAE and abroad, specializing in areas such as artificial intelligence, blockchain and digital currencies.

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