UAE announces fee refund for tax ‘clarification’ charges

From now on, fees paid for the ‘private clarification’ of tax will be refunded in cases if the clarification is not issued, the Federal Tax Authority (FTA) announced.

Under ‘private clarification’, companies could submit a request to seek further clarification related to taxes issued by the FTA. The companies had to pay for this service from 1 June 2023. The new rules came into force on 1 August 2024

If the request was related to one or more than one tax, and the clarification was not issued, the full fee will be refunded. If the request is relating to more than one tax, and the clarification was issued for only one tax, a part of the fee will be refunded.

The amount to be refunded will be decided by calculating the difference between the fee for more than one tax, and the fee for one tax.

According to the FTA, cases where the clarification is not issued and the fee will be refunded will include:

• where the private clarification request is withdrawn by the applicant within two business days from the date of submitting the request.
• where the private clarification is submitted by a person who is not registered for Corporate Tax and the subject of the clarification is not related to an inquiry about tax registration.
• where the applicant is subject to tax audit by the FTA at the time of submitting the request.
• where the private clarification request is related to the procedures that should be applied as a result of a decision issued by the FTA.
• where the private clarification request is a duplication to another private clarification request, submitted by the same applicant with the same subject and documents, that the FTA is working on.

 

Government beefs up fines for breaches of employment law

The UAE government has introduced fines of up to Dh1 million (£207,000) for employers who violate the Emirates’ employment laws.

Under the new provisions, a fine ranging from Dh100,000 to Dh1 million will be imposed on employers for the following breaches:

• Employing a worker without a work permit or bringing them without providing any job.
• Closing a business without settling right of workers.
• Taking part in fraudulent labour acts including fraudulent employment or fictitious Emiratisation.
• Employing a minor in violation of the law.
• Engaging in any act of circumvention of the laws or regulations governing the labour market, including fictitious employment.

Penalties will multiply based on the number of workers fictitiously employed, according to the new rules.

Additionally, the Ministry of Human Resources and Emiratisation is now authorised to make a settlement provided that the employer pays 50% of the minimum value of the fine and pays back to the government the financial incentives obtained by the fake employees.

The amended regulations stipulate that any criminal proceedings for fictitious employment, including fake Emiratisation, can only be initiated at the request of the Minister of Human Resources and Emiratisation.

They also state that any disputes between employers and employees should be referred to the Court of First Instance — rather than the Court of Appeal — if there is a disagreement with the decision made by the Ministry of Human Resources and Emiratisation in resolving the dispute.

Aparna Nambissan, a legal consultant at dispute resolution specialists ATB legal, commented: “This decree marks a significant stride in the UAE’s ongoing efforts to fortify its legislative and legal frameworks. By clearly delineating the rights and obligations of all parties, the government aims to boost the efficiency and competitiveness of the labour market, ensuring robust protection under the law.”

She added: “These amendments not only signal the UAE’s commitment to fostering a transparent and fair labour environment but also serve as a stern warning to those contemplating circumventing the established legal protocols.”