UAE: 3 deadlines that will go into effect for companies, employees next month

Penalties include a fine of Dh42,000, which will increase by Dh1,000 annually until 2026

Since the start of 2023, several initiatives have gone into effect in the UAE, including new Emiratisation rules and a ban on plastics in Ajman and Umm Al Quwain. As the fifth month of the year rolls around, just a month remains for a number of deadlines to come into effect in June 2023.

From corporate tax to unemployment insurance, here are 3 deadlines companies and employees in the UAE should keep an eye out for next month.

 

1. Corporate tax, June 1


The UAE’s Ministry of Finance has issued two decisions that seek to bring transparency and clarity to the country’s corporate tax regime, which will come into effect from June 1, 2023.

 

Ministerial Decision No. 82 of 2023 specifies that taxable entities— including qualifying free zone companies — that derive revenues of over Dh50 million are required to prepare and maintain audited financial statements.

 

2. Emiratisation target, June 30


The Ministry of Human Resources and Emiratisation (MoHRE) recently announced that by June 30, companies with 50 employees or more must have 1 per cent of Emiratis in skilled jobs. This is in addition to the 2 per cent Emiratisation that companies must have had achieved by the end of 2022.

 

In July 2023, fines will be applied on non-compliant companies for not achieving the required half-yearly rate for this year as well as the 2022 targets. A penalty of Dh42,000 will be applied for every Emirati not hired. The calculation is Dh7,000 per month for 2023. The fines will increase by Dh1,000 annually until 2026.

 

3. Job loss insurance, June 30


Employees who fail to meet the June 30 deadline for unemployment insurance subscription will have to pay penalties.

It is mandatory for all employees of both public and private sectors to sign up for the scheme under Federal Decree-Law No. 13 of 2022. Subscription opened on January 1, 2023.

 

Officially called Involuntary Loss of Employment (ILOE) insurance, it seeks to provide residents with financial security in case they lose their jobs due to reasons other than disciplinary action or resignation.