Sri Krishna
The United Arab Emirates has witnessed a series of significant changes since the start of 2023, with the implementation of various initiatives such as the introduction of new Emiratisation regulations and a ban on plastics in Ajman and Umm Al Quwain. As the fifth month of the year approaches, it is worth noting that several important deadlines are set to take effect in June 2023, with just a month left to prepare for their implementation.
Next month, companies and employees in the UAE should pay close attention to three upcoming deadlines, including corporate tax and unemployment insurance.
Deadline 1: Corporate Tax System – 1st June
The Ministry of Finance in the UAE has recently announced two decisions that aim to enhance transparency and provide more clarity regarding the country’s corporate tax system. These decisions will be implemented on June 1, 2023.
Under Ministerial Decision No. 82 of 2023, taxable entities, including qualifying free zone companies, that generate revenues exceeding Dh50 million will be obligated to prepare and retain audited financial statements.
Deadline 2: Emiratisation target, 30th June
The Ministry of Human Resources and Emiratisation (MoHRE) has made an announcement that by June 30, companies with a workforce of 50 employees or more are required to have 1 per cent of Emiratis in skilled positions. This new requirement is in addition to the previous mandate for companies to achieve 2 per cent Emiratisation by the end of 2022.
Starting from July 2023, companies that fail to meet the required half-yearly Emiratisation targets for both 2021 and 2022 will be subjected to fines. Non-compliant companies will be fined Dh42,000 for every Emirati position that remains unfilled. The penalty will be calculated at a rate of Dh7,000 per month in 2023 and will increase annually by Dh1,000 until 2026.
Deadline 3: Job loss insurance, 30th June
Employees who do not subscribe to the unemployment insurance scheme by the June 30 deadline will be subject to penalties. The Federal Decree-Law No. 13 of 2022 mandates all public and private sector employees to enroll in the scheme, with subscription opening on January 1, 2023.
The insurance scheme, officially known as Involuntary Loss of Employment (ILOE) insurance, aims to offer financial support to residents who lose their jobs due to reasons other than disciplinary action or resignation.
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