There was a law that came into effect in 1980. It was originally a law called Federal Law No. 8 of 1980. This has remained the main UAE labor law for many years.
However, a new law, Federal Decree Law No. 33 of 2021, was introduced in February 2022. This new law replaced the previous one and brought in many changes to address the evolving job market.
So, let’s dive deeper and understand what are some of its important considerations.
According to UAE labor law, the working hours will vary depending on whether you work in the private or government sectors.
If you are working in the private sector, your working hours will be 48 hours a week, considering 8 hours each day. However, in Ramadan the working hours will be reduced by 2 hours. Every employee is also entitled to a break if they continue to work for a maximum of 5 hours. It’s important to note that the break will be less than 1 hour and this period will also not be included in the working hours of the day.
If someone is working in a Government sector, the working hours will also be 8 hours a day, usually from 7:00 AM to 3:00 PM (Monday to Thursday). Friday timings will vary such as 7:00 AM to 12:00 PM. It means you will be working 4 days a week and Friday will be half a day. Still, there are some exceptions to this rule, such as Sharjah, where an employee works 4 days a week only (Friday, Saturday, and Sunday are off days).
To promote work-life balance, UAE labor law also enforces some leaves and holidays for employees.
For instance, if you are working in the private sector, you are entitled to the following leaves;
Both employers and employees must provide written notice to the other party if they wish to terminate the contract. This notice period typically ranges from 30 days to 90 days, depending on the employment contract and the employee’s wage structure.
However, the termination can happen for various valid reasons, but they must be documented. With that, the termination can even occur without any prior notice, but there must be a valid reason, such as bankruptcy.
The UAE labor law is clear on the need for work permits and visas for foreign workers.
Following are some of the key points of it.
The probation period remains the same at 6 months for both parties. However, the new UAE labor law has imposed some regulations on both parties.
For instance, an employer can terminate an employee’s contract during the probation period. In such cases, the employer doesn’t need to provide any reason, but they must provide written notice at least 14 days before the last working day.
However, if an employee is joining another company within the UAE, then he must give written notice at least 30 days before to the current employer.
In the newly amended UAE labor law, it’s clearly mentioned that if there is a dispute between both parties for a minimum of AED 50000, then MOHRE will act as a judge. It will be his responsibility to settle the matter with the decision.
Remember that the MOHRE judge has the same powers as any court judge. However, if any of the parties is not satisfied with the decision, then they can also file an appeal against the order, but it should be done within 15 days only.
Under UAE labor law, an employee is also entitled to 5 days of calender leave in case of a spouse’s death and 3 days of leave on the death of siblings, child, parent, grandparents, or child.
It is also described as a compassionate leave in the law.
The UAE Government has just introduced a new end-of-service gratuity scheme under which any payment or contractual entitlement must be made within 14 days.
Under this scheme, the employer can also offer an option to employees to contribute to a monthly investment fund instead of receiving a lump sum gratuity payment upon termination. The ultimate aim of this scheme was to provide safety to the employees against inflation and to help them bear the consequences of resignation.
The considerations mentioned above are the summary of a new UAE labor law that states the basic rules and regulations to protect the rights of both parties. If you need any sort of help or further clarification regarding any of the rules, we are always here to help.
Reach out to us using our Contact Us page or comment below.
]]>Taxes imposed on corporate profits are known as corporate taxes. In addition to fostering corporate openness, corporate tax assists in creating new revenue streams for the government. Government funding and corporate accountability are largely made possible by corporate taxation. Alternatively known as corporate income tax, corporate profits tax, or corporation revenue tax, corporate tax is also defined as follows. Creating revenue for the government, which supports economic growth, is one of the primary goals of this kind of taxation. Country-to-country variations exist in the corporate tax services. If your taxable income is up to AED 375,000, the CT rate in the United Arab Emirates is 0%; if it is more than that, the rate is 9%.
By guaranteeing that all businesses are paying an equitable share of taxes, corporate tax promotes tax equity amongst enterprises. Corporate tax services ensure fair distribution of the tax burden. It is a tax on corporate revenue or profits. While some nations use business taxes as a source of funding for their governments, others use them to pay for other public services. In any case, it promotes national prosperity and controls regional economies.
Corporate taxes contribute to the stabilization of the economy. It can be applied to boost, slow down, strengthen, and lower deficits in the economy. It is among a nation’s primary sources of income. The amount of revenue a firm generates determines the amount of corporate tax. An entity is taxed by applying the applicable CT percentage to its profits if it passes the taxable threshold.
Compared to personal taxes paid by people and households, corporate taxes offer several advantages. For instance, corporate tax rates are not as prone to fluctuations in the business cycle as personal income tax rates are. Furthermore, because just one company needs to be monitored rather than numerous people or families, corporation tax administration is simpler than personal income tax administration. Because they don’t need self-reporting by every individual involved in determining how much money should be paid out each year, they are therefore frequently seen as less intrusive on corporations when compared to personal taxes. For the avoidance of doubt, income taxes and personal taxes are not currently applied in the UAE.
Corporate tax lowers public debt and contributes to social security. Every citizen of every nation and every state depends heavily on social security. Social Security protects against death, disability, unemployment, old age, and job loss, allowing people to lead better lives free from severe financial hardships. Corporate taxes aid in debt reduction for a nation. This is required since public debt harms interest rates and currency value, both of which have an immediate negative impact on small companies in any nation or economy.
The government receives funding from corporate tax to operate public services like healthcare, education, transportation, etc. Both the economy and the overall well-being of the populace depend on these services. The money raised through CT also assists governments in offering specialized education to its populace in fields like blockchain, digitization, artificial intelligence, and others that ultimately lead to a knowledge-based economy. High levels of specialized expertise draw large levels of foreign direct investment, which in turn generate a wealth of business and employment prospects.
You can prevent paying too much tax by having corporate tax services. You might be able to get a refund if you use it to identify any mistakes in your tax return. There are also several legitimate methods that you might be able to avoid paying taxes that you wouldn’t otherwise need to. Your company will be completely compliant with the laws controlling corporate tax in the United Arab Emirates thanks to our extensive tax knowledge and experience working with multi-million dollar corporations.
]]>