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June 10, 2020
Multiple measures have been taken by the government of UAE to impede the impact of corona virus in health and economic altogether. The UAE Federal Government has declared certain nationwide improvement or preventive measures, notwithstanding measures taken by the individual Emirates of Abu Dhabi and Dubai to help their particular Emirates. For instance, the government has issued Cabinet Resolution 17 of the year 2020 obliging all individuals and companies to adhere with the preventive and health measures issued by the regulatory authorities for combatting COVID-19.
Importantly, anyone failing to comply with such provisions shall be exposed to all criminal penalties which may include imprisonment or fine which will be decided by the Attorney General of the country. Commercial Lawyers of Dubai have been witnessing the grants and relaxation issued by the government for the companies and small scale industry to curb the severe impact of corona virus on the economy.
TAX relation for companiesIn furtherance, the present article discuss about the grants issued by the government with regards to the taxation or custom duties imposed. UAE do not impose corporate or income tax on the individuals or the companies, however, very recently indirect taxes were imposed on all residents of UAE be it a natural or a legal person. Wherein, VAT (Value Added Tax) is one of the indirect tax and other custom duties and the government of Dubai has issued a regulation for refund of 20% custom duty on imports of goods sold within the country. Furthermore, the government has removed the obligation of submitting bank guarantees for clearing goods for customs brokers and has ordered for refunding the prevailing bank guarantees for such companies.
Apart from Dubai, the government of Sharjah has exempted shipping clearance companies to submit bank guarantees for conducting their activities as of 01 April 2020. The Federal Tax Authority has reported a one month expansion to the assessment time frame for Excise charge purposes. The period beginning 1 March 2020 has been stretched out to 30 April 2020 (covering both March and April 2020) to permit enrolled organizations extra an ideal opportunity to satisfy their assessment commitments before the all-encompassing cutoff time. Moreover, the Federal Tax Authority has offered one month extension for submitting tax return monthly or quarterly.
In addition, UAE government do not impose any other sorts of taxes on companies or even on individuals. Apart from the taxation reliefs, the UAE central bank has issued further benefits for small and medium sized enterprises such as loans on zero interest rate, lower interest on real estate loans, and reduction in bank fees for credit cards. In the Emirate of Dubai, residents are enjoying 50% reduction in municipality fees paid by hotel industry, reduction in DEWA bills, and reduction in other governmental charges.
It is apparent that the government of UAE have been fortunate in assisting the small companies, investors, labors and other residents of UAE in terms of issuing regulations which can somehow try to beat the drastic economic impact of covid-19.