Keren Bobker advises a Dubai accountant on employment laws. Jeffrey E Biteng / The National
Keren Bobker advises a Dubai accountant on employment laws. Jeffrey E Biteng / The National
Keren Bobker advises a Dubai accountant on employment laws. Jeffrey E Biteng / The National
Keren Bobker advises a Dubai accountant on employment laws. Jeffrey E Biteng / The National

Business

Dubai accountant told ‘pay Dh5,000 to get passport and certificates back from employer’

Keren Bobker advises an employee who also had to pay flight costs and has been told to pay Dh1,100 for a medical.

Keren Bobker

September 14, 2014

  • English
  • Arabic

I am new to Dubai and working for a firm of accountants, having joined only a couple of months ago. After two weeks I felt this was not the right place for me as my employer is unpleasant to all the staff. One day I told him that I could not stay with the company any more and he asked me to contact the PRO. When I did so, I was told that I need to pay Dh5,000 to get my passport and educational certificates back from him. My visa is a pink one and I have not been for a medical yet. I had to pay the cost of my flight to Dubai and when I asked about the medical I was told I would have to pay Dh1,100 to get this done. Is it OK for me to leave? ML, Dubai

The clearly stated policy of the Ministry of Labour is that an employer is responsible for the costs of taking on an employee and these must not be passed on to the individual. These include the costs of arranging a residency visa and the associated medical. Holding someone’s passport and demanding money for it to be given back is extortion and highly illegal. If ML has not been for the required medical examination he will not have a residency visa and should not be subject to an employment ban on leaving the company, although this situation is rarely clear cut. I recommend he contact the Ministry of Labour to get their assistance in reclaiming his passport and other documents without this illegal charge.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with more than 20 years’ experience. Contact her at keren@holbornassets.com Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

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Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.

“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says. 

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Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

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Total received: €4,756

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