UAE taxes, laws and charges coming into effect from January 2025

RELATED: Dubai's new 30 per cent alcohol tax explained The UAE has put its new year's resolutions in place, with landmark legislation being introduced for the start of 2025 to improve access to health care, safeguard the environment and bolster the economy. As well as new flagship policies, the UAE will continue its commitment to growing the local workforce as private sector companies set their sights on Emiratisation targets in the months ahead. The financial landscape will come into sharp focus as new taxation rules for big business are brought into force, while there will also be extra charges for consumers to be aware of. Here, The National examines the updated laws of the land that will help to shape the national agenda in 2025. Basic health insurance for all private sector and domestic workers who do not already have coverage will be mandated as of January 1. The major reform will extend health insurance provision – already in place in Abu Dhabi and Dubai – to employees in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah. Employers are required to buy the new health insurance as a condition of issuing or renewing residency permits. However, the mandate does not apply to employees with work permits issued before January 1, 2024 that remain valid, and will only become mandatory when their residency permits are due for renewal. The insurance policy – covering people up to the age of 64 – will be valid for two years. The second-year premium can be refunded if the visa is cancelled. The basic insurance package costs Dh320 ($87) a year, with no waiting period for workers suffering from chronic illnesses. “This pricing makes it highly accessible, ensuring a larger portion of the population can secure essential health coverage for their dependents,” said Neeraj Gupta, chief executive of Policybazaar.ae. Dubai will step up its drive to tackle plastic waste from January 1. The emirate banned single-use bags, made of any material, in June 2024 and will step up its eco-friendly strategy over the next two years. The new ban will include styrofoam containers and cups, as well as plastic stirrers, straws, table covers and cotton buds with plastic stems. In January 2026, the final phase of the scheme will see single-use plastic cups prohibited, along with plastic lids, cutlery, food containers and plates. Dubai's plan is part of a nationwide effort to limit single-use products to minimise plastic waste and foster a culture of recycling among businesses and the community. In December, Abu Dhabi announced it had cut more than 360 million single-use plastic bags since a ban came into effect in 2022. That is the equivalent of 2,400 tonnes of plastic. The capital outlawed disposable cups, lids, plates and takeaway containers made from styrofoam in June. The UAE will impose a new tax on large companies in the country as part of a shake-up of corporate tax law . Large multinational enterprises (MNEs) are to pay a minimum of 15 per cent tax on profits generated in the country (up from the current corporate tax rate of 9 per cent), for financial years starting on or after January 1, 2025, the Ministry of Finance said last month. The domestic minimum top-up tax (DMTT) will apply to multinational enterprises with consolidated global revenues of €750 million ($793 million) or more in at least two of the four immediately preceding financial years. The UAE initially introduced the federal corporate tax with a standard statutory rate of 9 per cent starting from the financial year beginning on or after June 1 last year. The government will increase its Emiratisation goals from the start of the year, as part of a wider drive for 10 per cent of the skilled private sector workforce to be made up of Emiratis by the end of 2026. Private companies with 50 or more staff must ensure 7 per cent of employees are Emirati by the end of June 2025, under twice-yearly targets. That figure must increase to 8 per cent by the end of 2025. Smaller businesses with 20 to 49 employees – across 14 sectors – were mandated to hire at least one Emirati in a skilled position by the end of 2024 and retain the citizens employed by them before the start of that year. Companies which fail to hit the government targets will be fined Dh96,000 for each unappointed Emirati worker. Financial penalties will be imposed from January 1. More than 124,000 Emiratis are now employed across 23,000 private companies, the Ministry of Human Resources and Emiratisation said last week. The UAE is to introduce mandatory premarital genetic testing for all Emirati couples from January in an effort to boost early detection of diseases and allow citizens to make informed choices when planning families. The screening strategy was rolled out in Abu Dhabi in October and will now be extended across the Emirates. The Ministry of Health and Prevention said its aim was to create an integrated database to identify genetic diseases and allow for early medical intervention. Dr Fahed Al Marzooqi, deputy chief operating officer of Abu Dhabi technology-enabled healthcare company M42, said genetic testing was critical to identify diseases more prevalent among the Emirati population. “In the UAE, this is especially important due to the high prevalence of genetic disorders within the Emirati population, partly attributed to the region’s history of consanguineous marriages,” he previously told The National. “Understanding genetic risks allows healthcare providers to take proactive measures, improving patient outcomes and reducing the long-term burden of chronic diseases like cardiovascular disease and diabetes,” he said. Dubai is to increase the cost for drivers to pass through the city's toll gates for the first time, from Dh4 to Dh6 during peak hours. The emirate's transport authority said the increase would be enforced from 6am to 10am and 4pm to 8pm. Off-peak charges, between 10am and 4pm and from 8pm to 1am will remain at Dh4. The gates will be free to cross between 1am and 6am. The toll will also be Dh4 on Sundays, excluding public holidays, special occasions or major events. The decision came days after two more Salik gates opened in Dubai. The variable rates are part of a “comprehensive strategy to enhance traffic flow”, the Roads and Transport Authority said. The amount that Dubai residents pay for sewerage will rise for the first time in 10 years, as the city manages a growing population . The new fees will begin at 1.5 fils per gallon, from the current rate of 1 fil. The charge will increase to 2 fils per gallon in 2026 and 2.8 fils per gallon in January 2027 – an 180 per cent increase on the previous cost. Dubai's government said the cost of water, which many countries in the Middle East suffer a shortage of, remained lower than many global cities. “Dubai’s robust economic growth, coupled with a significant population increase, has driven the need for continuous infrastructure development across all service sectors to accommodate the needs of its expanding resident and visitor base,” Dubai Government Media Office said.

UAE taxes, laws and charges coming into effect from January 2025

Government will seek to address health care inequality, protect the environment and rethink its tax strategies