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Extension Approved for Filing VAT Returns

The Federal Tax Authority has issued a directive extending the filing date for VAT Returns for the Tax Period ending 31 March 2020, from 28 April 2020 till 28 May 2020.

The FTA, the government entity responsible for the administration, collection and enforcement of federal taxes, was established in 2016 by the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, via Federal Decree-Law 13 of 2016.

The payment of the VAT due for this Tax Period will also only be payable on 28 May 2020. This extension should provide an extended period for Taxable Persons to collect payments for Tax Invoices due to them to allow them to meet their VAT obligations to the FTA.

A VAT Return calculates how much VAT you owe by looking at: Your total sales and purchases across a three-month accounting period. The amount of VAT you owe for sales. The amount of VAT you can reclaim for purchases made by your business.

The FTA further announced that the extension will also apply to Taxable Persons that lodge monthly VAT Returns and that the VAT Return and payment of the VAT due for the Tax Period from 1 March 2020 till 31 March 2020 will also only be due on 28 May 2020.

The abovementioned directive from the FTA will only pertain to VAT Returns for the Tax Periods that ended on 31 March 2020, and does not affect any other Tax Periods where the deadline for filing Tax Returns and settling of payable taxes does not fall in April 2020.

Attorney General Announces COVID-19 Regulations

In most common law jurisdictions, the attorney general or attorney-general is the main legal advisor to the government. The plural is attorneys general. In some jurisdictions, attorneys general also have executive responsibility for law enforcement, prosecutions or even responsibility for legal affairs generally.

The UAE Attorney General has issued resolution of 2020 following Cabinet Decision No. 17 of 2020 regarding the implementation of regulations for spreading communicable diseases.

The resolution covers 15 penalties, ranging from AED 500 to AED 50,000, which aim to curb the spread of the novel coronavirus in the United Arab Emirates.

The Attorney General has clarified that the fine for not wearing medical masks in closed places can only be imposed on patients suffering from chronic diseases and on people who are suffering from symptoms of flu and cold and fail to maintain social distancing while among other people.

The following are the violations and associated fines as issued under the Attorney General’s resolution:

  • Fine for not complying with instructions of home quarantine and/or not following the guidelines under the Home Quarantine Guide– AED 50,000
  • Fine for patients who refuse mandatory hospitalisation or fail to take the prescribed medicines despite being alerted – AED 50,000
  • Fine for violating administrative closure of public places like shopping centres, malls, outdoor markets, gyms, public swimming pools, cinemas, clubs, parks and restaurants – AED 50,000
  • Fine for organising social gatherings, meetings and public celebrations – AED 10,000
  • Fine for not conducting a medical test upon request – AED 5,000
  • Fine for violating precautionary measures set by the UAE Ministry of Health and Prevention by people coming from nations affected by communicable diseases – AED 2,000
  • Fine for failure to observe health measures regarding regulation of roads, markets and other public places exempted from temporary closure – AED 3,000
  • Fine for failure to dispose of clothes, luggage or any temporary structures proved to be contaminated, which can’t be disinfected by the standard established methods – AED 3,000
  • Fine for unnecessary visits to hospitals and other health facilities – AED 1,000
  • Fine for exceeding the maximum number of allowed persons in a car – AED 1,000
  • Fine for not wearing medical masks indoors and failure to maintain social distancing by persons suffering from chronic disease or having symptoms of flu and cold – AED 1,000
  • Fine for leaving home unnecessarily and without reason, except for important work or a genuine reason – AED 2,000
  • Fine for violating provisions of the law when burying or transporting the body of a person who died from a communicable disease – AED 3,000
  • Fine for drivers failing to maintain hygiene and following sterilisation procedures in public transportation – AED 5,000
  • Fine for failure to take precautionary measures, failure for the crew of ships from the captain or shipping agent, as the case may be – AED 10,000

The National Emergency, Crisis and Disasters Federal Prosecution has been entrusted with the task of implementation of the resolution and may seek assistance from local and public authorities as required.

The penalties shall be doubled in amount for repeat violators and if the violator commits a third offence, he will be referred to the National Emergency, Crisis and Disasters Federal Prosecution for appropriate action. Further, the violator must also bear the costs of any repairs for damages occurring due to the violation.

The resolution is a part of the government’s measures to combat the spread of coronavirus and to protect the health of citizens and residents of the United Arab Emirates by curbing unnecessary gathering and outings.

The Impact of Defamation on Social Media

Defamation is the oral or written communication of a false statement about another that unjustly harms their reputation and usually constitutes a tort or crime. In several countries, a true statement can also be considered defamation.

In an era where often more questions arise than answers, the public is eager to read, share and explore everyone’s views on a particular topic.

Whether you are journalists or reporters providing professional coverage, business owners responsible for your employees’ conduct, family members responsible for your children or dependants’ actions, we all need some guidance and practical answers, in order to be aware of the legal implications of how we use our social media.

Whilst naturally we are all expressing and discussing our thoughts on the impact of COVID-19, it is important to be aware of the potential legal implications that the dissemination of information and expressions of opinion or fact could have in the United Arab Emirates.

Within the contents of this short article, we will outline the key points which individuals should be aware of before submitting and/or disseminating information, pictures, posts or any audio, audio-visual or written material regarding COVID-19 into the public domain. The points covered by this article are applicable to individuals, , patients, advice, corporations or any other form of information. The two major risks can be broadly summarised as an i) Invasion of Privacy and ii) Defamation.

Privacy. The right to a private and dignified family life is considered inherent in the United Arab Emirates and is appropriately safeguarded by numerous applicable laws and regulations. The disclosure of information or secrets relating to someone’s private or family’s life will attract liability under the Penal Code, the Cyber Crimes Law as well as laws related to media and publications in United Arab Emirates, if no prior consent is obtained from the individual.

This can include an image, photo, short videos or any materials that expose individual to the public without their consent, even for the purpose of public awareness.

To put this into the context of COVID-19, to expose an individual as exhibiting symptoms or as having the virus is likely to be interpreted as an invasion of an individual’s right to a private life. Furthermore, to take a picture of another person in a public place and ‘disseminate it’ by publishing it online could also be interpreted as an invasion of privacy.

The United Arab Emirates Criminal Court of Cassation issued a binding court judgement in relation to privacy laws in 2016, where it affirmed the imposition of serious sanctions against all entities involved in publishing content that violates the privacy of individuals. The individuals, in this case, were walking in public areas yet, they were filmed without their consent and this subsequently raised a claim for the invasion of privacy. The sanctions imposed by the Court of Cassation as a result of this invasion of a right to a private life included fines and deportation from United Arab Emirates territory.

The fundamental point is that patients, children, names, images, medical situations or related data, can all be classified as private information, which is exclusive owned by the individual concerned The disclosure of this information, in any form, should be carefully reviewed and assessed, in order to mitigate any potential risk.

It is important that Employers or Individuals with dependants, raise awareness on the implications of reporting on social media platforms in respect of the applicable laws to ensure no violation, even if unintentional, occurs. Ignorance of the law or lack of intention to violate another’s right to privacy is not an excuse. It should be noted that simply re-sharing what someone else has shared or published will not exempt an individual or entity from liability.

We have observed a high level of professionalism and adherence with the applicable laws and the third parties rights of media service providers, including TV channels, radio stations, online newspapers and other mediums. This is apparent from all the reports and audio-visual content that we are receiving in relation to COVID-19. We have also witnessed reliable content on the topic that provides sufficient information to public and corroborates with official sources.

Defamation. Defamatory or libellous posts on social media could result in defamation claims under the applicable laws in the United Arab Emirates. Whilst the creation and dissemination of parodic posts and content is a common occurrence in the United Kingdom and Europe, it is important to be aware that parody is not an available defence under United Arab Emirates Law. Instead, it is more likely that a parody may be seen as an attempt to humiliate an individual or an entity and to harm their reputation, no matter how ridiculous the parody is.

More recently, an exception to this rule was passed in the United Arab Emirates in DIFC Intellectual Property Law number 4 of 2019, in which it is considered that a registered Trademark, or a well-known Trademark, is not infringed in the DIFC if it is used in news reporting, news commentary or parody. However, this exception is specifically limited to DIFC and in relation to trademarks. This shows a willingness for parodic content to be recognised in the future, but for now, the public should be aware that parodic content, could be pursued by the concerned individuals and/or entities in UAE under the applicable defamation laws.

To put this into context, any posts relating to patients, medical staff members, law enforcement agencies or the public reacting to incidents of public interest can be subject to legal liability. Defamation criminal liability is pursuable within a strict time bar from publishing defamatory content. However, civil liability and invasion of privacy criminal claims can be longer than defamation offenses.

It is worth reminding everyone that in accordance with articles 372 and 373 of United Arab Emirates Federal Law No. 3 of 1987 in the United Arab Emirates, a defamatory statement is one that exposes a person to public hatred or contempt, even if the statement is true and correct. This means that a person is potentially exposed to a claim for defamation by publishing or disseminating any negative news about an individual or an entity. If the defamatory statement is made against a public officer or governmental entity, the imposed sanction could be significantly worse.

We should all be aware that the protection of privacy, for the data of patients, defamation, cyber-crimes and all other related legal provisions in the United Arab Emirates are going to be likely reviewed and subject to enforcement proceedings should any violations be revealed. The priority now is for public safety but authorities and concerned individuals will be monitoring and documenting posted content that may be revisited in the future to explore any legal liabilities.

On a final note, social media platforms are extremely beneficial to the general public as they enable the transmission of awareness, encourage the freedom of speech and facilitate communication on an international basis, at a time where countries are shutting their borders and encouraging people to isolate. For example, the level of awareness that people gained on COVID-19 in such a short period is unprecedented. However, users should be aware that social media platforms are not private and the misuse of such platforms by sharing any content, statement or image that they come across, is subject to appropriate sanctions.

Freedom of speech is granted and protected so long as it is in compliance with local regulations and public orders.

UAE Courts Postpone All Judicial Hearings

UAE courts in its Resolution No. of 2020 issued on March 17, 2020 concerning the adjournment of judicial hearings and working remotely decided on postponing all judicial hearings for the Court of Cassation, the Court of Appeal, and the First Instance Courts, and suspending testimonies and documentation of personal status from Sunday.

Some exceptions were made in the Resolution to the consideration of cases of temporary and urgent matters, online requests, criminal cases and appeals that include detainees and inmates.

The Resolution called on all court judges to file judgements at their specified sessions during the postponement period.

In a move to maintain the continuity of work, the Resolution activates a trial remote working system with a phased approach.

In the first week, a maximum of 30% of the workforce can work from home. For the second week and thereafter, the management of the courts will continually assess how things are progressing and will allow working from home to apply up to a maximum percentage of staff, which is higher than 30%. The Resolution also notes that it is of paramount importance during the remote working that the privacy and confidentiality of cases is in no way compromised.

The Resolution also specifies that employees from different disciplines and job grades are included in the trial with the possibility that employees exchange system implementation periodically to ensure business continuity in organisational units.

And that work in various sectors is normal and that no services are stopped and to maintain the commitment of the employees to the standards and controls stipulated in the information security system for the Emirate of Dubai and approved by the Dubai Electronic Security Centre, especially the sub-officer, remote entry security.

The Resolution also gives priority in applying the system to pregnant women, the elderly, people of determination and workers who suffer from chronic diseases related to the respiratory system or those that cause immune deficiency.

The Resolution called on all attendees not to visit the courts in person for all claims and requests services that can be submitted and followed up through the electronic and smart systems of courts and on all concerned authorities to follow up the implementation and take the necessary measures as of its date.

Can Employers Terminate Employees Due to COVID-19 Pandemic?

A pandemic is an epidemic of an infectious disease that has spread across a large region, for instance multiple continents or worldwide, affecting a substantial number of individuals. A widespread endemic disease with a stable number of infected individuals is not a pandemic.

With the recent outbreak of the COVID-19 Virus, the hardest hit are establishments within the hospitality, F&B and retail industry, with many restaurants, gyms and many other businesses being forced to shut their doors temporarily or at least downscale their production and / or services drastically.

The greatest expense for most businesses is the payment of employee salaries. In circumstances where businesses are sometimes not operating and employees are not working as a result of the COVID-19 outbreak and the resulting measures adopted by the United Arab Emirates government, certain queries arise.

BSA provides answers to these queries in an effort to allow employers / businesses to curb their losses and employees to know their rights.

Employment provisions relating to the COVID-19 outbreak

At the outset, it is important to note that, to date, no special provisions / exceptions have been implemented to govern the relations between the establishments that have been affected by the mandatory closures relating to the COVID-19 outbreak; and their employees.

BSA has reached out to the MOHRE and they have confirmed that their stance thus far is that the COVID-19 outbreak has not been declared a force majeure event and in the absence of special provisions relating to the exceptional measures taken as a result of the COVID-19 outbreak, the status quo remains and both employers and employees will be bound by their rights and obligations as outlined in Federal Law no. 8 of 1980 and their relevant employment agreements.

In light of this unprecedented global pandemic, it is preferable for employers and employees to enter into discussions, negotiate and agree upon terms that are acceptable to all parties involved.

Can an employer terminate an employee under the current circumstances resulting from the COVID-19 pandemic?

In the absence of specific provisions adopted as a result of the COVID-19 outbreak, employers can terminate their employees, however, such terminations will be governed by the provisions of the Labour Law and the relevant employment contract. Any such employers will likely be required to settle the employees’ dues and will be at risk of facing arbitrary dismissal claims. In circumstances where the COVID-19 has not been declared a force majeure event, employers will need to assess this risk in light of the Labour Law.

The same rules will apply as regards limited term employment contracts given that the Covid-19 outbreak has not yet been deemed a legitimate justification for termination. As such, if an employer terminates an employee as a result of the COVID-19 pandemic, the termination will be considered to be without cause and the employer may be held liable for compensating the employee.

Can an employer compel its employees to take unpaid leave?

In light of the COVID-19 outbreak and resulting mandatory closures, many employers are likely to attempt to avoid payment of their employees’ salaries and consider their absence as ‘unpaid leave’.

Any such attempt will be considered unlawful under the Labour Law as employers are not permitted to ‘freeze’ the employment of their personnel for a set period of time.

Unless the parties agree that the employee will be taking an unpaid leave, an employer’s instruction to enforce unpaid leave on his employees will constitute a breach of the Labour Law and the contract given that the employer will be failing to pay the employee’s salary.

Can an employer compel its employees to take their annual leave during the COVID-19 outbreak?

The general principles embodied in Article 76 of the Labour Law state that the employer may determine the date of the commencement of the annual leave, and may divide it if necessary, to two or more periods. This right has been given to employers since they are the responsible persons who are aware of the volume of work being undertaken by the company, and also to determine the priority as to when the work must be executed.

This right is given with a view to prioritise continuity of work. In view of this principle, the converse is also applicable during this period of slowdown caused by the outbreak of COVID-19, where there is a discontinuity of work. Therefore, given the above information, the employer can determine the date of commencement of an employee’s annual leave during the COVID-19 outbreak.

Can an employer impose a salary reduction?

Should an employer perform any deduction of salaries outside the scope of Article 60 and the employment contract, an employee can seek the recovery of any deducted amount before the competent labour courts.

In a context of cooperation during these unparalleled circumstances, parties may wish to agree upon a structure suitable for both the business, which is likely to be facing financial difficulties arising out of the COVID-19 outbreak, and its employees, who need to be paid their salaries, in an effort to avoid mass terminations as a result of the pandemic.

Is there a moratorium on salary payments?

The MOHRE has confirmed that at this point, the status quo remains, notwithstanding the COVID-19 outbreak. As such, there is no moratorium on the payment of salaries and employers must continue with making salary payments unless the employment contract provides otherwise.

The peculiarity of the situation will undeniably need to be considered by labour courts when hearing employment cases arising out of the COVID-19 outbreak.

Taking affirmative steps now is especially important as companies currently can foresee and attempt to mitigate any potential operational impacts in advance of the outbreak spreading to any new locality. Ideally, businesses will be able to plan accordingly to avoid any disruptions in their operations if the virus continues to spread.

Foreign Investment In The United Arab Emirates

The United Arab Emirates, or simply the Emirates, is a country in Western Asia. It is located at the eastern end of the Arabian Peninsula, and shares borders with Oman and Saudi Arabia, while having maritime borders in the Persian Gulf with Qatar and Iran.

Foreign investment denotes that foreigners have an active role in management as a part of their investment or an equity stake large enough to enable the foreign investor to influence business strategy. A modern trend leans toward globalisation, where multinational firms have investments in a variety of countries.

Following from our recent newsflash regarding foreign ownership of businesses in the UAE, Sheikh Mohammed bin Rashid Al Maktoum, UAE Prime Minister and Ruler of Dubai, has now made a statement approving the sectors and economic activities which are eligible for up to 100% foreign ownership. These include 122 economic activities covering industrial, agricultural, and services sectors.

This foreign ownership law is part of a multifaceted strategy by the UAE to increase foreign investment in the region.

With BSA, you can trust you will receive the best legal service, with advice delivered clearly and in a straightforward manner, and an authentic partner who will take the utmost care and responsibility of your portfolio.

BSA Overview

BSA is a law firm founded in Dubai with the mission of delivering top-tier legal services based on our comprehensive knowledge of local, national, and international law.

Since our inception in 2001, we have rapidly expanded to a leading full-service law firm, with offices throughout the Middle East and France.

Our lawyers are internationally educated, bi-lingual in languages such as English, Arabic, and French, and dual-qualified in both regional and international jurisdictions, having rights of audience in every country within which we operate.

BSA is a law firm that truly reflects the energy and ambition of the Middle East.