The UAE government has introduced certain measures that will offer economic relief to UAE businesses suffering under the strain of COVID-19 ramifications.
Although the UAE has not announced any direct relief from tax payment obligations similar to those introduced in KSA, the governments of both the Emirates of Dubai and Abu Dhabi have introduced financial assistance measures due to the current COVID-19 crisis.
THE EMIRATE OF DUBAI
In the Emirate of Dubai, the government has introduced the following measures:
- An AED1,5 billion business stimulation package involving the reduction in fees payable by businesses for three months
- Dubai Customs introduced the following measures which will be in place from 15 March 2020 till 30 June 2020:
- A refund of 20% of all Customs Duty paid on goods at 5% which have been sold locally
- The revokation of the AED50,000 cash or bank guarantees required to conduct customs broker activities and the refund of existing guarantees held to these brokers and clearing companies
- The exemption from berthing fees as well as direct and indirect loading fees for boats that qualify as traditional wooden commercial boats registered in the UAE at either Dubai Creek or Hamriyah Port
THE EMIRATE OF ABU DHABI
In the Emirate of Abu Dhabi, the government has introduced:
- With effect from 16 March 2020, a 16 point stimulus plan involving fee exemptions, fine waivers, SME support initiatives
- An AED 5 billion water and electricity subsidy scheme
- An AED 3 billion SME credit guarantee programme
- The establishment of a AED 1 billion market maker fund to sustain a balanced supply and demand balance for stocks
- The suspension of performance bonds for bidding procedures
- A 25% reduction on new industrial land leasing fees
- The waiver of industrial and commercial penalties
- Cancellation of individual and commercial real estate registration fees
- The payment of government approved invoices within 15 days
- The suspension of Tourism and Municipality Fees for the tourism and entertainment sectors for 2020
- Waiver of performance guarantees for start-ups for projects up till AED 50 million.
In addition to the government’s measures the private sector has also stepped up to the plate and numerous of the large property leasing companies have offered reduced and even exemptions from rental payments for commercial tenants that have had to shut down their businesses due to COVID-19. Various banks, property developers and even utility suppliers have also offered payment holidays and have deferred evictions and legal collections in the light of the current situation in the UAE relating to COVID-19.
Should you be experiencing financial pressures and would like to take advantage of any of the above measures, BSA is ready and eager to assist.
Authored by Head of Indirect Tax and Conveyancing, John Peacock