#Minimum Salary Threshold

[lexlawuk]

Global Business Mobility: Guide to UK Specialist Worker Visa Application

The Senior or Specialist Worker visa allows you to come to or remain in the UK to undertake a qualifying job at your employer’s UK branch. This visa has replaced the Intra-company Transfer visa, which was previously known as the Tier 2 (Intra-company Transfer) Long-term Staff visa. In this comprehensive guide, we’ll explore the eligibility requirements, application process, and benefits of the…

[dontmeantobepoliticalbut]

Salaried employees who work long hours for low pay aren’t finding much sympathy among Republicans on Capitol Hill.

GOP lawmakers filed a resolution in Congress on Wednesday that would block the Labor Department from extending overtime protections to millions of salaried workers, a key workplace reform pursued by President Joe Biden.

Under federal law, only certain workers have a right to time-and-a-half pay when they work more than 40 hours in a week. Currently, salaried workers must earn less than $35,568 per year to be automatically entitled to the overtime pay.

A new rule from the Labor Department, finalized in April, would raise that salary threshold to $58,656 per year, bringing an estimated 4 million additional workers under the law’s protection. Employers would then have to pay those workers a premium when they work additional hours, whereas now they don’t have to pay them anything at all for that time.

But the GOP lawmakers have filed what’s known as a “resolution of disapproval” under the Congressional Review Act, which, if passed and signed into law, would nullify the reform.

Rep. Tim Walberg (R-Mich.) sponsored the resolution in the GOP-controlled House. Forty Republican colleagues have joined him as co-sponsors as of Friday. No Democrats have signed on to the legislation.

GOP Sen. Mike Braun (Ind.) is leading the companion legislation in the Senate, where Democrats hold a threadbare majority.

Republicans have used the Congressional Review Act to kill progressive reforms before, most notably at the end of Barack Obama’s presidency.

This particular effort has slim chances of succeeding, since the legislation would face a Biden veto threat if it managed to pass both chambers. And regardless of the maneuvers in Washington, Biden’s overtime reforms face the possibility of being blocked in federal court. But the resolution still helps show where both parties stand on a key economic issue — worker pay — in an election year.

Business groups have come out strongly against Biden’s overtime rule and have opposed similar reforms for years, claiming they would force employers to cut jobs. But giving more employees overtime protections is popular among voters, much like the idea of raising the minimum wage.

The Labor Department estimates the reform would transfer $1.5 billion a year from employers to employees in the form of higher wages. The benefits would go disproportionately to workers who are women and people of color, according to an analysis from the Economic Policy Institute, a left-leaning think tank.

But Walberg called the overtime changes “burdensome” in a statement and claimed it would lead to inflation.

“Small businesses, nonprofits, and colleges across America will now be looking at bottom lines, and then make the tough decisions to lay off valuable staff or force salaried workers into hourly positions,” he said.

Braun argued that overtime decisions should be left to the bosses. “If the free market sets the price of labor, opportunity and prosperity are the result,” he said.

Overtime protections in the U.S. stretch back to the Great Depression, when the right to time-and-a-half pay was first enshrined in law. The idea was to prevent employers from overworking their employees, and to spread more work around during a time of high unemployment. If a company would have to pay a premium to work someone overtime, the thinking went, then the employer might choose to hire another worker to cover the additional hours.

But the law has gone long stretches without being updated, and so fewer employees as a share of the broader workforce now enjoy overtime rights compared with decades ago.

The Labor Department said when it announced the proposed reforms that it was trying to rectify “outdated and out-of-sync rules” that leave many low-paid salaried employees — retail store managers in particular — working lots of extra hours with nothing to show for it.

[beardedmrbean]

A restaurant partially owned by California Governor Gavin Newsom is recruiting for a $16-per-hour role, despite a new state law guaranteeing a minimum wage of $20 per hour for fast-food workers. The restaurant appears not to meet the threshold for the new minimum wage, a law that Newsom himself signed to much fanfare in September.

The Context

On April 1, the new law guaranteeing a minimum wage of $20 per hour for fast-food workers employed in large chains took effect across California, up from the previous minimum of $16.

The law was passed by Democrats in the state legislature last year but has come under fire from some Republicans who claim it will cost jobs. A wage of $20 per hour for a full-time worker results in an annual salary of $41,600.

The new law applies to those restaurants that are part of a chain of 60 or more venues nationwide and which offer limited or no table service.

What We Know

PlumpJack Café in Olympic Valley, California, is seeking a part-time busser to "assist the food server in the restaurant to ensure guest satisfaction during all aspects of the dining experience."

The advert, placed on job posting website ZipRecruiter, says that the employee will be paid $16 per hour and their duties will include clearing dishes from tables, the preparation of caffeinated drinks and decorating tables prior to customer arrival.

The café is owned by the PlumpJack Group, a company founded by Newsom which specializes in wine and high-end dining. Its website says that PlumpJack Group operates four bars or restaurants, placing it well below the threshold for the $20 per hour minimum wage to take effect.

Newsom placed his ownership interests in the PlumpJack Group into a blind trust in 2018, and has had no day-to-day involvement in the running of the company since assuming office in January 2019.

Newsweek has contacted Newsom and the PlumpJack Group for comment outside of normal working hours.

The official PlumpJack Group website states: "In 1992, Gavin Newsom opened his first business, PlumpJack Wines, combining his passion for wine and his driving entrepreneurial spirit.

"Over the next decade, the PlumpJack Group began to grow under his leadership to include many of the restaurants, wineries, and retail establishments in the current portfolio."

Views

Republican State Assembly member Joe Patterson shared screenshots of the PlumpJack Café, PlumpJack Group website referring to Newsom as its founder and the rental cost of two properties in the area on X, formerly Twitter.

He added: "I wonder why @CAgovernor @GavinNewson's food businesses don't pay $20/hour? Live job posting at $16/hr in Olympic Valley. It's very, very expensive to live there... but he doesn't do as he tells others and doesn't pay a living wage."

The increased minimum wage for fast-food workers more generally has been criticized by some Republicans who warn it will reduce the number of jobs.

Speaking to DailyMail.com, Rep. Doug LaMalfa from California said: "As if prices in California aren't high enough. Fast food prices are already rising, and employees are being replaced by self-checkout kiosks and soon robot cooks.

"Nearly everyone will be worse off: higher prices, fewer jobs, fewer eating options as places close, and fewer small businesses. Ultimately this new $20 minimum wage will affect nearly every job, with similar results."

In an earnings call at the end of October, McDonald's CEO Chris Kempczinski said that "there is going to be a wage impact for our California franchisees," which he added would have to be partially "worked through with higher pricing."

In February, Newsom denied a report by Bloomberg News that he pushed for a separate exception to the new minimum wage law that benefits a campaign donor. The law exempts restaurants that have on-site bakeries and sell bread as a standalone menu item.

As a result, Greg Flynn, a billionaire and Newsom donor, could save hundreds of thousands of dollars at his Panera Bread outlets in California, according to Bloomberg.

A spokesman denied any connection, saying: "This story is absurd."

In January, a baseline minimum wage of $16 came into effect across California.

[strawberryblondebutch]

Let's talk contract incentives

Or, how the Pittsburgh Pirates burned bridges over $200k

This is Ryan John "Rowdy" Tellez. Up until yesterday, he was a member of the Pittsburgh Pirates of Major League Baseball. Two days ago, the team designated him for assignment. When no other team wanted to pick him up, he was released from his contract.

The decision baffled fans, analysts, and other front office staff. Tellez was by no means a star -- his 91 OPS+ was slightly below average (OPS+ is normalized to 100), but his advanced analytics showed he was still playable. More importantly, there were only six games left in the regular season, and the Pirates had already been eliminated from playoff contention. They had nothing to play for, and Tellez would have been a free agent at the end of the year anyway.

Then Ethan Hullihen found something interesting.

Tellez, prior to his release, had 421 plate appearances on the season for the Pirates. At 425, he would receive a bonus -- if he came to the plate four more times in those remaining six games, he gets $200k. Rather than shell out for him, the Pirates simply said goodbye and good luck. Well...

So... what exactly are contract incentives?

For starters, they're about the one thing players and teams can agree on. Teams like them because, unlike your base salary, incentives don't count against the salary cap or luxury tax. It's a way of stashing money under the table -- sure, officially you might be making $3 million, and as far as the league is concerned, that's what you're making. But if you hit the marks we both expect you to, here's a little something on the top. Players like them because it's a way to bet on yourself. Extra money for being good at your job! Who doesn't want that!

Common incentives are:

Awards. Most Valuable Player. Cy Young Award. Defensive Player of the Year. Most Improved. Rookie of the Year. These awards don't come with any money of their own... not from the league. But if you win one, your team will give you a little walkin' around money for it. Some contracts also offer a smaller bonus if you finish in second or third place for these awards.

"Counting" stats. MLB has mostly phased these out, but other sports still have them. Unlike "rate" stats like points per game, these are exactly what they sound like. NFL players trigger incentives on numbers of touchdowns or receiving yards. An NHL player who hits a certain goal threshold will get a payout. Occasionally you see rate stats get incentives, but this requires more math and is less fun for the player involved.

Just showing up. Did you spend X number of minutes on the ice or on the court? Did you come up to the plate X number of times or pitch X number of innings? Hell yeah, brother. These incentives are often (but not always) reserved for bench players and players that are often injured. In the former case, hitting those appearance milestones means you played your way into regular time and are rewarded for that. In the latter, it's the team's way of saying, "Look. You're great when you're healthy. Prove you can be healthy."

This last point is important in Tellez's case, because he was signed as the Pirates' starting first baseman. If you play a 162-game season and receive a minimum of three plate appearances per game, that's 486 PAs right there. Now, that's an oversimplification of how many PAs Tellez could expect to have: he might miss games, he might come to the plate more than three times in a game. But a 425-PA incentive for a guy you expect to start? That's low. When the Phillies signed Aaron Nola to a seven-year extension last November, they explicitly did not include any incentives for innings pitched. Why? Because Nola is expected to pitch 200 innings a year. That's automatic money. All his bonuses are for awards.

Now, as I said earlier, Tellez isn't exactly a star. He probably won't make any of those awards. (Notably, "DS MVP" is an award that doesn't actually exist, but it's a standard player incentive in case MLB decides to start offering that as an award). But he probably expected to have 475 plate appearances. That's an extra $400k.

Instead, the Pirates decided to save themselves $200k. Which, in baseball terms? That's pocket change. Minimum salary is $700k a season. Bob Nutting, the owner of the Pirates and the guy who would be signing that bonus check, is worth $1.1 billion.

This is a different case than when the Chicago Cubs released Hector Neris earlier in the year, for a few reasons.

The Cubs released Neris on August 20, when they were still competing for a Wild Card spot... and with enough time for another team (in this case the Houston Astros) to sign him.

While Tellez was only a below-average player, Neris was effectively unplayable at the time of his release. For a reliever, you want a WHIP (walks plus hits per innings pitched) below 1 -- in layman's terms, "less than one baserunner per outing." Neris was sitting at a 1.5 WHIP, and the eye test said that he was untrustworthy in high leverage situations.

Unlike Tellez, who would be a free agent anyway, once Neris reached his innings threshold, he got a vesting option: another year on his contract and another $9 million. That's significantly more money and a lost roster spot for a guy you can't trust in the clutch.

Now, I'm not blinded by loyalty to a team I like. How the Cubs went about the release was wrong. They did it quietly and appeared to blindside Neris with the decision. But from a business perspective, you have one team deciding to cut their losses on an employee they no longer trust. The other team is emptying out the tip jar just before closing.

So, why does this story matter? Because people are seeing it. Players are seeing it, and you bet their agents are. The Pirates need a new first baseman in 2025. Let's say, for the sake of it, Garrett Cooper is exploring his options and the Pirates come calling. Cooper's agent has a real incentive (see what I did there?) to say, "I can't be sure you won't be screwing my client out of $200k, so go ahead and add that to his base salary or we're taking our talents elsewhere." Players who have the decision between another team and the Pirates will take the team that doesn't have this newfound reputation for screwing over their role players.

Pittsburgh has not, in recent history, been an attractive free agency destination. They're a cheap team with no clear path to competing. They draft well, and then those players hit free agency and go to greener pastures. Now? Now they're screwed. All because Bob Nutting didn't want to cut off some scraps.

[collapsedsquid]

Last September, Stanford acquired the 759-unit Oak Creek Apartments in Palo Alto in an effort to expand housing options for the Stanford community, especially postdoctoral scholars. Now, the University is facing criticism from postdocs who claim that their University-paid salaries fall short of the salary thresholds required to live in the apartments. [...] Oncology postdoc Ziwei Wang applied for housing at Oak Creek in order to be closer to work. After joining the waitlist in September, she was offered a one-bedroom apartment in March. Wang was given 24 hours to respond to her offer, which she quickly accepted.  When she began filling out the documents to accept the request, however, Wang says she realized she was ineligible for the housing due to a minimum income requirement. “One of the qualifications was that my salary had to be two and a half times more than the rent,” Wang said. “And apparently, even though the University is the one that pays me, my salary was not qualified for that.”

We must seize control of the university, dictatorship of the postdocs!

[jjtax]

Understanding Tax Refunds: JJ Tax made it easy

Handling tax refunds can seem overwhelming, but having a clear grasp of the process can make it straightforward. This newsletter aims to demystify tax refunds by covering key aspects: eligibility criteria, claiming procedures and tracking your refund status.

What is a Tax Refund?

A tax refund represents the amount returned to taxpayers who have overpaid their taxes over the fiscal year. This situation arises when the total tax deducted or paid exceeds the actual tax liability determined based on their income.

In India, tax payments are made through TDS (Tax Deducted at Source), advance tax, or self-assessment tax. When the total tax paid or deducted surpasses your tax liability as calculated in your Income Tax Return (ITR), the excess amount is refunded. This mechanism ensures taxpayers are reimbursed for any overpayments.

Who is Eligible for a Tax Refund?

Eligibility for a tax refund depends on various factors:

Excess Tax Payments If your TDS or advance tax payments exceed your tax liability, you’re eligible for a refund. This often applies to salaried employees, freelancers, and individuals with taxable investment income.

Claiming Deductions If you claim deductions under sections like 80C, 80D, etc., and these deductions lower your tax liability below the total tax paid, a refund may be due.

Filing an Income Tax Return Only those who file their Income Tax Return can claim a refund. The return must accurately reflect your income, deductions, and tax payments to establish if a refund is warranted.

Losses to Set Off If you have losses from previous years or the current year that can be carried forward and set off against current year income, you might be eligible for a refund if these losses reduce your tax liability.

Who is Not Eligible for a Tax Refund?

Certain situations or individuals may not qualify for a tax refund:

Income Below Taxable Threshold If your total income is below the taxable limit, a refund may not be applicable.

Salary Below Government Criteria Individuals earning below the minimum threshold specified by the Government of India may not qualify for a refund.

No Overpayment If your tax payments match your tax liability or you haven’t overpaid, a refund will not be available.

Non-Filers or Incorrect Filers Those who fail to file their Income Tax Return or file it incorrectly will not be eligible for a refund. Proper filing is essential for initiating the refund process.

Invalid Deductions Claims for deductions that do not meet tax regulations or lack valid documentation may result in a refund rejection.

Incorrect Bank Details If the bank account information provided in your ITR is incorrect or incomplete, the refund may not be processed.

How to Claim Your Tax Refund

Here’s a step-by-step guide to claiming your tax refund:

File Your Income Tax Return (ITR) Access the Income Tax Department’s e-filing portal. Choose the correct ITR form based on your income sources and eligibility. Accurately complete all required details, including income, deductions, and tax payments.

Verify Your ITR Verify your ITR using Aadhaar OTP, net banking, or by sending a signed ITR-V to the Centralised Processing Centre (CPC). Verification must be completed within 120 days of filing your ITR.

ITR Processing The Income Tax Department will process your return, assess your tax liability, and determine the refund amount. This process can take a few weeks to several months.

Refund Issuance After processing, the refund will be credited directly to your bank account. Ensure your bank details are accurate and up-to-date in your ITR.

Update Bank Account Details (if needed) If your bank details change after filing your ITR, promptly update them on the e-filing portal to ensure correct refund crediting.

How to Check Your ITR Refund Status for FY 2024-2025

To check your refund status, follow these steps:

Visit the Income Tax E-Filing Portal Go to the official Income Tax Department e-filing website.

Access the 'Refund Status' Section Navigate to the ‘Refund Status’ page, typically under the ‘Services’ tab or a similar heading.

Enter Required Details Input your PAN (Permanent Account Number) and the assessment year for your filed return.

Review the Status The portal will show the status of your refund, including whether it has been processed, approved, or if further action is needed.

Track Refund Processing Keep an eye on any updates or notifications from the Income Tax Department regarding your refund.

Understanding the tax refund process can simplify the experience. By following these steps and staying informed about your eligibility, you can make sure that you have a smooth process and quickly receipt of any excess tax payments. For expert guidance and personalized assistance, consult with JJ Tax. Visit our website or contact us today to get the support you need for all your tax-related queries.

JJ Tax

[dreaminginthedeepsouth]

Dave Whammond

* * * *

LETTERS FROM AN AMERICAN

April 23, 2024

HEATHER COX RICHARDSON

APR 24, 2024

In the past two days, the Biden-Harris administration has announced a wide range of new rules to protect ordinary Americans. 

Yesterday, Vice President Kamala Harris announced that the administration has finalized two new rules affecting patients in nursing homes and receiving home care, as well as the workers who care for them. The first sets minimum staffing requirements for facilities funded by Medicare and Medicaid, and the second concerns how home healthcare companies account for Medicaid funding. 

In a speech at the Hmong Cultural and Community Agency in La Crosse, Wisconsin, Harris noted the extraordinary value of healthcare workers. She also explained that about 1.2 million Americans live in federally funded nursing homes, which make up about four fifths of the nursing homes in the country. But the majority of those homes—about 75% of them—are understaffed. This is dangerous and isolating for patients and demoralizing for workers, who have high rates of burnout and turnover.  

Now, nursing homes that receive federal funding will have to provide at least 3.48 hours of nursing care per resident every day, less than the 4.1 hours the Centers for Medicare and Medicaid Services advocate but enough to require the hiring of about 12,000 registered nurses and 77,000 aides, at an annual cost of almost $7 billion. 

Consumer organizations and labor unions pushed for the new rule, but nursing home operators strongly oppose the new mandate, saying it will force facilities to close because of a shortage of nurses. In response, Health and Human Services secretary Xavier Becerra told Tami Luhby of CNN that no one should live in facilities that are unsafe or should receive inferior care. Luhby noted that the Centers for Medicare and Medicaid Services in September launched a $75 million campaign to increase the number of nurses in nursing homes.

The second rule the vice president announced had to do with home health aides. Medicaid currently pays about $125 billion a year to home healthcare companies, which employ hundreds of thousands of workers providing services for elderly and disabled Americans. These companies have never been required to report how that money was being spent. Now they will be required to spend 80% of the federal dollars they receive on workers’ salaries rather than administrative overhead.

Also yesterday, the Office for Civil Rights at the U.S. Department of Health and Human Services announced a final rule that strengthens the HIPAA medical privacy rule for people from states that ban abortions who seek reproductive health care in states that permit them. In response to threats by Republican state officials to charge women who cross state lines to obtain abortion, contraception, or fertility treatments, the new rule prohibits health care providers, health plans, and other entities from disclosing patients’ reproductive health care records to state officials when they are being sought to investigate or charge patients, doctors, or others.  

Today, the Labor Department announced a new rule that would guarantee that salaried workers who make less than $59,000 a year are compensated fairly for overtime work. The Trump administration set the salary threshold for those who did not have overtime protections at $35,568. As of July 1, 2024, the threshold will be $43,888, and on January 1, 2025, it will rise to $58,656. Senator Patty Murray (D-WA), former chair of the Senate Committee on Health, Education, Labor, and Pensions, said the change could affect 4 million workers.

“Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay,” acting secretary of the Department of Labor Julie Su said. “That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”

Also today, the Federal Trade Commission (FTC) voted 3–2 along party lines to ban the noncompete agreements that prevent workers from minimum-wage earners to top executives from changing jobs within the industry in which they work; senior executives can still be bound by such agreements. Initially used to protect trade secrets, noncompete clauses have expanded to cover what the FTC estimates to be 30 million people—one in five U.S. workers. They take away workers’ ability to improve their wages and conditions by quitting their jobs and moving to another company or starting their own. The FTC estimates that the end of such clauses could add almost $300 billion a year to workers’ wages. 

“Robbing people of their economic liberty also robs them of all sorts of other freedoms,” FTC Chair Lina Khan said. Neil Bradley, head of strategic advocacy for the U.S. Chamber of Commerce, countered: “If they can issue regulations with respect to unfair methods of competition, then there’s really no aspect of the U.S. economy they couldn’t regulate.” The U.S. Chamber of Commerce plans to sue over the rule. 

A CBS News/YouGov poll released Monday found that, although Biden and Harris have made addressing climate change a centerpiece of their administration, only 10% of the people who say they think climate change is a very important issue had heard or read a lot about what the administration has accomplished, and 49% said they had read not much or nothing about it. When told some of the things the administration has done, a strong majority of those who care about addressing climate change support those policies. 

“Even people who feel the administration has done too little on climate change support these policies,” reporters for CBS News note. They conclude that the disconnect “may be more about Mr. Biden needing to get his message out there than having to convince this ‘climate constituency’—those who call the climate issue very important—of the substance of his policies.” 

Meanwhile, today is the fourth anniversary of the press conference in which former president Donald Trump suggested injecting disinfectant to get rid of Covid, prompting the maker of Lysol to warn people not to use their disinfectant cleaning products internally. Four years later, Trump spent the day in a Manhattan courtroom, where his former friend David Pecker, who ran the company that published the National Enquirer tabloid magazine, testified for the prosecution. 

Legal analyst Lisa Rubin summarized Pecker’s testimony, noting that the big takeaways were that Trump and Pecker were transactional friends for decades and that “the agreement they struck in 2015 went way beyond the ‘catch and kill’ aspect of the scheme that has been known for years.” Together, they not only killed stories damaging to Trump, but also pushed fake stories about Ben Carson, Ted Cruz, and Marco Rubio, who were running against him for the 2016 Republican nomination, as well as Democratic rival Hillary Clinton.

As the trial grabs headlines, Trump’s power seems to be diminishing. He is demonstrably not in power in the courtroom, where he must do as the judge tells him and reporters say he has often fallen asleep, and none of his family members have shown up to support him.

Trump seems aware that his power is waning. Early yesterday, he called for supporters to “RALLY BEHIND MAGA,” but only a handful of people gathered outside the courthouse. Today he claimed that the turnout was low because police had “completely CLOSED DOWN” the streets around the courthouse. That was a lie: the streets, the sidewalk, even the courthouse have remained open to the public. 

Pennsylvania’s primary election today revealed Trump’s real electoral weakness. He won about 83.5% of the Republican votes, but Nikki Haley, who dropped out of the race in early March and has not campaigned since, won 16.5%. In the suburbs of Philadelphia, the so-called “collar counties,” Haley won closer to 25% of the Republican vote. 

Biden, meanwhile, took the fight against MAGA Republicans to Trump’s home state of Florida. There, an extreme abortion ban signed into law by Republican Governor Ron DeSantis will take effect on May 1, but in November, Florida voters will have the option to add protections for abortion before fetal viability to the state constitution, returning the state to the standards it had before the Supreme Court overturned Roe v. Wade. That measure is expected to energize Democrats in the state.

And then, tonight, by a vote of 79–18, the Senate passed the $95 billion national security supplemental bill that provides funding, mostly for military supplies, to Ukraine, Israel, and the Indo-Pacific and humanitarian aid for war-torn countries; requires the sale of TikTok; and permits confiscating Russian assets. MAGA Republicans are still adamantly opposed to aid for Ukraine, but a strong bipartisan majority has finally gotten the chance to weigh in.

As soon as the measure passed, Biden issued a statement, saying: “Tonight, a bipartisan majority in the Senate joined the House to answer history’s call at this critical inflection point. Congress has passed my legislation to strengthen our national security and send a message to the world about the power of American leadership: we stand resolutely for democracy and freedom, and against tyranny and oppression.”

LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

[theinconvenientlifestyle]

The Home Office charges £1,846 to apply to bring each family member to the UK, including dependents, and a further £1,560 healthcare surcharge for adults, or £1,175 for children.

British nationals must also earn at least £18,600 to apply for a visa for a spouse or partner or  £24,800 if they also have two children they want to bring over. This minimum income requirement is set to rise to £29,000 in spring. Partners or spouses also need to prove their knowledge of the English language to get a visa.

The government waived all fees, salary thresholds and language tests under the Ukraine Family Scheme, which was set up within weeks of Russia’s invasion. The scheme allows people fleeing the war in Ukraine to join their family in the UK. 

It is free to apply to the Ukraine Family Scheme and eligibility is extended to parents, grandparents, adult offspring, siblings, and their immediate family members. About 71,400 visas have been issued under the scheme so far.

[mythologeekwriter]

God this is horrifying

[Note: I am not copying the whole of these articles, please do read them, I'm just sharing the bits that I think illustrate why you should in fact read them.]

Five-point plan to cut UK immigration raises fears of more NHS staff shortages | Immigration and asylum | The Guardian

Cleverly told MPs on Monday that “migration is far too high and needs to come down … enough is enough”. He added: “Today I can announce that we will go even further than those provisions already in place, with a five-point plan to further curb immigration abuses that will deliver the biggest ever reduction in net migration. “In total, this package, plus our reduction in student dependants, will mean about 300,000 fewer people will come in future years than have come to the UK last year.” Along with raising the salary threshold and scrapping the “shortage occupation list”, Cleverly announced that social care workers would no longer be allowed to bring their dependants when they came to work in the UK. He also said people living in the UK – including British citizens – would now be allowed to sponsor family members to move to the UK only if the person living in the UK earned £38,700, up from £18,600 currently. Finally, the government is asking the Migration Advisory Committee to review the rules for those who have completed undergraduate degrees in the UK. A spokesperson for Downing Street called the package “the biggest clampdown on legal migration ever”. They added: “We believe this is a package which will enable us to significantly reduce numbers whilst achieving economic growth.” It forms one part of a two-part plan to reduce the numbers of people coming into Britain legally and illegally. This week Cleverly is likely to fly to Kigali to sign a new asylum treaty with Rwanda, with ministers ready to bring forward new legislation in an effort to finally kickstart the government’s Rwanda plan.

Families face being split up by UK plan to cut legal migration, lawyers say | Migration | The Guardian

Data suggests this could make it impossible for between 60 and 70% of workers to bring their family into the UK. The crackdown has caused concern among some senior Tory MPs. Alicia Kearns, the chair of the foreign affairs select committee, said on Tuesday she was worried the package as a whole risked dividing families. She told LBC: “It risks being very unconservative”. Madeleine Sumption, the director of the Migration Observatory at the University of Oxford, said: “This is definitely completely different to what any other high income country does.” Under the new rules, someone will be able to bring a family member into the country if they earn £38,700 year. If the partner is already in the UK, both people’s incomes will be taken into account. If someone does not qualify under those rules, they will still be allowed to bring in family members if they have sufficient savings. Under current rules that figure is £62,500, but the government is consulting over whether to increase it.

Lawyers and applicants say, however, that it has led to distress and confusion, with many families already in the process of applying for visas now unsure of what the changes will mean for them. Kelly Robinson, an American PhD student living in Norwich with her partner, Owen Sennitt, had applied for her spousal visa last week, confident Sennitt’s job as a local journalist would be enough to qualify for it. Now she believes she may have to return to the US after eight years living in Britain. “It is a real shock,” she said. “The entire life we have built is being taken away from us overnight.” Nick Gore, a partner at Carter Thomas solicitors, said: “This is devastating for many people that just about meet the existing financial requirements. There is a huge spectrum of people who are affected – some are on minimum wage jobs, others have started their own businesses. This will split families up.”

Thanks to James Cleverly, I may never live in the same country as my kids again | Claire Armitstead | The Guardian

When I mentioned their predicament to a lawyer friend he was dismissive, saying that middle-class families always found a way round these problems. Other friends suggested we remortgage our house to raise the £62,500 capital that was the alternative route to a spousal visa. But it would have to have been in their bank account for a minimum of six months before they even reapplied; this was time their soaring stress levels meant they didn’t have. And anyway, they wanted to pay their own way. The Home Office said any change to the capital threshold would be announced in due course. At the old salary rate, they probably would eventually have worked something out, but at the new one there is no chance. Their relationship will always be based on them both working, and while their combined income would very probably exceed £38,700 a year, neither is going to make that much on their own. My eldest and his partner are now happily settled, so wouldn’t want to move back anyway. The sort of social care work she does is more highly valued in Spain. Meanwhile, my Australian daughter-in-law is in the crazy bind facing citizens of so many of the UK’s former colonies: expected to bend the knee to the monarch of a British state that doesn’t want them. Australia asks the foreign partners of its citizens only to prove their relationship is genuine.

[mariacallous]

Turkey’s pollsters, including me, got it wrong. In the election held on the centennial of the Turkish Republic, incumbent President Recep Tayyip Erdogan got 49.5 percent in the first-round vote on May 14 despite polls suggesting he would get around 46 percent. Two weeks later, he took 52 percent of the popular vote in the second round of the presidential election, and his governing People’s Alliance secured 323 of the 600 seats in the parliament, allowing a handsome margin over the simple-majority threshold of 301. Come 2028, Erdogan will have been essentially leading the country for 25 uninterrupted years as either president or prime minister—an unprecedented reign.

The elections were free but far from fair. In a deeply polarized society, Erdogan has control over vast amounts of state resources as well as media that clearly provided an edge. Two days before the first round of the presidential election, Erdogan had a TV appearance that was broadcast simultaneously by 18 different TV stations, including the state broadcasting company, TRT. In contrast, his rival, Kemal Kilicdaroglu, was largely excluded from TRT—or covered unfairly—and did most of his communication through social media—most notably using iconic videos he recorded in his kitchen.

Sixteen ministers of his cabinet were nominated for the parliament, and they ran their campaigns with the full force of their ministries. However, the uneven playing field alone is not enough to explain the loss of the six-party opposition in the face of almost 50 percent inflation and an increasingly one-man rule that is failing to deliver in governance like it used to. Noteworthy is the fact that not only did Erdogan not lose, but his support seems to have remained solid over the past decade: In the presidential elections of 2014, 2018, and 2023, he got 51.8, 52.6, and 52.2 percent of the popular vote, respectively

An analysis of 680,000 smart TVs across Turkey revealed that in the fall of 2022, 89 percent of TVs that watched a show where Erdogan made an appearance did not tune into any show where an opposition leader was present. The same ratio for Kilicdaroglu was 33 percent. A disgruntled Justice and Development Party (AKP) supporter would not have a chance to hear what Kilicdaroglu had to say.

Clearly, yet not surprisingly, the Erdogan supporters had very little interest in what the opposition had to say. It was the conviction of the opposition and experts at large that the failing economy would render Erdogan supporters more amenable to opposition policies. Two findings seem to explain best why that was not the case.

First is the geographical divide that appeared in political inclinations after the election. In the rural parts of the country that represent roughly 20 percent of the population, Erdogan managed to get 65 percent of the popular vote against Kilicdaroglu’s 35 percent. In the remaining 80 percent that represents the urban parts, Kilicdaroglu surpassed Erdogan by getting 51 percent of the popular vote. In other words, in places where life is relatively simple and the increasing cost of living is not felt as ferociously, Erdogan performed much better.

Second is the unprecedented fiscal expansion that the government opted for in the lead-up to the election. The minimum wage was raised to $455 per month in December 2022, the highest real value since 2019. In addition, a bill eliminating age limits on retirement and offering early retirement to millions of citizens was ratified in the parliament.

Those who retired could be rehired by their current employers to enjoy a second salary, thereby significantly increasing monthly household income. Finally, the value of the U.S. dollar was kept below 20 lira at the expense of central bank reserves. Turkish people use the price of the dollar as a yardstick to measure the health of the economy, like Americans do with gas prices and Germans with inflation. As a result, economic sentiment turned positive. Perceived improvement was an illusion as it was caused by reckless fiscal expansion and not by resolving the root causes of macroeconomic vulnerabilities. The most notable illusion was a heavy discount on natural gas bills for households for the month of the election. Now that the party is over, the new government will have to pick up the bill. In our own polling at Turkiye Raporu, the share of respondents with a positive outlook of the economy surpassed the negative in March 2023. The improvement in consumer sentiment was well reflected in the polls prior to the election as support for the AKP.

The fiscal expansion indeed helped mitigate the discontent of Erdogan supporters. However, it was the polarizing identity politics that carried him over the 50 percent threshold into a third-term victory. Erdogan’s identity pitch had two main pillars. First was the rhetoric that suggested association of the opposition with the Kurdistan Workers’ Party (PKK), a listed terrorist organization. The pro-Kurdish HDP (rebranded as Green Left) not nominating a presidential candidate in support of Kilicdaroglu was presented as evidence. To this end, an altered video including PKK leaders in an opposition propaganda clip was shown at Erdogan’s Istanbul rally on May 7, a week before the first-round election. Even Erdogan accepted on national television that the video was altered. This was a first as far as Turkish political competition goes. It was done in the last week before the first round, and the opposition had no time to reverse the impact.

Second was the anti-LGBT, anti-Western, pro-conservative family values propaganda. Then-Interior Minister Suleyman Soylu went as far as to suggest that if the opposition won, the LGBT, which he portrayed as an organization, would allow for marriages between humans and animals. The opposition dismissed these as nonsense, although it should not have. The opposition should have recognized the misinformation trend earlier and focused on prebunking these claims.

These two pillars were supported by the achievements of the Turkish military-industrial complex that managed to produce the drones, aircraft carriers, and national tanks along with the national car project Togg. It did not help that the opposition appeared to be belittling these achievements during the campaign. These achievements were the promise of the new “Turkish century”—the overarching theme of Erdogan’s campaign.

The opposition is, of course, not without fault. The disorganized appearance of its leaders and a campaign that completely missed out on the rising nationalistic sentiment caused the disgruntled Erdogan supporters to stay on the other side of the aisle. The country was in bad shape, but they were told repeatedly that only Erdogan could put it back together. So much so that even in the earthquake zone, ravaged by the recent disasters, Erdogan dominated, although he proposed new houses to be built and sold, whereas Kilicdaroglu promised them to be built for free. The opposition did not manage to overcome the distrust created by the Erdogan campaign.

Having won the presidency and the majority in the parliament, Erdogan’s new government will face a number of challenges caused by poor economic management and the irresponsible fiscal pre-election expansion. The appointment of Mehmet Simsek, a former finance minister, to lead the economy potentially signals a change to rational economic policies. However, it remains to be seen how much leeway Erdogan will provide Simsek in the lead-up to the municipal elections. A tightening may not be in the books. Indeed, investors at home and abroad are weary. After all, they had seen signs of change with the appointment of Lutfi Elvan as head of the treasury and Naci Agbal as head of the central bank in hopes for normalization, only to see the two removed from duty abruptly back in 2021.

The opposition, on the other hand, now must reinvent itself and find ways to overcome the big split that for the past decade has kept it below the 50 percent threshold. The 48 percent it won is no small feat, but in an executive presidential system, it is simply not enough.

[allthebrazilianpolitics]

Lula pledges to raise minimum wage and income tax threshold

President Luiz Inácio Lula da Silva on Thursday pledged to raise Brazil’s minimum wage by 1.38 percent to BRL 1,320 (USD 251) in May. He also promised to raise the income tax threshold by almost 39 percent, to twice the new minimum wage.

Lula told CNN Brasil anchor Daniela Lima that his administration will reinstate the rule by which the minimum wage is adjusted annually according to both inflation and GDP growth. The same rule was enforced during the Lula, Dilma Rousseff, and Michel Temer administrations to make sure minimum salaries would increase above inflation. The custom was struck down by Jair Bolsonaro between 2019 and 2022.

Raising the minimum wage and reinstating a new annual adjustment rule were among Lula’s campaign promises in 2022. Since taking office, he suggested that possibility on multiple occasions but had fallen short of giving himself a deadline until today.

Continue reading.

[lexlawuk]

Your Guide to the Skilled Worker Visa in the UK

The Skilled Worker Visa serves as a gateway to the United Kingdom for individuals worldwide, offering a pathway to secure employment and potential settlement. Embracing diversity and talent, this visa route welcomes skilled professionals from diverse backgrounds, fostering growth and innovation within the UK workforce. Let’s explore the Skilled Worker Visa in detail, from eligibility requirements…

[simplysloved]

Federal Corporate Tax in UAE – Published Official CT Legislation

After the announcement by the government regarding the benefits of Corporate Tax in UAE (CT) and the frequently asked questions (FAQs) on January 31, 2022, as well as the publication of the Public Consultation Document in April 2022, the Federal Decree-Law no. 47 of 2022 regarding the Taxation of Corporations and Businesses UAE Corporate Tax Law has been released on December 9, 2022.

The UAE Corporate Tax Law is Federal Decree-Law No. 47 of 2022, enacted on October 3, 2022, and will be in force 15 days following its public publication by the Official Gazette. The UAE Corporate Tax law applies to profits from businesses in financial years beginning on or after June 1, 2023.

This article offers brief highlights of the new rules which were made public by The Ministry of Finance (“MoF”) and the Federal Tax Authority (“FTA”). It is important to note that the rules closely match those in the Public Consultation Document.

Additional details will be deferred to Cabinet and Tax Authority Decisions. Further guidance is expected to be issued to finalize all UAE Corporate Tax Legislation in areas such as the Free Zone and Director compensation guidelines. Following the publication of Corporate Tax Legislation, the MoF has confirmed that the implementation is scheduled for June 2023.

Scope of Corporate Tax in UAE

Corporate Tax in UAE will be applied to the adjusted net profit of the worldwide accounting of the company.

The UAE Corporate Tax regime has two rates of different types:

A tax-free rate will be applied to tax-paying earnings up to     a certain amount that is to be set in the Cabinet Decision (the FAQs relate to the threshold of AED 375,000)

The tax statutory standard rate is 9 percent.

The relative minimal tax burden of just 9% aims to ensure that the UAE has a competitive tax rate in the global marketplace.

The UAE Corporate Tax Law is silent in Article 3 on aspects governing the global minimum of 15% tax rate. That applies to MNEs that fall within the scope of Pillar Two, which is part of BEPS Pillar 2. OECD BEPS project and applies to multinational corporations (MNCs) that have consolidated worldwide revenues exceeding EUR 750 million (c. 3.15 billion AED) 3.15 billion) at any time in two of the preceding four years. The FAQs address the possibility of adopting within the UAE of BEPS Pillar 2.

Individuals:

Individuals also are affected by corporate taxation if they engage in business activities and are in line with general VAT rules of business activities. The Cabinet is expected to decide how to apply Corporate Tax in UAE to natural individuals. Thus, Corporate Tax in UAE does not apply to a person’s salary and other earnings earned through employment.

However, those who are earning income through an enterprise activity will be covered by Corporate Tax in UAE.

Free Zones

A clearly defined and specific policy (subject to a further Cabinet decision) is set out for companies established in UAE-free zones. These zones:

Maintain sufficient substance and

Earn qualifying income.

What exactly is a sufficient income will be defined by a Cabinet decision. The Public Consultation Document could refer to the requirement to not do business with the mainland UAE. It is stated that Free Zone businesses can choose to be taxed as a corporation at a rate of 9 percent.

The extensive UAE rules for sourcing are in force and essential for the Free zone companies seeking to comply with the substance requirements.

Withholding Tax

There is a possibility of a zero-withholding tax on specific categories in the UAE State Sourced income produced by a non-resident. In turn, foreign investors who do not conduct any activities in the UAE won’t be taxed within the UAE.

Foreign Entities

Foreign entities can be considered residents in the UAE if they are managed and controlled by the UAE. In the case of foreign companies that aren’t recognized as residents of the UAE and who possess a permanent establishment in the UAE, The Definitions of Permanent Establishment have been clarified as fixed PE as well as the term “agency PE. Further details on PEs will be subject to a Ministerial decision.

Exempt Entities

The UAE Corporate Tax Law has retained the exemption for Investment Managers of the Public Consultation Document. Specific rules apply to Partnerships as well, as Family Foundations can also use to increase tax transparency 

Government entities and government-controlled entities as well as qualifying public benefit entities and qualifying investment funds will be exempt from the UAE Corporate Tax Law.

Extractive companies (upstream oil and gas companies) are exempt if they earn revenue from the extraction business.

Bank operations will be restricted to Corporate Tax in UAE (unless your institution operates in a Free Zone and is eligible for the zero-interest rate).

Implementation Date

Article 69 of the UAE Corporate Tax Law provides that the Law applies to Tax Periods that begin on or after June 1, 2023.

Companies with a fiscal year that begins on January 1 are subject to CIT beginning 1. January 2024.

Financial records & Requirement to Maintain Audited Statements

Taxpayers must prepare and maintain financial statements backed by all records and documents to support UAE Corporate Tax returns. The forms should be kept for a minimum of seven years.

That will apply to every UAE entity (unless included in the Corporate Tax Group). Every entity must make separate financial statements. However, all entities will not be audited for financial information. Subsequent Cabinet Decision(s) will outline the tax-paying categories required to keep audited or certified accounts.

Small Business Tax Relief

The possibility of relief for small-sized businesses with gross or revenue less than the threshold of a specific amount is made. Qualifying businesses will be considered not to have tax-deductible income and must comply with a simplified set of requirements.

Revenues and not tax-deductible income determine the threshold. It is likely to be confirmed by an upcoming Cabinet Decision.

Deductible / Non-Deductible Expenses

The expenses incurred solely and exclusively to serve business needs (and which are not to be capitalized) can be deducted.

Deductions are not allowed for expenditures incurred to generate tax-free income. Deductibility is only permitted in the case of any price with a mixed purpose. Interest expense is deductible subject to a maximum of 30% of EBITDA.

Financial assistance rules have been implemented to prevent businesses from getting funding to pay dividends or distribute profits.

Entertainment costs are limited to 50 percent.

Non-deductible expenses include contributions to a non-qualifying Public Benefit Entity and bribes, fines, and dividends.

Importantly, amounts taken from the business by an individual who is a tax-deductible individual are not deductible.

Exempt Income & Relief

 The following income categories are exempt from Corporate Tax in UAE (Article 22 of the UAE Corporate Tax Law):

Capital Gains and Dividends, and other profits distributions     from a Resident

Capital Gains or Dividends, as well as other profits distributions     from Qualifying shareholding in a legal entity of a foreign country with a     holding time of 12 months and a minimum contribution of 5 percent, and at     an absolute minimum of 9 percent CIT for the source country. From which     they originate.

The income from a foreign PE is subject to the conditions     & an option to use an exemption (rather than credit)

The income earned by an individual, not a country resident,     comes from the operation of ships or aircraft involved in international     transport.

These transactions can be subjected to a specific reduction, i.e., it is essentially an exemption from taxation:

Restructurings and intragroup transactions that qualify as     qualifying entities are eligible when they hold 75 percent common ownership

Restructuring of businesses is a relief from the government     with specific conditions.

Transfer Pricing

Related parties’ transactions should be carried out under the arm’s-length arms-length principle outlined in Section 34 of the UAE Corporate Tax Law. It also states that the five standard OECD transfer pricing techniques are suitable to help support the arm’s-length arms-length nature of arrangements with related parties and allow alternative methods if needed.

Article 34 states that should there be an adjustment by a tax authority from a foreign country that affects a UAE entity, the application must be submitted to the FTA to request a similar adjustment that allows the UAE firm to be exempt against double taxation. The resulting adjustments relating to domestic transactions do not require an application.

The requirements for documentation on transfer pricing are covered by Article 55. UAE businesses must follow the transfer pricing regulations and the documentation requirements set by references to the Transfer Price Guidelines.

These lead to three-tier reports, i.e., master file, local file, and country-by-country reporting. The connection to a controlled transactions disclosure form is provided (details of which are to be determined).

It is important to note that no thresholds of materiality are provided. Separate legislation will be announced shortly. Advance pricing plans will become made available via the normal clarification process currently in place.

UAE has introduced provisions requiring the payment and benefits given to persons connected to be tax-deductible in the market value. The same rules are followed in section 34 of UAE CIT Law for applying this principle.

Administration & Enforcement

The MoF is the sole authority for multilateral or bilateral     agreements and the exchange of information between countries.

The FTA is responsible for the corporate tax system’s     administration, collection, and application. The Tax Procedures Law sets     fines and penalties.

Companies will require an FTA VAT     Registration UAE.

Companies affected by Corporate Tax in UAE must submit a CT     report electronically for each period of financial activity within nine     months from the close of that Financial Period. (A financial period     generally refers to any financial period that is 12 months long)

Free Zone companies that are which are subject to CIT at 0     percent CIT must also submit a Corporate Tax Return.

Foreign Tax Credits

Tax credits for foreign taxation are allowed for UAE corporate tax due as per the Public Consultation Document. Businesses are entitled to claim the lesser amount of corporate tax due and the sum of withholding tax that is effectively taken out. There is no carrying forward. There will be no credit for taxes paid to an individual Emirate.

Tax Grouping

Fiscal unity or Tax Group: UAE companies can create a “fiscal unity” or Tax Group to serve UAE purposes. The primary requirement for the formation of a Tax Group is to comply with an (in)direct minimum shareholding of 95 percent.

Free zone entities subject to zero percentage shareholding are not eligible to join the Tax Group. Furthermore, the parent (which may be intermediate) is required to be a UAE company.

Losses 

By article 37 of the UAE Corporate Tax Law, losses can be carried forward for up 75 percent of taxable income. Losses can be transferred between members of the same group of corporations if they are 75 percent direct or indirectly owned. Losses cannot be transferred from exempt people or entities in the free zone. The loss offset is subject to the cap of 75 when it comes to businesses that roll forward losses.

Tax-deductible losses may be lost in the event of an ownership change (50 percent or more); however, the new owner is operating the same or similar business. The requirements to be considered for this have been established.

Anti-Abuse

UAE will implement an Anti-Abuse General Rule known as “GAAR”. The GAAR applies to cases where one of the principal reasons for a transaction is to gain an advantage in taxation for corporations that is not in line with the intent, intent, or purpose of UAE Corporate Tax Law.

The FTA will be able to address and adjust or counteract the transaction. The GAAR only applies to arrangements or transactions made after the UAE Corporate Tax Law is published in the UAE Official Gazette on October 10, 2022, in issue #737.

Summary

The publication of UAE Corporate Tax Law and confirmation of a rate of 9 The UAE have established a global affordable Corporate Tax rate and confirmed their intention to implement Corporate Tax in June 2023.

The information to be released in the next few months will be fleshed out and provide a greater understanding of the implementation process. Nevertheless, several key elements are already confirmed, including introducing compulsory transfer pricing rules.

[simplysolvedagency]

Federal Corporate Tax in UAE – Published Official CT Legislation

In the wake of the public announcement regarding the benefits of Corporate Tax in UAE (CT) and the frequently asked questions (FAQs) on January 31, 2022, as well as the publication of the Public Consultation Document in April 2022, the Federal Decree-Law no. 47 of 2022 regarding the Taxation of Corporations and Businesses Corporate Tax Law has been released on December 9, 2022.

The UAE Corporate Tax Law is Federal Decree-Law No. 47 of 2022, issued on October 3, 2022, and becomes effective 15 days following its announcement in the Official Gazette. The Corporate Tax law applies to the profits of businesses for fiscal years that begin on or after June 1, 2023.

This article gives brief highlights of the new rules, which were it was announced by The Ministry of Finance (“MoF”) and the Federal Tax Authority (“FTA”). It is important to note that the new rules align with the Public Consultation Document.

More details are awaiting Cabinet and Tax Authority Decisions, and further guidelines are expected to be issued to finalize all Corporate Tax Legislation in areas such as the Free Zone and Director compensation guidelines. Following the publication of Corporate Tax Legislation, the MoF has confirmed that its introduction is scheduled for June 2023.

Scope of Corporate Tax in UAE

Corporate Tax in UAE applies to the adjusted net profit of the worldwide accounting of the company.

The Corporate Tax in UAE Regime has two rates of different types:

A tax-free rate applies to tax-deductible earnings up to a     certain amount that is to be set in a Cabinet Decision (the FAQs relate to the threshold of AED 375,000)

The tax standard for the statutory rate is 9 percent.

Confirming the minimal tax burden of just 9% aims to ensure that the UAE has a competitive tax rate worldwide.

The Corporate Tax Law is silent in Article 3 on aspects governing the global minimum of 15% tax rate. That applies to MNEs that fall within the definition of Pillar Two, which is part of BEPS Pillar 2. OECD BEPS project and applies to multinational corporations (MNCs) that have consolidated worldwide revenues exceeding EUR 750 million (c. the equivalent of AED 3.15 billion) at any time in two of the last four years. The FAQs address the possibility of adopting within the UAE of BEPS Pillar 2.

Individuals:

Individuals are affected by corporate taxation if they engage in business activities that are in line with an overall VAT concept for business activities. A Cabinet decision is anticipated regarding how to apply Corporate Tax in UAE to natural people. That means that Corporate Tax does not apply to a person’s salary and other earnings earned through employment. However, those earning income through part of a business venture would be covered by Corporate Tax in UAE.

Free Zones

A specific and defined regime (subject to a further Cabinet decision) is provided for all businesses in UAE-free zones. These zones:

Maintain sufficient substance and

Earn qualifying income.

What is a sufficient income will be defined by a Cabinet decision. According to the Public Consultation Document, this could refer to the requirement not to do Business with the mainland UAE. It is stated that Free Zone companies can choose to be taxed as a corporation at a rate of 9 percent.

A wide range of UAE rules for sourcing is in force and essential for businesses in the Free zone who want to satisfy the requirements of substance.

Withholding Tax

There will be no withholding tax on specific categories of UAE State Sourced income produced by a non-resident. In turn, foreign investors who don’t carry any businesses in the UAE, in general, will not be taxed within the UAE.

Foreign Entities

Foreign entities can be residents of the UAE if they are operated and controlled in the UAE. Foreign entities who aren’t considered to be residents in the UAE, however, may have a permanent establishment in the UAE. The Definitions of Permanent Establishment have been clarified as fixed PE and the term “agency PE. Further details on PEs will be subject to a Ministerial decision.

Exempt Entities

The UAE Corporate Tax Law retains the exemption for Investment Managers exempted from Public Consultation Documents. Rules apply to Partnerships, and Family Foundations can also use to increase tax transparency.

Government entities and government-controlled entities, as well as qualifying public benefit entities and investment funds, will be exempt from the UAE Corporate Tax Law. Extractive companies (upstream oil and gas companies) are exempt if they earn revenue from their extractive businesses.

Banking operations are affected by Corporate Tax in UAE (unless an institution falls located in a Free Zone and is eligible for the zero-interest rate).

Implementation Date

Article 69 of the UAE Corporate Tax Law provides that the Law will apply to Tax Periods that begin on or after June 1, 2023.

Businesses with a financial year that begins on January 1 are subject to CIT starting on January 1, 2024.

Financial records & Requirement to Maintain Audited Statements

Taxpayers must create and keep financial statements backed by all records and documents to support Corporate tax returns. The forms must be kept for a minimum of seven years.

This obligation will apply to every UAE entity (unless included in the Corporate Tax Group).

Every entity must create its financial statements. However, only some entities may be audited for financial information. A subsequent Cabinet Decision(s) will define the types of tax-paying individuals that must keep certified or audited accounting statements.

Small Business Tax Relief

Reliefs for small-scale businesses with revenues or gross income below the threshold of a specific amount are made. Qualifying businesses will be considered to have no tax-deductible income and must comply with a simplified set of requirements.

The threshold is determined by the revenue, not the earnings or taxable income. That is likely to be confirmed by an upcoming Cabinet Decision.

Deductible / Non-Deductible Expenses

The expenses incurred solely and exclusively for business reasons (and which are not to be capitalized) can be deducted.

Deductions are not allowed when expenses are incurred to earn tax-free income. In the case of any expenditure with a mixed purpose, removal is not permitted. Interest expense is deductible subject to a limit of 30% of EBITDA.

Financial assistance rules are in effect and prevent companies from getting funding to pay dividends or distribute profits.

Entertainment costs are set at 50 percent.

Donations not tax-deductible include those made to a non-Qualifying Public Benefit Entity and bribes, fines, and dividends.

Notably, the amounts withdrawn from the Business by any natural person who is a tax-deductible individual are not deductible.

Exempt Income & Relief

The following income categories will be exempted from Corporate Tax in UAE (Article 22 of the UAE Corporate Tax Law):

Capital Gains and Dividends, and other distributions of     profits from a Resident

Capital Gains such as dividends, capital gains, and other     distributions from Qualifying shareholding in a legal entity of a foreign     country that is subject to a hold duration of 12 months, the minimum     contribution of 5 percent, and at the minimum, subject to 9 percent CIT     for the source country. From which they originate.

The income from a foreign PE is subject to certain conditions     and the option to apply an exemption (rather than credit)

Earnings of an individual who is not a resident of the     country come from operating ships or aircraft involved in international     transport.

These transactions can be subjected to a specific reduction, i.e., effectively an exemption from taxation:

Restructurings and intragroup transactions that qualify as     qualifying Entities will be eligible when they hold 75 percent common     ownership.

Restructuring relief for businesses under specific conditions.

Transfer Pricing

Related party’s transactions should be carried out under the arm’s-length principle as outlined in Section 34 under the UAE Corporate Tax Law. In addition, it states that the five conventional OECD Transfer Pricing strategies are suitable to help support the arm’s length character of arrangements with related parties and allows the use of alternative methods when needed.

Article 34 provides that when a tax authority adjusts to a foreign country that affects the tax structure of a UAE entity, the application must be submitted to the FTA to request a similar adjustment that allows the UAE firm to be exempt against double taxation. Any adjustments that result from domestic transactions do not require an application.

The requirements for documentation on transfer pricing are covered in Article 55. UAE businesses will have to follow the rules for transfer pricing and the documentation requirements set by OECD Transfer Price Guidelines, which lead to three-tier reports, i.e., master file, local file, and country-by-country reporting. A reference to a controlled transaction disclosure form is provided (details of which are still to be determined).

It should be noted that no thresholds for the materiality of the product are provided. Separate legislation will be released later. Advance pricing plans will become made available via the normal clarification process currently in place.

UAE has introduced provisions requiring the payment and benefits given to persons connected to be tax-deductible in their market value. The same rules are followed in Article 34 of the UAE CIT Law.

Administration & Enforcement

The MoF is the sole authority for purposes of multilateral     bilateral or multilateral agreements as well as for the exchange of     information between countries.

The FTA is accountable for the corporate tax system’s     administration, collection, and application. Fines and penalties are governed     under a law known as the Tax Procedures Law.

Companies will require a VAT Registration UAE from     the FTA.

Companies that are required to comply with UAE Corporate Tax     are required to submit the Corporate Tax return online for every financial     year within nine months from the date of the end of that Financial Period.     (A financial period generally refers to any financial period that is 12     months long)

Free Zone companies that are subject to CIT at 0 percent CIT     must also submit a CT Return.

Foreign Tax Credits

Tax credits for foreign taxation are allowed for Corporate Tax in UAE due as per the Public Consultation Document. Businesses can claim less corporate tax owing and the sum of tax withholding effectively removed. There is no way to carry forward. There will be no credit for taxes paid to the individual Emirate.

Tax Grouping

Fiscal unity or Tax Group: UAE companies can form a “fiscal unity” or Tax Group to serve UAE purposes. The main requirement for a Tax Group is to comply with the (in)direct sharing requirement, which is 95 percent. Free zone entities subject to zero percent cannot join the Tax Group. Additionally, the parent (which may be intermediate) must be a UAE company.

Losses

By article 37 of the UAE Corporate Tax Law, losses can be carried forward for up 75 percent of taxable income. Losses can be transferred between members of the same group of corporations if those entities have 75 percent direct or indirectly owned. Losses cannot be transferred from exempt individuals or entities that are free zone. Loss offsets are also subject to the cap of 75 for businesses that roll forward losses.

Tax-deductible losses may be lost in the event of an ownership change (50 percent or more) if the new owner runs the same or similar Business. The criteria to be considered for this have been established.

Anti-Abuse

UAE will adopt an Anti-Abuse General Rule, also known as “GAAR.” The GAAR applies to cases where one of the primary reasons for a transaction is to gain an income tax benefit for the corporation that is incompatible with the purpose or intent of the UAE Corporate Tax Law.

The FTA will deal with and alter or counteract the transaction. The GAAR only applies to agreements or transactions entered after the UAE Corporate Tax Law is published in the UAE Official Gazette on October 10, 2022, in issue #737.

Summary

With the publication of the UAE Corporate Tax Law and confirmation of a 9% tax rate and a 9% rate, UAE has established a globally competitive rate for Corporate Tax in UAE and confirmed its intention to implement Corporate Tax in June 2023.

It is expected that additional information to be released over the coming months to be fleshed out and provide more excellent knowledge of its implementation. Nevertheless, several key elements are already confirmed, including introducing compulsory transfer pricing rules.

[cyypress]

hey yeah so as a few people have pointed out you are comparing the minimum wage to the average rent which is super disingenuous.

also according to forbes the average annual salary nationwide is $59,428. that’s a monthly take-home of about $4,950. they have average rent at $1,372. and yes the general rule of thumb is that your rent should be 30% of your monthly income, which means that the average rent is actually below the threshold (30% of $4,950 is $1,485, which is 27%)

this person made a great point:

so let’s look at the lower end in our states with the lowest income:

the minimum wage rates are $7.25 for MS, $11 in AR, and $8.75 in WV. if we look at the low end for these states we have the following rents for studio apartments; $640, $581, and $621 respectively (per rentdata.org). this would be 14-17% of monthly income, which is super low.

ALL of this data is assuming someone works full time, which is a huge assumption as i'm pretty sure only a third of americans work full time (and only a third of americans rent). unfortunately due to the housing market being booty, it's currently cheaper to rent than to buy a home.

let's be pessimistic in every regard and say that renters on both ends of the spectrum are spending 50% of their income on rent. this is obviously not ideal but WHY is rent so high? the simple answer is because there are people who are able to pay it. supply and demand, baby. people in my age group (gen Z and millennials) don't need houses, so we stick with apartments, even though historically renting was more expensive than owning a home in the long run; you are basically throwing money away as opposed to investing in something you can sell at a later time. there are more renters than there are rental units, which decreases the demand for houses, which in turn increases the price. so if someone were looking to rent a house, that is going to be a crazy number because of inflation. maintenance, mortgages, repairs, and taxes are all up for homeowners and landlords. not to mention LLs got fucked by covid eviction moratoriums. they are still making up for that. even if they wanted to be super generous and charge lower rents, they will be fucked in 6 months and either be forced to raise the rent or be bought out by someone who understands math.

yeah, i don’t have a closing statement or anything. sincerely, take an entry-level economics class.

sauce: [x] [x] [x] [x]

[sravani12345]

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