Latest news with #MinisterialDecision
Time of India
2 days ago
- Business
- Time of India
Private sector workers in Oman now entitled to mandatory annual performance-based bonuses
New mandate: Minimum annual performance-based periodic allowances for Omani employees in the private sector/Representative Image TL;DR: Oman's Ministry of Labour has issued Ministerial Decision No. 317/2025 , mandating minimum annual performance-based periodic allowances for Omani employees in the private sector. Effective January 1 annually, eligibility requires at least six months' service and performance rated 'Acceptable' or above. Bonus rates: 5% of basic salary for 'Excellent', 4% for 'Very Good', 3% for 'Good', and 2% for 'Acceptable'. No bonus for 'Poor'. Employers may reduce or suspend bonuses with valid economic justification or disciplinary proceedings approved by the Ministry's committee. In a landmark labour reform, Oman's Ministry of Labour issued Ministerial Decision No. 317/2025, establishing a performance-based minimum annual bonus for Omani nationals employed in the private sector. The regulation aims to enhance worker rights and standardize annual bonuses according to job performance. From January 1, 2026, eligible Omani employees will receive mandatory allowances tied to their performance ratings, from 'Acceptable' up to 'Excellent' ensuring transparent and equitable bonus entitlements. What the Regulation Covers Eligibility Criteria To qualify for the annual periodic allowance, employees must: Be Omani nationals working in the private sector. Have completed a minimum of six months of service at the same employer. Obtain a performance rating of 'Acceptable' or higher in the annual review. Ratings deemed 'Poor' disqualify eligibility. Bonus Structure Based on performance, the minimum allowance of the basic salary, effective every January 1, is as follows: Excellent: 5% Very Good: 4% Good: 3% Acceptable : 2% No bonus is awarded for a 'Poor' rating. These baseline rates are binding unless superior employer benefits exist. Reduction, Suspension & Grievance Mechanisms Employers may reduce or suspend bonuses only under specific circumstances: Economic justification : Must be supported by a committee review as per Oman's Labour Law. Disciplinary investigations : If an employee is under investigation for misconduct. If later cleared, the bonus must be paid in full. Extended unpaid leave : Absences exceeding six months negate eligibility for that year's bonus. Once resolved, payment must resume. Employees are entitled to file grievances if they dispute their performance rating, through designated Ministry channels. The ministry has mandated that violations such as failure to pay due allowances, carry an administrative fine of OMR 50 per affected employee. This serves as a deterrent and ensures compliance across employers. Why It Matters Strengthens Worker Rights : Guarantees a baseline bonus for Omani employees, regardless of individual employer discretion. Aligns with Vision 2040 Work Reforms : Supports Omanisation goals and enhances private sector attractiveness for nationals. Standardizes Award Mechanisms : Reduces ambiguity and variability in annual discretionary bonus schemes. Supports Wage Transparency : Clarifies employer obligations in fostering fair performance-based compensation. Ministerial Decision No. 317/2025 marks a significant advance in Oman's labour reform journey, introducing mandatory, performance-based periodic allowances for Omani nationals in the private sector. With enforced timelines, clear bonus tiers by performance ratings, and mechanisms for dispute resolution, the regulation provides both predictability for employers and a structured recognition system for employee contributions. By bridging employment rights and national economic strategy, Oman further cements its commitment to fair work and inclusive growth. FAQ 1. Who is eligible for the periodic allowance? Only Omani nationals working in the private sector who have completed at least six months of continuous service and received a performance rating of 'Acceptable' or higher are eligible. 2. What is the bonus amount based on performance? The minimum annual bonus, calculated on basic salary, is: 5% for Excellent 4% for Very Good 3% for Good 2% for Acceptable. No bonus is granted for a 'Poor' rating. 3. Can an employer skip the allowance due to poor company finances? Yes, but only with official approval from the Ministry's committee, citing valid economic reasons as per the Labour Law. 4. What happens if an employee is on long unpaid leave? If the employee is on unpaid leave exceeding six months, the employer is not required to pay the bonus for that year. The payment resumes once the leave ends. 5. What is the penalty for non-compliant employers? Employers who fail to pay the required bonus may face a fine of OMR 50 per affected employee.
Muscat Daily
2 days ago
- Business
- Muscat Daily
Performance-based increment for Omani workers in private sector
Muscat – Omani workers in the private sector will now be entitled to a performance-based periodic increment every January under new regulations issued by Ministry of Labour. Ministerial Decision No 317/ 2025, published in the Official Gazette (Issue 1606), sets out the minimum increment and conditions for disbursement. The regulation replaces Ministerial Decision No 541/2013 and comes into effect the day after publication. Under the new rules, an Omani worker must have completed at least six months of service at an establishment to qualify. The appraisal will be determined based on performance, with minimum increment of 5% of the basic for an 'Excellent' appraisal, 4% for 'Very Good', 3% for 'Good', 2% for 'Acceptable' and none for a 'Weak' rating. Workers have the right to appeal their appraisal results to the competent department at Ministry of Labour. In cases where a worker changes jobs within the year, the establishment where they spent the longer duration will be responsible for issuing the performance appraisal, while the new employer will be required to pay the allowance. The decision also allows employers to reduce the allowance due to economic reasons, subject to approval by the committee referenced in Article 45 of the Labour Law. Employers may suspend the increment if a worker is under investigation for a workplace-related offence, or if the employee takes unpaid leave or is absent for more than six months in the year. However, increment must be paid retroactively in case of an acquittal. An administrative fine of RO50 will be imposed on any employer who violates the provisions of the decision, and the fine multiplied by the number of workers against whom the violation occurred. The decision is part of continued efforts to enhance labour market regulation and ensure fair compensation linked to performance and service duration.
Muscat Daily
3 days ago
- Business
- Muscat Daily
New rules issued for annual increment of Omani workers in private sector
By OUR CORRESPONDENT Muscat – Omani workers in the private sector will now be entitled to a performance-based periodic increment every January, under new regulations issued by the Ministry of Labour. Ministerial Decision No 317/2025, published in the Official Gazette (Issue 1606), sets out the minimum allowance rates and conditions for disbursement. The regulation replaces Ministerial Decision No 541/2013 and comes into effect the day after publication. Under the new rules, an Omani worker must have completed at least six months of service at an establishment to qualify. The allowance will be determined based on performance appraisals, with minimum increments as follows: 5% of the basic wage for an 'Excellent' appraisal 4% for 'Very Good' 3% for 'Good' 2% for 'Acceptable' No allowance for a 'Weak' rating Workers have the right to appeal their appraisal results to the competent department at the Ministry of Labour. An administrative fine of RO50 shall be imposed on any employer who violates the provisions of the decision, and the fine shall be multiplied by the number of workers in whose regard the violation occurred.
The National
6 days ago
- Business
- The National
Breaking down the new UAE corporate tax ruling on property
Two years into the UAE corporate tax universe, we continue to have changes to the law, so it is essential to keep up. Crammed within five short pages of the Ministerial Decision No. 173 of 2025 are a set of rules for treatment that demand the attention of those who have property investments. As an investment class, property can be used in different ways, particularly with how it interacts with tax and accounting. This holds true in any country due to how incentives are typically employed. Industrial, commercial and residential zones and within those categories, the level permitted within planning regulations. Planning rules are a function of the current version of an area's master plan. Where regeneration is required, rules tend to be much more relaxed. Starting with accounting treatment, we'll move on to the tax implications. The former must comply with international financial reporting standards (IFRS) to be considered in line with the various UAE regulatory authorities' laws. Some definitions to lay the ground. A depreciation charge recognises that a physical asset loses value over time, primarily from wear and tear, usage and general perceived value compared with new market offerings in the same space. The traditional approach is to declare a lifetime – say five years – and then take a charge to the profit and loss on an equal monthly basis until the original cost in financial accounts is zero. Impairment builds on this. Say you purchased a building in the Dubai International Finance District in 2009. We know there was a global recession and that property values were materially depressed. In 2025, the opposite is true. Our depreciation definition above suggests the building would be almost worthless in our financial accounts; however impairment says we must recognise the realisable value were it to be sold today. This is almost certainly much higher than the original purchase price. But surely you cannot account separately for both? The truth is that we separate the differing elements of the building. The core structure becomes a property asset and its innards, fixtures and fittings assets. The former is impaired annually and occupies a single accounting line. The latter is depreciated monthly and occupies as many lines as there are items. The UAE has relatively few mandatory annual financial reporting requirements. Large family and single-person-owned entities do not have shareholders to report to, and these make up a large part of the national economy. Hence there has been no oversight of the valuation of certain asset classes in company balance sheets. A building might never have had its fittings depreciated or an old building downwards impaired; one that is in need of demolishing and redeveloping. These buildings become purchase or whole entity takeover targets for wise corporate tax planners. Why? Until this ministerial release, if you could pay less than the accumulated write down to your net profit, you could reduce your tax bill. Years and years of unused tax credits. Article 2, section 1(a) caps the annual deductible value against corporate tax to 4 per cent of the original cost. While this closes a tax planning loophole, it raises a question I have asked before. From when does this law take effect? This is important, because it is possible that a reporting entity may have already submitted two tax returns that took full advantage of this scenario. Happily, this is dealt with in Article 7. It applies from the January 1, 2025. This will cover almost everyone. Yet, it is possible that an entity has both taken the tax benefit after this date and submitted a return. Say an entity with a March 2024 to February 2025 fiscal year, which filed in May 2025. What do they now do? The obvious answer is that they must file an amendment to their return having recalculated their final reported position. It'd be worth contacting the Federal Tax Authority for guidance, not unreasonably, as the legislation has just appeared, and confirm that they have acted in good faith, coupled with reporting in a very timely manner. There are additional exceptions that should be reviewed – groups and related parties in particular should carefully review and consider their positions, and any decisions already executed. For example, this decision does not apply to undeveloped or bare land. It applies specifically to investment properties. Would this include an entity's headquarters, and let us suppose that this is an iconic building or one in a strategic location, meaning its value is likely to rise? International Accounting Standard 40, the tape measure being used, says to me, no. Corporate lawyers, family offices and some wealthy individuals have much to reconsider here.
Time of India
21-07-2025
- Business
- Time of India
UAE's 2025 tax update: How real estate firms can save on fair-valued assets
The UAE Ministry of Finance's new rule enables depreciation of fair-valued investment properties, offering firms fresh tax planning flexibility/Representative Image TL;DR: Finance Ministry's Ministerial Decision No. 173/2025 allows firms to deduct depreciation on investment properties measured at fair value, if they choose the realisation basis, effective from tax periods starting January 1, 2025. Companies can claim depreciation up to 4% of original cost or the account's written-down value for each 12‑month period. Tax expert insights, including Aldar, highlight greater planning flexibility and equitable treatment across fair-value and historical-cost assets. The "realisation basis" election is irrevocable and introduces fresh tax planning tools, though firms must navigate 'claw‑back' provisions. Businesses in the UAE are adjusting to new tax guidelines that affect how they report the value of their property assets. The Ministry of Finance has introduced specific provisions under the Corporate Tax framework that govern how companies can depreciate property assets that are recorded at fair value, a method that reflects the current market worth of assets, rather than historical purchase prices. This change is particularly important for companies that follow International Financial Reporting Standards (IFRS), as many real estate developers, investment firms, and asset-heavy industries in the UAE do. Under the new rule, even when a property's value rises on the balance sheet due to market appreciation, the depreciation expense claimed for tax purposes will still be based on the asset's original cost, not the higher market value. Experts believe this offers clarity and prevents businesses from inflating depreciation deductions to reduce tax liabilities. According to UAE tax professionals cited in a local news outlet Al Etihad, the move is a strategic clarification aimed at aligning tax practices with international standards while safeguarding the UAE's new corporate tax system from loopholes. What the New Rule Says Who it affects : Businesses holding investment properties using fair value accounting under IFRS. Eligibility condition : Must opt for the realisation basis, meaning gains are taxed on disposal, not annual book adjustments. Depreciation cap : Up to 4% of original cost or the written-down value, prorated for partial-year holdings. Election specifics : A one-time, irrevocable choice must be made in the first 2025 tax period. Once selected, it applies uniformly across all relevant properties. Claw-back rules : The decision includes guidance on reversal triggers particularly transfers or revaluations, so companies must track annual changes meticulously. Applicability : Regardless of whether fair value assets were held before or after June 1, 2023, the corporate tax implementation date coverage begins from January 1, 2025. Context: Why This Matters Previously, firms using fair value accounting received no depreciation tax benefit, unlike those using historical cost, who could deduct depreciation expenses annually. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Beyond Text Generation: An AI Tool That Helps You Write Better Grammarly Undo As The National describes it, this was 'a significant change from prior practice,' bringing parity and compliance clarity. Gulf News explains that the rule's goal is to 'create tax fairness between firms using fair value and historical cost methods', a move widely welcomed by developers and financial leaders. Voices from the Market In Al Etihad's interview, experts emphasised the significance of Ministerial Decision 173/2025: Aldar Properties , speaking to Al Etihad, applauded the decision for enhancing 'tax neutrality and equity' and called it a 'progressive and well-calibrated step.' Aldar's finance chief notes this brings confidence for capital deployment in its Dh25.8 billion assets under management. Aurifer's founding partner, as reported in The National, explained that the rule allows firms choosing the realisation basis to claim depreciation, smoothing taxable profits and aligning tax treatment with economic reality. Practical Implications for Businesses Strategic Tax Planning Firms can now choose whether to hold properties at market or historical value, factoring in current outlay, potential long-term gains, and timing. Cashflow Benefits Depreciation deductions can improve near-term cash flow by reducing taxable income and corporate tax liabilities, especially during early years of holding. Clarity & Compliance Confidence With guidelines on claw-back events, firms can manage transitions, inter-company transfers, and development scenarios more precisely. Investor Appeal Developers like Aldar believe the reform supports investor confidence and better capital allocation in the real estate sector. Key Considerations & Risks Irrevocable election : Once chosen, companies cannot revert, requiring comprehensive internal assessments before opting in. Annual calculations : Depreciation must be tracked and documented precisely, balancing reported gains and written-down values. Claw-back vigilance : Should revaluation events occur, firms need robust systems to comply with reversal rules. Compliance timing : Businesses must make the election in their first 2025 tax period, often aligning with the calendar year, so deadlines must be prioritized. Broader Tax Landscape This decision is part of a broader pattern of refining the UAE's Corporate Tax Law (Decree-Law 47/2022), which introduced a 9% base rate starting June 1, 2023, for profits exceeding AED 375,000. As per WAM, in 2025, corporate tax registration passed 576,000 entities, indicating widespread uptake. Additional 2025 reforms included tiered excise tax on sugary beverages and clarity on energy and digital taxation, further aligning the UAE with global fiscal standards. The 2025 depreciation rule for fair-valued investment properties marks a milestone in the evolution of UAE corporate taxation. By restoring parity between reporting methods and enabling depreciation allowances, the Ministry has introduced real planning levers for firms, particularly in real estate. As various interviews in local news outlet confirms, the move is more than administrative: it reinforces the UAE's reputation for fiscal clarity, fairness, and investor-friendly regulations.
