What are the UAE Corporate Tax record-keeping requirements for 2026?

Under Federal Decree-Law No. 47 and Article 52 of the Tax Procedures Law, taxable persons must maintain records for 7 years. Arakan Protocol ensures these records remain in-situ within the UAE digital perimeter to satisfy data residency mandates.

How does Pillar Two affect multinational groups in the UAE?

Pillar Two introduces a 15% global minimum tax for MNE groups with revenues exceeding EUR 750 million. Arakan provides automated GloBE substantiation and jurisdictional nexus mapping to manage top-up tax liabilities.

What is the 0% Qualifying Free Zone Person (QFZP) status?

A QFZP is a Free Zone entity that maintains adequate substance in the UAE and derives Qualifying Income. Failure to demonstrate Core Income Generating Activities (CIGA) can result in a retroactive 9% tax liability.

What happens if I miss a WPS salary deadline?

If salaries are not paid within 15 days of the due date, MoHRE triggers an automated 'System Block.' This prevents the company from issuing new work permits or renewing existing visas until the compliance gap is rectified.

Are unlimited contracts still valid in 2026?

No. Under Decree-Law No. 33, all employees must be transitioned to standardized fixed-term contracts. Unlimited contracts are no longer recognized in labor disputes.

How does the 'Savings Scheme' differ from traditional gratuity?

Traditional gratuity is a lump-sum payment due at the end of service. The Savings Scheme allows employers to pay smaller, manageable monthly contributions into an investment fund, shifting the liability from a future debt to a current operating expense.

Section I

Employment & MoHRE Compliance

Advanced Level

How to Ensure WPS 2.0 Compliance

Register with an Authorized SIF File Provider

Coordinate with your bank or exchange house to ensure your payroll system generates Salary Information Files (SIF) in the required digital format.

Validate Salary Breakdown

Ensure the SIF file clearly distinguishes between Basic Salary and allowances, as the system monitors the 50% basic salary threshold for gratuity calculations.

Execute Transfer Before the 15th

Initiate salary transfers through the WPS portal at least 3-5 days before the deadline to account for bank processing times and avoid automated blocks.

Official References

5.1 The Unified Fixed-Term Contract Mandate

Under Federal Decree-Law No. 33, the UAE has abolished unlimited contracts in favor of standardized fixed-term agreements. By 2026, all private-sector employees must be on these unified contracts, which carry specific provisions for termination notice periods (capped at 90 days) and non-compete clauses. Non-compete enforcement is now strictly regulated; it must be limited in time, geographical scope, and type of work to be legally binding. Employers must ensure that every contract is digitally signed and registered through the MoHRE system to be recognized in labor disputes or at the MOHRE's Twa-fouq centers.

5.2 WPS 2.0: Automated Salary Monitoring & Penalties

The Wage Protection System (WPS) is the digital backbone of UAE labor compliance. In 2026, the system monitors not just the payment of the 'Basic Salary' but also the timeliness of payments. Salaries must be transferred via authorized banks or exchange houses within 15 days of the due date. Failure to comply triggers a 'System Block'—an automated restriction that prevents a company from renewing existing visas or issuing new work permits. For SMEs, persistent non-compliance leads to escalating fines starting at AED 1,000 per employee, and potentially public listing on the MoHRE's non-compliance database.

5.3 Gratuity & The Voluntary Alternative Pension Scheme

While traditional End-of-Service Gratuity (ESG) remains the default, 2026 sees wider adoption of the 'Savings Scheme'—a voluntary alternative to the traditional lump-sum gratuity. Employers can opt to pay monthly contributions into an investment fund managed by accredited providers (such as DIFC's DEWS model). This shifts the liability from a future lump sum on the balance sheet to a manageable monthly operating expense. Businesses must forensicially calculate ESG based on the 'Last Basic Salary' and ensure these provisions are accurately reflected in their Corporate Tax 'Taxable Income' reconciliation to avoid double-counting liabilities.