Dubai Enhances its Crypto Friendly Reputation
Stuart Stobie • September 5, 2024
Dubai Enhances its Crypto Friendly Reputation
In a significant legal development in the UAE, the Dubai Court of First Instance has set a precedent in 2024 by officially recognising the payment of salaries in cryptocurrency under employment contracts. This landmark ruling, issued in case number 1739 of 2024 (Labour), represents a departure from a 2023 decision by the same court. In the earlier case, the court had rejected a similar claim involving cryptocurrency due to the employee's inability to provide an accurate valuation of the digital currency.
Does this mean that receiving our wages in crypto is our future?
Background of the Case
The case at hand involved an employee who filed a lawsuit seeking unpaid wages, compensation for wrongful termination, and other employment-related benefits. The employment contract specified a monthly salary in fiat currency, along with an additional payment of 5,250 EcoWatt tokens, a form of cryptocurrency. The conflict arose when the employer failed to deliver the EcoWatt token portion of the salary for six months and allegedly wrongfully terminated the employee.
What makes the court’s ruling particularly noteworthy is its recognition of cryptocurrency as a valid form of payment, despite the traditional reliance on fiat currency in employment contracts.
The 2023 Judgment
In a related case from 2023 (Judgment No. 6947 of 2023), the court had previously addressed an employment dispute where a portion of the employee’s remuneration was to be paid in EcoWatt tokens. Although the court acknowledged the inclusion of these tokens in the employment contract, it ultimately declined to award the cryptocurrency amount. The court's refusal was based on the employee's failure to provide a clear method for converting the cryptocurrency's value into fiat currency. This decision highlighted the court's cautious approach, emphasising the importance of precise and concrete evidence when dealing with non-traditional payment methods like digital currencies.
This statement from the 2023 judgment highlighted the court’s conventional approach, emphasising the need for concrete evidence of a digital currency’s value before such a claim could be enforced.
The 2024 Judgment
In a marked shift from its earlier stance, the Dubai Court took a more progressive approach in its 2024 judgment. Once again, the case involved an employment dispute over remuneration in EcoWatt tokens. However, this time, the court ruled in favour of the employee, not only acknowledging the legitimacy of cryptocurrency payments but also ordering that the payment be made in EcoWatt tokens rather than converting them to fiat currency.
The court's 2024 decision was based on the principle that wages are a fundamental right of the employee for work rendered.
This ruling marks a significant shift in the court’s approach, signalling a growing acceptance of cryptocurrency as a legitimate and enforceable form of payment. It underscores the importance of honouring contractual agreements, as long as they are clear, mutually agreed upon, and compliant with public policy and law.
Implications
The court’s reference to Article 912 of the UAE Civil Transactions Law and the Federal Decree-Law No. (33) of 2021 in both the 2023 and 2024 rulings reflects a consistent application of legal principles concerning the determination and payment of wages. However, the interpretation of these laws evolved between the two judgments, indicating a broader acceptance and integration of digital currencies within the UAE’s legal and economic landscape.
Conclusion
The Dubai Court’s 2024 ruling exemplifies the UAE’s progressive legal environment and the increasing mainstream acceptance of cryptocurrency. The court’s decision to enforce cryptocurrency payments as specified in employment contracts sets a forward-looking precedent that could pave the way for broader adoption of digital currencies across various sectors, beyond just employment.
If you’ve missed your Corporate Tax registration deadline or already paid the AED 10,000 fine, there’s now a golden opportunity to waive or reclaim that penalty — but only if you act quickly. In a recent move to support businesses during the first year of the UAE’s Corporate Tax rollout, the Federal Tax Authority (FTA) has announced a limited-time grace period. The initiative allows eligible businesses to apply for a full penalty waiver if they file their Corporate Tax return early. This is a major relief for thousands of companies who have either: Missed their Corporate Tax registration deadline, or Registered late and were hit with the AED 10,000 fine Why is this happening? According to Gulf News, this initiative is part of a broader effort by the Ministry of Finance and the FTA to ease the transition into the new Corporate Tax system and promote long-term compliance. What You Need to Know: Deadline for the waiver: July 31, 2025 BUT: You must file your return well ahead of your official tax deadline to qualify. Don’t wait – gathering your financial records and preparing your tax return can take time. For most businesses operating on a calendar year basis (Jan–Dec), that means filing within the next couple of months. Who qualifies for the penalty waiver? If you’re asking: “Can I get a refund on my Corporate Tax late registration fine in the UAE?” “Is it possible to waive the AED 10,000 Corporate Tax penalty?” “How do I apply for the UAE Corporate Tax penalty relief?” Then the answer is – yes, you may be eligible. But there’s a catch: you must file your tax return early, ahead of your normal deadline. This is not automatic, and if you miss the window, the fine will not be waived or refunded. Why early filing matters: The FTA has made it clear: early compliance is the only route to relief. This means: Completing your Corporate Tax registration (if not already done) Preparing your financials for your first tax year Submitting your Corporate Tax return well before the deadline This one-time waiver won’t be repeated – so don’t leave it until the last minute. How Mosaic Chambers Group can help: At Mosaic Chambers Group, our FTA-certified tax advisors and legal consultants are ready to guide you through the entire process. Whether you need help: Understanding your eligibility Filing your Corporate Tax return early Claiming your AED 10,000 fine refund Or ensuring future tax compliance We’re here to take the stress out of Corporate Tax. Book a free consultation today and get expert support from our team. Click here to get in touch or below to book your call.
April 6th, 2025 marks the beginning of a major shift in UK taxation. Labour’s new tax reforms have officially scrapped the long-standing non-domiciled (non-dom) tax status — a move that targets wealthy individuals who live in the UK but, under the new non dom regime, have been able to mitigate UK tax on their overseas income and gains. This change spells the end of a tax break that attracted many high-net-worth individuals (HNWIs) to the UK and is already causing ripples across the country’s elite financial circles. The message is clear: if you live here, you pay here. Let's break down what has changed. What Was the Non-Dom Tax Regime? The non-dom tax regime allowed individuals residing in the UK, who claimed their primary home (domicile) to be outside the UK, to avoid UK income and capital gains taxes by not bringing any foreign earnings or gains back into the UK. This system made the UK an attractive location for individuals with international earnings. We covered this in more detail here. What Has Changed? Since 2025-26 tax year, the government has implemented several significant reforms. These reforms include: 1. End of Non-Dom Status All UK tax residents will now owe UK income tax on all global income and gains, regardless of whether these were brought into the country or not. 2. Inheritance Tax (IHT) on Foreign Assets Non-doms could previously avoid UK Inheritance Tax on assets they held outside the UK; now individuals who have lived here for more than four years will be liable for IHT on all their global estate assets. 3. Temporary Reliefs To assist the transition, temporary measures include the following: Tax Year 2025-26 will see a 50% reduction on foreign income tax. Capital Gains Tax (CGT) laws allow us to rebase overseas assets based on their value as of April 2019 for CGT purposes. Temporarily, bringing money from abroad may not incur full tax charges upon entering the UK. Why Has the Government Made These Changes? According to Labour, eliminating non-dom status will provide many advantages: Enhance tax fairness Raise extra funds to support public services Close longstanding loopholes used by the wealthy Rising Tax Bills HNWIs with overseas assets and income will now face significantly increased tax obligations that may have an effect on personal finances, family planning and wealth transference. Making Decisions About Moving Abroad Some individuals are already leaving the UK in order to settle in countries with more advantageous tax regimes. Some common destinations for relocation include: United Arab Emirates (UAE) does not levy income or capital gains tax Switzerland provides fixed annual tax arrangements for its most wealthy citizens Italy - flat tax of EUR100,000.000 on foreign income for new residents Monaco does not levy personal income tax for residents Concerns Raised About Impact Within Industry Concerns are being expressed that this could lead to a decrease in: Investment into UK businesses Jobs funded by private wealth Donations to UK Charities What About Entrepreneurs? Many entrepreneurs utilise non-dom status to reduce tax on international business earnings, however, these changes could require: Establishing headquarters or structures outside the UK Reconsider ownership of intellectual property or company shares An investigation of how profits and dividends are managed is important to ensure long-term growth. What Should Be Done Now? If you or those you work with have been affected, taking immediate steps is key to their safety. Here are a few things you can do. 1. Consult With A Specialist Tax Advisor Every situation varies. Seek tailored guidance from someone familiar with both UK and international tax regulations. 2. Evaluate Your Financial Structures Evaluate how you hold assets - for instance through offshore companies or trusts. Any necessary changes must be implemented for optimal efficiency and compliance purposes. 3. Consider Relocating If the UK's new tax rules no longer suit, you might wish to explore living elsewhere where tax liabilities would be lower. Be sure to carefully consider all legal, financial, and family aspects prior to making any decisions. Summary The changes to the non-dom tax regime mark a profound transformation for those who rely on global income and wealth for tax payments, especially those living abroad. Although intended to increase fairness, these reforms also pose challenges to those accustomed to using it. Now is the time to review your plans, secure your assets, and seek professional guidance. How Can We Assist? At our offices in both the UK and UAE, we assist individuals, entrepreneurs and professional advisors in making well-informed decisions. If you have any queries about this article or need advice then get in touch.