The United Arab Emirates is set to undergo significant regulatory changes starting June 1, affecting various aspects of daily life for residents. These developments encompass salary payment regulations, taxation on parking and toll services, parking payment methods, and adjustments to the legal age of adulthood.
Timely Salary Payments Mandated
In a significant move, the UAE’s Ministry of Human Resources and Emiratisation (MOHRE) has announced that all private sector employees must receive their monthly salary by the first day of each month. This new legislation aims to ensure timely compensation for workers, with a grace period of ten days provided before administrative penalties are enforced on non-compliant establishments. The process entails the issuance of notifications and warnings from the second day of the month, followed by the application of regulatory procedures by the fifth day, and the initiation of administrative measures by the eleventh day if salaries remain unpaid.
VAT Implementation on Parking and Salik
Parking Services
Motorists will now encounter a 5% Value Added Tax (VAT) on all parking services within Dubai, as confirmed by Parkin. This tax will apply to both on-street and off-street parking, as well as seasonal cards and reservations. However, parking remains free during overnight hours from 1 am to 6 am.
Salik Tolls
Similarly, Salik, the electronic toll collection system, will also be subject to a 5% VAT. The toll rates during peak hours, from 6 am to 10 am and 4 pm to 8 pm, will now include VAT, making the cost AED 6 plus tax. Off-peak hour crossings will be taxed at AED 4 plus VAT. Toll charges remain exempt from VAT between 1 am and 6 am.
Transition to Cashless Parking Payments
In alignment with Dubai’s broader cashless strategy, the city will begin phasing out cash payments at parking meters. Motorists are encouraged to adopt a variety of cashless payment methods, such as using nol cards, the Parkin and RTA apps, SMS payment, and NFC-enabled payment cards. This transition is designed to streamline parking transactions and enhance convenience for users.
Legal Majority Age Lowered
A notable legal reform will reduce the age of legal adulthood from 21 to 18. Under the new Civil Transactions Law — Federal Decree-Law No. 25 of 2025 — individuals aged 18 and over will gain full legal capacity for civil matters. This adjustment empowers young adults to independently sign contracts, manage financial accounts, buy and sell assets, and assume civil liabilities, eliminating the previous requirement for guardian involvement until the age of 21.
These comprehensive changes reflect the UAE’s commitment to modernizing its regulatory framework, ensuring economic efficiency, and enhancing societal dynamics. Residents and businesses alike must acclimate to these new policies to navigate the evolving landscape effectively.
