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UAE FTA VAT Audits — What Can You Expect?

Under the Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures and Federal Decree Law №18 of 2022 (Amended Decree Law) amending Federal Decree Law №8 of 2017 (Decree Law) effective from January 1st, 2023, VAT returns form a legally binding statement of your tax liabilities as a self-declared assessment.

This means the preparation and accuracy is the responsibility of the taxable person and is subject to UAE FTA VAT audits to verify the accuracy of tax liabilities and compliance to the prevailing legislation.

Following the introduction of VAT in 2018, the 5-year statute of limitation results in any VAT declarations being no longer subject to any FTA VAT audits. Therefore 2023 represents the final year the FTA can trigger audits or invoke provisions under the Amended Decree Law. However, under Article 79 of the Amended Decree Law for Statute of Limitations, grants the FTA an additional four years to undertake an audit providing that it has issued a notice for audit or assessment before the expiration of the general statute of limitations of five years.

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Outsourcing Accounting Services is Best for Your Business

If you’re a business owner living in Dubai, there are various choices to handle your accounting and financial requirements. Outsourcing Accounting Services are among the most well-known. Each strategy comes with distinct advantages and disadvantages. Therefore, it is essential to evaluate your options before settling on one.

Introduction

A solid accounting and finance base is crucial to running an effective business. Accounting is essential to running a business successfully in Dubai, including accounting and bookkeeping, as well as tax compliance and planning. Two main methods to tackle these issues are outsourcing and internal auditing. In this article, we’ll discuss the differences between these two methods so that it is easier for you to choose the best option for your business.

Outsourcing Accounting Services in UAE

The option of hiring a person or company from a different company to complete your financial tasks is referred to as Outsourcing Accounting Services. As more businesses realize the benefits of hiring experienced accountants, this option is increasing in popularity in Dubai. Here are a few of the significant advantages of outsourcing accounting services

Savings: Recruiting external help can be less costly than acquiring internal employees, particularly for smaller businesses that have more money to pay a full-time accountant.

Access to knowledge: Outsourcing gives you access to a team of expert experts with years of experience who can handle any financial obligations.

Scalability Since outsourcing can be adaptable, you can alter the amount of assistance you receive as your business grows and evolves.

Flexibility: By outsourcing, you can focus on the main areas of your business while a different person handles the financial complexities.

Outsourcing However, it could have certain disadvantages to take into account, including:

Control loss If you contract out accounting services, you grant an individual control over your financial information. People who like to keep track of their financial information may be able to see an issue to be concerned about.

Communication issues: Working with a provider in an area with a different time zone may help communicate during outsourcing accounting services.

Localized Accounting Services in UAE

Hiring a part-time or full-time employee to handle your financial needs is known as accounting in-house. It has been used for some time & is highly sought-after by businesses regardless of size. There are a few advantages of accounting in-house:

Control The control over the financial data you store in the internal accounting department. That is a great thing for business owners worried about privacy and security.

It’s easier to communicate and collaborate with your accountant when he is in an office in the same building. That will help in ensuring the accuracy and up-to-dateness of your financial records.

Personalization When you’ve specific financial requirements, the in-house accountant could be tailored to your needs. That can be the most significant benefit.

Stability over the long term: Working with a permanent employee who understands the financial requirements and processes could help you get an accountant on staff to ensure stability for your business.

However, there could be some disadvantages to internal accounting, for instance:

Cost: Employing a full-time accountant within the company can be costly, especially for small companies that require financial resources to pay for it.

Unskilled: A company’s in-house accountant may have unrelated expertise to a reputable outsourcing firm, which could lead to mistakes or omissions in financial management.

Time and resources: Accounting in-house requires an extensive time and resources commitment, such as the hiring of new staff, the training process, and the onboarding of new employees.

Limited scaling: As your company grows, changing the level of assistance you receive could be easier if you use internal accounting. When your business grows and expands, it can lead to issues with efficiency or the need for more resources.

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Everything You Need to Know About Corporate Tax in UAE

Corporate tax is an essential aspect of running a business in the UAE. With its favorable tax laws and a favorable business environment, the UAE has become a hub for foreign investors. It makes it crucial to have a deep understanding and read the information on the corporate tax system in the UAE, in order to make the most of its benefits. This article will help you understand corporate tax in the UAE by explaining rules, regulations and its benefits in the UAE.

Introduction to Corporate Tax in UAE

There is no personal income tax in the UAE, because of which UAE has a tax-free environment, making it an attractive country to live in for most people. However, corporations are subject to corporate tax on their income earned in the UAE. The introduction of CT in this region was intended to help UAE with the transformation and development that the government has strategically planned to achieve. The country’s tax laws are enforced and implemented by The UAE Federal Tax Authority (FTA). The authority also provides guidelines and regulations for corporations and businesses operating in the UAE. Corporations need to be abiding by these laws and regulations to avoid getting penalized.

The Corporate Tax Law in the UAE

The corporate tax law in the UAE is regulated by the Federal Tax Authority, which oversees the implementation and enforcement of the country’s tax laws. The CT law applies to all businesses operating in the UAE, regardless of their size or structure. The tax is levied on a company’s profits, and the rate at which the tax would be at, depends on the type of business and the industry in which it operates.

Corporate Tax Rates in the UAE

The CT rate depends on the type of business and industry that it operates in, hence there is no standard CT rate in UAE. Oil and gas, insurance, and banking are however, some industries that are exempt from CT. The tax rate for other industries ranges from 0% to 55%.

Benefits of Corporate Tax in UAE

The UAE offers several benefits for corporations, including:

No personal income tax

A favorable tax environment for businesses

A stable and predictable tax system

A streamlined process for tax registration and compliance

Access to a large pool of potential customers and investors

Corporate Tax Filing and Compliance in the UAE

It is necessary for corporations operating in the UAE to file their tax returns on an annual basis. The tax returns must be filed with the Federal Tax Authority(FTA) by the end of the financial year. The tax returns must include detailed information on the corporation’s income and expenses, and must be supported by financial statements and other relevant documents.

Common Mistakes to Avoid in Corporate Tax in UAE

To ensure compliance with the CT laws in the UAE, it is important to avoid common mistakes, including:

Not registering for CT

Filing incorrect or incomplete tax returns

Failing to keep accurate financial records

Not seeking professional advice

FAQ

Q: Is there personal income tax in the UAE?

A: No, there is no personal income tax in the UAE.

Q: Who is responsible for implementing and enforcing corporate tax laws in the UAE?

A: CT laws are enforced and implemented by The Federal Tax Authority (FTA) in the UAE.

Q: What is the standard corporate tax rate in the UAE?

A: The rate depends on the type of business and the industry in which it operates. There is no standard ct in the UAE.

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Steps And Requirements VAT Registration In UAE

Under the value-added tax (VAT) system implemented on January 1, 2018. UAE VAT registration is mandatory for businesses with annual revenue exceeding AED 375,000 ($102,000).

Registration to the FTA requires a sound basis for the registration, preparation of the necessary evidence, and documentation to proceed without delays or issues. Therefore preparation and planning are key to minimising issues, potential risks, and penalties.

Here are the steps and requirements for VAT registration in the UAE:

1. Determine your business’s eligibility for VAT registration.

To determine your business’s eligibility for VAT registration, you need to consider the following:

Taxable Income: If your business has     revenue exceeding AED 375,000, you must register for VAT calculated on a     rolling basis, including the preceding 11 months and the next 30 days.

Type of business: All businesses operating     in the UAE must register for VAT except for a few exceptions. These     exceptions include businesses that are exempt from VAT, such as the sale     and supply of some financial and insurance services

Location of business: Businesses operating in     the UAE, regardless of location, must register for VAT if they meet the     above criteria.

2. Register your business with the Federal Tax Authority (FTA).

To register your business for VAT, you must register it with the Federal Tax Authority (FTA). To do this, below is a summary of the minimum requirements:

Possess a Trade License: To register your     business for VAT, you need a Trade License.

Register with the FTA: Once you have a Trade     License, you need to register your business with the FTA through their     e-Services portal. You will need to provide the following information:

Business name and address

Bank details

Type of business activity

Trade License number

Details of the business     owner(s)

3. Obtain a  Tax Registration Number (TRN).

Once you have registered your business with the FTA, you will receive a Tax Registration Number (TRN). This number is unique to your business and will be used for all your VAT-related activities.

4. Set up a  VAT accounting system.

To comply with VAT requirements, you need to comply with the provisions as a taxpayer as set out in the Executive Regulations. Ideally, you should set up a VAT accounting system that tracks your business’s VAT-related activities to help with the VAT reporting. This includes:

Recording the VAT charged on     your sales and the VAT paid on your purchases

Maintaining detailed invoices     for all your sales and purchases

Preparing and submitting VAT     Returns to the FTA regularly

VAT returns must be filed regularly, typically quarterly, or monthly. To file a VAT Return, you need to:

Prepare a VAT Return form: The VAT return form     includes details of your business’s sales and purchases for the period and     the VAT charged and paid.

Submit the VAT

Payment on VAT due

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Outsourced Accounting Services in Dubai, UAE

Dubai is renowned for its vibrant business culture offering an ideal economic and tax environment for businesses. Consequently, it is home to a few accounting firms that offer a wide range of services to businesses of all sizes to support their operations. For many businesses, working with an accounting partner is an ideal model especially during the early phase of company operations to help businesses manage their finances, streamline their operations, and stay compliant with local regulations.

One of the key services offered by accounting firms in Dubai is bookkeeping. This involves the recording, classifying, and summarizing of financial transactions to provide a comprehensive overview of a company’s financial position and tax compliance.

This can include the recording of invoices, receipts, and other documents that are related to the company’s financial activities and provide deeper insight into financial performance to plan future development and cash requirements.

Another important service that accounting firms in Dubai offer are tax preparation and filing. Dubai has a growing and increasingly complex tax system, and businesses must be compliant with local regulations. This includes ensuring that tax returns are filed accurately and on time and that businesses are paying the correct amount of tax.

Accounting firms in Dubai can help businesses to navigate the local tax system and ensure that they are paying the correct amount of tax. Furthermore, 2023 will see the introduction of Corporate Tax in the UAE which will place additional requirements to manage tax affairs optimally.

Auditing is another service that is offered by accounting firms in Dubai. This involves the examination of a company’s financial records to verify their accuracy and ensure that they follow local regulations. Auditing can help businesses to identify any areas where they are not compliant and take corrective action. Audits are also Regulatory requirements to operate a commercial license, especially under UAE Free Zones.

In addition to these core services, many accounting firms in Dubai also offer a range of other services, including financial planning, business consulting, and corporate finance. These services can help businesses to better understand their financial position, identify areas for improvement, and make informed decisions about their future growth and development.

This means that businesses can be confident that they are receiving accurate and reliable advice and that their financial affairs are being managed in a compliant and efficient manner. Businesses can choose the services that are most relevant to their needs and receive expert guidance and support in these areas.

There are a few factors that businesses should consider when choosing an accounting firm in Dubai. These include the firm’s reputation and track record, the experience and qualifications of its staff, the range of services that it offers, it’s certifications such as Federal Tax Agency and an efficient working method to reduce resource and time demands. It is also important to consider the cost of these services and to ensure that they represent good value for money.

Overall, accounting firms in Dubai play a vital role in helping new and growing businesses to manage their finances, stay compliant with local regulations, and grow and develop. These firms can offer a range of services tailored to the specific needs of businesses, staffed by experienced professionals who are well-versed in local regulations and practices.

By choosing the right accounting firm in Dubai, businesses can be confident that they are receiving accurate and reliable advice, and that their financial affairs are being managed in a compliant and efficient manner.

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Outsourcing Human Resource Management Services in UAE

Outsourcing HRM refers to the practices and policies that a company puts in place to manage its employees. That can include recruiting, hiring, training, performance management, and compensation. In the United Arab Emirates (UAE), HRM practices are shaped by the country’s unique culture, labor laws, and business environment.

If you are looking for Outsourcing HRM services in the UAE, a number of companies offer a range of HR-related services to businesses in the region. These services include HR consulting, payroll management, employee benefits administration, and more. You can search online or consult with a local business association or chamber of commerce to find HRM service providers in the UAE.

Outsourcing HRM in the United Arab Emirates (UAE) refers to hiring a third-party company or individual to handle HR-related tasks and responsibilities for an organization. That can include hiring and onboarding employees, managing employee benefits and payroll, handling performance evaluations, and conducting training and development programs.

Outsourcing HRM can help organizations in the UAE reduce costs, improve efficiency, and focus on their core business activities. Some companies choose to outsource all their HRM functions, while others may only outsource specific tasks. If you are considering outsourcing HRM in the UAE, it is essential to carefully research and compare potential vendors to find one that is a good fit for your organization.

The UAE HR Solution is a comprehensive package designed to help businesses in the United Arab Emirates effectively manage their human resources. The package includes a range of tools and resources to help businesses with tasks such as:

Recruitment and selection: The UAE HR Solution offers a range of recruitment and selection tools, including job postings, resume database searches, and applicant tracking systems.

Employee onboarding: The package includes resources to help businesses effectively onboard new employees, including employee handbooks and training materials.

Performance management: The UAE HR Solution includes tools for setting and tracking employee performance goals and resources for conducting performance evaluations.

Compensation and benefits: The package includes tools for managing employee compensation and benefits, including salary and bonus calculation tools.

Employee development: The UAE HR Solution offers resources to help businesses develop their employees, including training programs and professional development opportunities.

Compliance: The package includes resources to help businesses comply with local laws and regulations, including labor laws and employment contracts.

Overall, the UAE HR Solution is designed to help businesses in the UAE streamline their HR processes and better manage their workforce.

Top of Form

Human resources (HR) consulting firms provide advice and support to organizations on HR-related issues, such as employee benefits, hiring and firing, training and development, and compliance with labor laws.

These firms typically have a team of HR experts who work with clients to assess their HR needs and develop strategies to address them.

Some HR consulting firms also offer payroll and employee benefits administration, HR technology implementation, and HR process outsourcing. HR consulting firms can be valuable resources for organizations looking to improve their HR practices and better manage their workforce.

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UAE VAT Registration Guide For 2023

In the United Arab Emirates (UAE), VAT is a consumption tax that is levied on most goods and services sold in the country. If your business is based in the UAE or you are planning to start a business in the UAE, you may need to register for VAT if your taxable supplies and imports exceed a certain threshold.

To register for VAT in the UAE, you will need to follow these steps:

Determine if your business is     eligible to register for VAT. In the UAE, businesses with a taxable     turnover above AED 375,000 per year are required to register for VAT.

Prepare the necessary documents. To     register for VAT, you will need to have the following documents:

 Trade license  

Emirates ID or passport of the business owner(s)  

VAT registration application form  

Submit the VAT Registration application. You can submit your VAT     registration application online through the Federal Tax Authority’s (FTA)     e-Services portal or at an FTA customer happiness center. 

 Wait for approval. Once you have submitted your VAT registration application, the FTA will review your application and determine if you are eligible to register for VAT. If your application is approved, you will receive a VAT registration certificate. 

 Charge VAT on your sales. Once you have registered for VAT, you will need to start charging VAT on your sales at the applicable rate (currently 5%). You will also need to submit VAT returns to the FTA on a regular basis to report the VAT you have collected and any VAT you have paid on your purchases.

It’s important to note that VAT registration and compliance can be complex, and it is advisable to seek the guidance of a professional tax advisor to ensure that you are following UAE VAT regulations.

VAT De-Registration in UAE

In the United Arab Emirates (UAE), businesses that are registered for value-added tax (VAT) may de-register for VAT if they meet certain conditions. To de-register for VAT, a business must first inform the Federal Tax Authority (FTA) and then submit a de-registration application through the FTA’s e-services portal.

To be eligible for VAT de-registration, a business must meet the following conditions:

The business must not have any taxable supplies or imports in the past 12 months.

The business must not expect to have any taxable supplies or imports in the next 30 days.

The business must not have any outstanding tax liabilities or penalties.

If a business meets these conditions, it can apply for de-registration by completing the de-registration application form on the FTA’s e-services portal and submitting it along with any required supporting documents. The FTA will review the application and may request additional information or documentation before deciding on the de-registration.

If the de-registration is approved, the business will no longer be required to charge VAT on its supplies or pay VAT on its imports and will no longer be required to file VAT returns. However, the business may still be required to retain certain records for a period in case they are needed for audit or verification purposes.

VAT Return Filing in UAE

VAT Return filing is a process by which businesses report the amount of VAT they have charged on sales and the amount of VAT they have paid on purchases. VAT returns are typically filed on a regular basis, such as monthly or quarterly, depending on the rules of the country where the business is located.

In the United Arab Emirates (UAE), VAT is administered by the Federal Tax Authority (FTA). Businesses that are registered for VAT must file VAT returns with the FTA on a regular basis. VAT returns must be filed electronically through the FTA’s e-Services portal.

To file a VAT return in the UAE, businesses will need to:

1.    Gather all the necessary documentation, including invoices, receipts, and other records of sales and purchases made during the relevant period.

2.    Use this documentation to calculate the total amount of VAT that has been charged on sales and the total amount of VAT that has been paid on purchases.

3.    Log in to the FTA’s e-Services portal and navigate to the VAT return filing section.

4.    Enter the required information, including the total amount of VAT charged on sales and the total amount of VAT paid on purchases.

5.    Submit the VAT return.

It’s important to note that businesses must file their VAT returns by the deadline set by the FTA. If a business fails to file its VAT return on time, it may be subject to penalties and fines.

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What Is Transfer Pricing, And How Does It Impact My UAE-based Business?

What is Transfer Pricing?

In the wake of the implementation of Corporate Tax in UAE, The idea of transfer Pricing (TP) is receiving greater attention in the Ministry of Finance (MoF) released Questions and Answers as well as the Public Consultation documents.

In the case of many locally-owned companies, this idea could be completely new, leading to numerous issues and Transfer Pricing considerations for implementation. The topic of this article is transfer Pricing, as well as its implications for UAE, which will be discussed. UAE will be reviewed to provide more information to business owners.

The most common definition of transfer pricing is commonly referred to as:

“the prices of goods and services sold or purchased between the entities with associated parties.”

A related party is an entity or person with a prior relationship with a company through control, ownership, or kinship (in instances of natural people).

Naturally, related party transactions may allow entities to manipulate profit. Therefore, a strong emphasis on transfer Pricing is evident in an introduction to the UAE corporate tax introduction. The world’s tax justice network defines Transfer Pricing as “a technique used by multinational corporations to shift profits out of the countries where they operate and into tax havens.” 

Both definitions explain that transfer prices are a way to make money. But it’s helpful to go back and expand the definition. One could include that Transfer Pricing means:

A tax law to prevent abuse was enacted to enforce the “arm’s     length” principle.

It is a requirement that the price of the goods and services     charged by the respective parties must be precisely the same as they would     be should the parties involved in this transaction have never been     connected.

The goal of the arm’s-length concept and transfer pricing (“TP”) guidelines is to ensure that there are no instances of pricing mismatch in transfers due to improper transfer Pricing methods. In which the prices of transfers are deliberately manipulated to gain certain tax advantages which benefit several related entities.

Transfer pricing is of crucial importance to corporate taxation. Transfer Pricing directly impacts the distribution of losses and profits for companies subject to corporate tax. Notably, the practices of Transfer Pricing taxpayers have an immediate impact on the tax revenues of a nation.

Suppose the tax rates for corporations of the respective countries differ significantly. In that case, the associated parties might be motivated to establish their transfer rates to allocate profits to the tax-free jurisdiction, thus reducing the total (group) global corporate tax burden.

Even when a country has lower tax rates and is not governed by Transfer Pricing laws, transfer mispricing could result in substantial tax revenue being removed.

For instance:

Company A, a tax resident of Bangladesh, manufactures electronic and personal computers in a country taxed at a rate of 32.5 percent. The company sells its manufactured items to the UAE-related tax-resident business Company B, which pays 0 percent or the corporate tax rate of 9% for the resale of its products in third markets and the UAE.

In this scenario, company A will likely be driven to sell the product for price or with a lower profit cost to company B. Company B can resell the product with the highest possible margin and take home the more significant portion of the profits, to make both companies pay corporate taxes at a lower amount.

Tax authorities in Bangladesh are likely to audit and modify the tax on corporate income paid by company A, thereby taxing a substantial portion of the profits that the UAE taxes. Suppose company B had paid taxes on corporate income in the UAE.

In that case, company B is likely to be keen to reduce the tax paid by the UAE to avoid and lessen the phenomenon known as “double economic taxation” through the transfer pricing adjustment. That’s why countries with corporate tax systems, in general, must develop transfer pricing laws and establish an administrative capacity to manage the request for adjustment.

Additionally, accounting, as well as legal and corporate tax laws and practices, vary from one country to the next and from country to country. It is essential to be aligned with the Transfer Pricing law to ensure that the appropriate TP adjustments are based on the same rules and principles as the Transfer Pricing procedure.

Will It Impact A UAE-Based Business?

The simple answer is yes. The documents published by the MoF documents ( Press release and Public Consultation) clarify that UAE companies must adhere to Transfer Pricing regulations and documentation requirements based on the Transfer Pricing Guidelines.

In the context of the Corporation Tax introduction as part of the Corporate Tax introduction, the UAE will implement Transfer Pricing rules.

That means that all transactions between related parties and persons who are connected (“intercompany transaction”) will have to comply with applicable TP requirements according to the principle of arm’s length outlined in the OECD Transfer Pricing Guidelines.

Who are the Related Parties?

As per the UAE Corporate Tax Consultation Document [22 (“Consultation Paper”), A related person is an individual an entity with an existing connection to a business by control, ownership, or family kinship (in cases of natural individuals).

The document also lists these relationships in the form of connected parties:

A minimum of two or more persons who are related with the 4th     degree of kinship or affiliation, for example, through marriage, birth, or     adoption;

When alone or in conjunction with a partner, a person, or a     legal entity, the individual directly or indirectly holds more than 50% of     this legal entity.

One or more legal bodies, where one legal entity on its own     or in conjunction with a related entity directly or indirectly, holds at     least a 50% percentage of or controls each legal entity

More than two legal entities, if the taxpayer, either alone     or in conjunction with a related person directly or indirectly, holds at     least 50% of each or is the sole owner;

A taxpayer and its branch or permanent establishment

Members of the same unincorporated partnership and

Non-exempt and exempt business activities of the same     individual (for instance, an exempt-free zone-based business).

Who Are Connected Persons?

Consultation Paper Consultation Paper stresses that in the absence of taxation on personal income in the UAE, individuals who own tax-deductible companies would be encouraged to reduce the UAE corporate tax base through excessive payments to themselves or those associated with them.

So, benefits or payments given by a company for the “Connected Persons” will be tax-deductible only if the company can show that the benefit or payment conforms to “arm’s length” or the “arm’s length principle” and the expense is entirely and solely for the benefit of your business.

Connected Persons differ as Related Parties. A person is considered as being connected to a business in the scope of the UAE Corporate Tax regime it is:

An individual who either directly or indirectly owns an     ownership control or interest in the tax-paying person.

An officer or director of a taxable person.

An individual who is related to the director, owner, or     another officer tax-paying person in the extent of the 4th degree of     family kinships such as through marriage, birth, or adoption.

If the tax-paying person is a member of an unincorporated     partnership or any other     partner of the same partnership and

A Related Party of any of the above.

What Are the Compliance Obligations?

Transfer Pricing rules usually place the onus probandi (burden of evidence) on the taxpayer. The taxpayer is responsible for intercompany transactions with an amount greater than a specific threshold in the applicable tax year to create the Transfer Pricing documents and show that the transactions between its companies were carried out at an “arm’s length.”

The value of intercompany transactions has yet to be defined and is expected to be clarified following the implementation of UAE Corporate Tax Legislation. Consultation Paper Consultation Paper does specify the mandatory Transfer Pricing documentation that will comprise a Local File along with a Master file (according to the formatting and content required in OECD BEPS Act 13 as well as following the World’s Best practices).

Additionally, the arm’s-length nature of intercompany transactions must be confirmed using any of the internationally accepted Transfer Pricing methods or another approach when the business can prove that the specified method can’t be used reasonably.

If the requirements are met, companies must complete and submit a Transfer Pricing disclosure form with information about their intercompany transactions. It is unclear how it is necessary to submit the Transfer Pricing disclosure form will need to be filed simultaneously with when filing the tax return (i.e., at least 9 months from the date of expiration of the relevant period of tax) or by an earlier date.

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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.

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UAE VAT Registration in 2021 – A Step-by-Step Guide

Since the UAE introduced the VAT on Value Added Tax (VAT) on January 1st, 2018, business owners are required to follow the rules, including UAE VAT Registration and tax filings.

Companies operating in the UAE must ensure that VAT is correctly collected and properly accounted for so that it can be paid back to Federal Tax Authority (FTA).

UAE VAT Registration means that your business is recognized by government authorities to take VAT from your customers and then transfer this to the government.

As a business owner, you must be aware of the critical aspects of VAT in the UAE.

These are step-by-step guides.

What is VAT?

Taxes on VAT are applied to the exchange of services and goods. It that is used at every stage in the chain of supply. It is calculated based on the value added at each step. This indirect tax is imposed on the Government of UAE at 5 percent on most businesses and products. However, food, education, and healthcare items are exempt from VAT.

VAT Registration UAE

If you need to declare VAT depends on your business’s turnover per year.

Exclusive from Registration for VAT Value of supplies that are less than Dh187,500

Voluntary UAE VAT Registration, The value of reserves is between Dh187.500 to Dh375,000.

Mandatory VAT Registration Value of supplies above Dh375,000

Your registered business will receive a unique tax identification number (TRN) when the UAE VAT registration is accepted. The VAT invoices on all VAT invoices will include the TRN.

UAE mainland businesses, as well as free zone companies, are taxed on VAT. The only ‘designated zones’ designated by Cabinet members of the UAE Cabinet are outside the scope of UAE VAT taxation. Moving goods within areas are free of tax.

It typically takes between 3 and 5 days for the tax registration process to complete.

VAT Return Filing

VAT-registered companies (taxable individuals) are required to submit an annual VAT return to the FTA.

A VAT return is a summary of the supplies and purchases that a tax-paying person makes during tax time to calculate the tax liability of VAT.

You can file your VAT return online every month or every quarter by visiting FTA’s official website – https://www.tax.gov.ae/.

Tax returns should be filed on time, usually by the 28-day deadline. The tax period is the time in which taxes are due and due. The tax period:

* Monthly for businesses with annual revenue of Dh150 million or greater. * Quarterly rate for companies with an annual turnover of less than Dh150 million

VAT Liability

In contrast to customer business revenues, VAT is not part of your company’s income. Instead, the VAT you collect is known as VAT liability & has to be paid to the government of the UAE.

Vat liability is the gap between the output tax to be paid (VAT applied to supplies of services and goods) and the tax on input (VAT incurred when purchasing) which is recoverable for a specific tax time.

If output taxes are more significant than input taxes, the excess must be paid to FTA. However, if there is an excess of output tax and input tax, the taxable person can recuperate the quantity and apply it to future payments to FTA.

Documents Required for  VAT Registration in UAE

You must provide duplicates of these documents to register for UAE VAT Registration.

Certificate of registration or incorporation.

Trade license

Passport and visa, or Emirates ID of director/manager

A partnership contract, memorandum association, or another document that provides information on the business’s ownership.

The profile of the named company director.

Bank account details;

Contact details;

Physical office;

List of business directories or partners in the UAE over the last five years

The Federal Tax Authority would also need to declare the following:

The actual or estimated value of transactions in the financial sector;

The registered business activities of the applicant;

Information on the anticipated turnover of the company over the next thirty days;

The turnover of the business over the last 12 months (supporting documents are required);

Information about the business’ anticipated exempt supply;

All details about the business exports and imports of the company;

Information on the customs registration process;

The business activities that take place in the GCC

The taxpayer or VAT-registered company is also required by the tax authorities to maintain the following records/documents:

Tax invoices and any other document pertinent to the receipt of the goods or services you need;

Notes on the tax credit, in addition to any other documents that the company receives about the purchasing of products or services

Record of tax-deductible products received or manufactured;

Tax invoices and any other document that is the issue concerning products or services;

Notes on the tax credit and any other type of document issued to purchase items or services

Documents of services or goods that are disposed of or used by the company to deal with matters not connected with the business, as in the tax paid for these;

Record of the imports and supply of goods or other products;

Documents of corrections or adjustments applied to tax invoices or any other account

Record of products or goods which are shipped to another country

Tax records must be kept by any tax-paying individual and include the following details:

Taxes that can be recovered on imports or supplies;

Tax recoverable subsequent adjustment or correction of error;

Tax due following adjustment or error correction

Taxes owing on all tax-deductible products

UAE VAT Registration Process

If you have your soft copies of the previously mentioned documents in hand, you’re in good shape to begin the registration procedure.

First of all,

Log in to e-service, and establish an account. Input the UAE VAT registration form

FTA (Federal Tax Authority) authorized e-service account is required to register VAT. However, it is easy to create an account through their official site.

VAT Rates in UAE

The rates of VAT in the UAE differ from product to product. The standard rate of the government is 5%, and you should charge this amount unless your product or service is in”zero-rated,” or “zero-rated” or VAT exemption.

Zero-rated rates are available on tax-exempt products; however, the buyer is not liable for VAT. Your VAT account must record and report the VAT zero-rated transactions, too.

Certain goods and services, including the construction of residential structures and land and financial services, are exempt from VAT.

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UAE Amendment of the VAT Decree-Law

The Decree-Law No. 18-2022 regarding VAT was announced on the 28th of September 2022. It announced amendments to a few aspects in the UAE Federal Decree-Law no. 8 of 2017 on VAT (Value Added Tax). The changes will take effect on January 1, 2023.

In all, 24 articles were modified and one article regarding the statute of limitations has been added to UAE VAT Law representing some important modifications to the Legislation.

The major amendments to UAE VAT Law – effective on the 1 day Jan 2023 are as follows:

Nature of Change

Amendment

Definitions

The new definitions have  been added in relation to Relevant Charitable Activity  Pure Hydrocarbons Tax Evasion Tax Audit Tax Assessment and voluntary  disclosure.

The supply of goods outside the VAT scope

A new provision has been included in Article 7  stating the Executive Regulations could define any other supply (other than  the provision of vouchers or transfers of business) as being to be outside the reach of VAT.

Goods that are subject to zero-rate

Additional products are included under Article 45  (clauses 4 5, and 6.) as being exempt from the VAT at a zero rate. It  includes import of the means of  transportation, import of products that are related to transportation and the  import of aircrafts for rescue and ship.

Input VAT recovery

Two new clauses were included in Article 55 relating  to the recovery of VAT on inputs. This stipulates  the conditions for the taxpaying person to claim back VAT that was declared  or paid on the import of goods and services.

Adjustment of VAT output

The tax adjustment for outputs stipulated under  Article 61(1) refers to the situation when the tax-payer employs an improper  tax treatment. In such situations the tax  payer must present an acknowledgement of tax credit to increase the output  tax.

When is the best time to issue An tax credit note

Article 62(2) regarding the mechanism for adjusting  output VAT has been amended to include the condition that the tax payer must issue an tax credit note within 14 days  of the date that any of the situations mentioned under  Article 61(1) is observed.

Payment of tax

65(4) of the Constitution 65(4) stipulates that it is  mandatory for the tax payer to pay tax to the  Federal Tax Authority (FTA) in the event that an individual issues an tax invoice  with VAT on it , or receives the amount in UAE VAT Law.

The timeframe for issuance of an tax invoice

Article 67(1) stipulates the date for the issuance of tax invoices in accordance  with the Article 26 (date of continuous supply) to be 14 days following the  date of supply.

The VAT registration exemption is not  required.

The provisions of Article 15 regarding the exemption  to register will be applicable to registered people in addition to those who  are not registered. This is the case when their  products are zero-rated or if they are no longer making supplies other that  zero-rated.

Supply date in certain instances

26(1). Article 26(1) determining the date of supply in  certain circumstances is the date at which the year is one-year since the  date when the service or product is supplied in addition to other  circumstances that establish the time of the delivery.

Reverse charge

The clause 3 in Article 48 specifies that the reverse charge in the domestic market will be  applicable to Pure Hydrocarbons.

Supply in specific circumstances

Article 30(8) concerning the location of supply in  certain instances, states that the source  of supply for transportation-related services is the location where  transportation begins.

The place of residence of the principal

The article 33 defines the the residence of a principal as having to be  the home for the agent. Under the current UAE VAT Law,  it was stipulated that the principal’s the agent’s residence must be the  principal’s residence. that of the principal.

Supply value

Article 36 on the specific anti-avoidance rules  regarding values of supplies or the import of products and services between  closely related parties will now take precedence over the Article 37 (value  of supply deemed to be).

New Article introduced regarding the statute of  limitations

The latest article on the statute of limitations also  covers other instances: The limitation period of five years does not apply to  situations in which the FTA issued a notice to audit the tax-paying person  provided that the audit can be completed in four years from the date of issue  in the form of a notice. 

If the taxpayer makes a voluntary disclosure within  the 5th year after the date of the applicable tax year the statute of  limitations is increased by one year. Voluntary disclosure is not able to be filed  by a tax-paying taxpayer after the expiration of  five years following the expiration of the relevant fiscal period. The  article further states that these extended times can be further amended  by the Cabinet’s separate Decision.

It is suggested to look over modifications added by the UAE VAT Law and ensure readiness before the date effective 1 . January 2023.  This change will result in changes in the use of VAT on certain goods (e.g.  the purchase of Hydrocarbons, the transport means and other transportation equipment, etc. ) The timeframe for the issuance of a tax invoice or tax credit, and ways of keeping records and files for a long time

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UAE VAT Registration in 2022 – A Step-by-Step Guide

Since it was announced that UAE implemented VAT on Value Added Tax (VAT) 1 January 1st, 2018, business owners must follow the rules, which include UAE VAT Registration and tax filings.

Businesses operating in UAE should ensure that VAT is collected correctly and adequately accounted for so they can pay the Federal Tax Authority (FTA).

UAE VAT registration means that government officials recognize your business as a legitimate business to take VAT from your customers and then transfer this to the government.

As a business owner, you must know all the essential aspects of VAT in the UAE.

There is a step-by-step guide.

What is VAT?

The VAT tax is levied and imposed on the exchange of services and goods applied at every stage in the supply chain. The Government of UAE sets this indirect tax at a nominal rate of 5 percent on most businesses and interests. However, food, education, and healthcare items are exempt from VAT.

VAT Registration UAE

If you need to be UAE VAT registered is contingent upon the turnover per year of your business.

Exclusive from UAE VAT Registration Supply value less than Dh187,500

Voluntary VAT Registration Supply of goods between Dh187,500 to Dh375,000

Mandatory VAT Registration The value of supplies that exceed Dh375,000

After your UAE VAT Registration is approved, your registered company will receive a unique Tax Registration Number (TRN). The VAT invoices on all VAT invoices will include the Tax Registration Number.

UAE mainland businesses, as well as free zone businesses, are taxed on VAT. The only ‘designated zones’ designated by Cabinet members are outside the UAE VAT taxation. The transportation of goods within the zone is exempt from tax.

It typically takes between 3 and 5 days for the Registration of VAT to be processed.

VAT Return Filing

VAT-registered companies (taxable individuals) must file an annual VAT return to the FTA.

A VAT return summarizes the supplies and purchases of a taxpayer during the tax year to calculate the tax liability of VAT.

You can file your VAT return online every month or every quarter by visiting FTA’s official website – https://www.tax.gov.ae/.

Tax returns should be filed on time, usually by the 28-day deadline. The tax period is the time in which taxes are due and due. The tax period:

* Monthly for businesses with annual revenues over Dh150 million or greater. * Quarterly rate for companies with an annual turnover of less than Dh150 million

VAT Liability

As with other business revenues, the VAT you collect from customers is not an element of your business’s revenue. The VAT that is collected is known as VAT liability, & it has been paid back to the government of the UAE.

Vat liability refers to the gap between the output tax to be paid (VAT applied to supplies of services and goods) and the tax on input (VAT paid on purchases) which is recoverable for a particular tax time.

If the output tax exceeds the input taxes, they must be paid to FTA. If there is excess input tax above output tax, the taxpayer must recover the extra tax and apply it to future payments due to FTA.

Documents Required for VAT Registration in UAE

You’ll need to provide duplicates of these documents to be eligible for UAE VAT Registration.

· Certificate of registration or incorporation;

· Trade license

· Passport and visa, or Emirates ID of director/manager

· The partnership agreement or memorandum association, or another document that provides information on the business’s ownership;

· The profile of the Director of the company who was appointed;

· Bank account details;

· Contact details;

· Physical office space;

· List of partners or directories of business in the UAE over the last five years

The Federal Tax Authority would also need to declare the following:

· The actual or estimated value of financial transactions;

· Business activities that the applicant has registered;

· Information on the anticipated revenue of the company for the next thirty days;

· The turnover of the business over the previous twelve months (supporting documents are required);

· Information about the business’ anticipated exempt supply;

· Information about the company’s Exports and imports;

· Customs Registration Details;

· The business activities that take place in the GCC

The taxpayer or VAT-registered company is also required by the tax authorities to keep the following records:

· Tax invoices and any other document pertinent to the receipt of products or services.

· Notes on the tax credit, along with any other documents that the company receives about the acquisition of products or services

· Record of tax-deductible materials received or made

· Tax invoices, as well as any other document that is issued concerning services or goods;

· Credit notes for tax purposes and any other type of document issued to purchase items or services

· Documents of services or goods that are disposed of or used by the company for purposes not connected with the business, as with taxes paid in connection with such;

· Record of the imports and supply of goods or other products;

· Record of adjustments or corrections made to tax invoices or any other account;

· Documents of goods or other products exported to any other country

Tax records must be kept by a tax-paying individual and include the following details:

· Taxes recoverable on imports and supplies;

· Taxes that are recoverable after adjustment or correction of error;

· Tax due following adjustment or modification of error;

· Taxes owing on all tax-deductible items

UAE VAT Registration Process

If you have your soft copies of these documents, you’re in good shape to start the registration procedure.

First of all,

Sign up at the e-service and then establish an account Input the UAE VAT Registration form

FTA (Federal Tax Authority) authorized e-service account is obligatory to register VAT. It is simple to set up an account through their official site.

VAT Rates in UAE

The rates for VAT in the UAE differ for each product. The standard rate for the government is 5%. You should charge this amount unless the product or service is in”zero-rated” or “zero-rated” or VAT exemption.

Zero-rated rates are available on tax-exempt products; however, the buyer is not liable for VAT. Your VAT account must record and report zero-rated VAT transactions too.

Certain services and products, such as the construction of residential structures and land and financial services, are exempt from VAT.

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A Guide to Liquidation of Companies

When any business can no longer afford to operate, liquidation is a formal process done by an approved firm to ensure the business meets its obligations to shareholders and other stakeholders (e.g. debtors, employees, and Government entities).

In this guide, we take a closer look at Company liquidation to detail what it entails and how to proceed.

What You Need to Know About Liquidation of Companies

What exactly is the liquidation of companies?

In essence, company liquidation is the process of ending the business and distributing the various assets from the business to claimants. Businesses are then able to claim bankruptcy.

It can also involve the selling or auctioning of stock – often at reduced prices. Some important things to know about liquidating a business include the following:

Why liquidate?

Registered companies in severe financial difficulty can decide to claim bankruptcy. Debts and other stakeholders can be paid using cash made from selling the business.

To Read More About Our Blog Click Here

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Audited Financial Tips from the Top Audit Firms in Dubai

Your business may be obliged to present audited financial accounts to external stakeholders. These can include Licensing Authorities or other external stakeholders. If you are new to the procedure, it can initially seem daunting.

To help you get a better understanding of how audits work, how they benefit your business, and why they are important, we have prepared a helpful guide that gives you all the information you need.

In short, audits are conducted to show stakeholders that audited financial statements are reliably prepared and attested to the appropriate IFRS standards.

Audits are typically conducted by independent and accredited auditors to assure stakeholders that audited financial statements accurately represent a true reflection of the company’s financial position.

There are numerous types of audits including tax audits, investigative audits, operational audits, and financial audits. Financial audits are the most common.

Why do you need an audit?

Audits are often required to meet certain financial reporting requirements from stakeholders and some government bodies.

To Read More About Our Blog Click Here

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VAT Registration For Businesses In The UAE - SimplySolved

As a UAE business or individual receiving commercial consideration, UAE VAT Registration is mandatory if your taxable supplies exceed AED375,000 in the next 30 days.

For many businesses, Registering for UAE VAT often leads to frustration and delay. It is a common misconception the issuance of a UAE FTA TRN is a straight forward process.

The VAT system is evolving. The FTA continues to adapt the Tax system from empirical data and market experience. Consequently, due processes will also change to reflect these considerations. 

Understanding VAT Registration in the UAE

To get a better understanding of UAE VAT Registration, here are some important considerations to note.

Early Years

During the first year of VAT, it was evident that many companies and individuals operating in the UAE Registered for VAT, others waited and some (especially individuals or directors) were unclear about how they should comply.

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Why Outsourcing HRM Operations Works - Top 5 Reasons

It’s common for some organisations to overlook HRM operations especially when revenue-generating operations and other priorities consume management attention. Nevertheless, human capital is critical, and the success of the organization has been strongly linked to the performance of its human resources.

A large body of empirical research, the US Bureau of Labour Statistics, has proven that an increased emphasis and investment in strong HR practices benefit the organisation through higher retention rates, better returns on employee costs, and employee satisfaction. These benefits deliver real impact to the top and bottom lines of your company.

To manage this critical function, some organisations may form an HR department and resource HR specialists operate their HR functions. While others consider outsourcing their HRM functions to specialist companies. In this blog, we discuss which option is better suited to your business.

Read More About Outsourcing HRM Operations Work

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Implementing Odoo Accounting to Meet UAE FTA Compliance

Implementing Odoo Accounting provides significant capabilities in managing a range of accounting operations in a more advanced manner than standard cloud-based accounting systems. These include multi-company support, automation of intercompany transactions, advanced reconciliation, budget management, and reporting. Therefore, as an all-in-one platform with this accounting functionality, Odoo offers a robust and cost-effective solution for enterprises.

Since the introduction of VAT Registration in 2018, demands on accounting systems to meet compliance obligations under the UAE Executive Regulations are specifically detailed under Requirements Document for Tax Accounting Software specification.

To Read More About Implementing Odoo Accounting click the link above