Ensuring proper accounting and bookkeeping following the standards prescribed by the FTA

We are soon approaching the end of Financial Year 2023 for most businesses in UAE. 

Why is this year-end different and significant?

The UAE Corporate Tax (CT) regime will become effective for financial years starting on or after 1 June 2023. This means that businesses with a January to December financial year will be subject to CT from 1st January 2024.

What steps have been/should be taken since 31st December 2023 to ensure a smooth transition to compliance with the Corporate Tax rules and regulations?

Corporate Tax Rules and Regulations​:

Ensuring proper accounting and bookkeeping following the standards prescribed by the FTA

FTA (Federal Tax Authority) is the government entity responsible for the administration, collection and enforcement of federal taxes. According to the Federal Decree-Law No. 7 of 2017, all UAE companies must maintain proper and updated commercial books and accounting records for atleast the past 5 years.

Maintaining proper books of accounts as per UAE regulations would allow firms to focus more on company operations and business objectives plus also ensuring accurate receipts and payments of cash and other transactions. For it to happen in the most efficient and expert way, it is highly suggestive to hire a Bookkeeping Service Provider in Dubai UAE and outsource the process.

Assessing if your business can avail a Small Business Relief

To elect for a Small Business Relief,  any UAE resident taxable person must have a revenue of either less than or equal to AED 3 million. This revenue has to be in the relevant tax period and any previous tax period. At Kaizen, we provide comprehensive outsourced accounting services in Dubai UAE and can help you understand and optimise the benefits of the Small Business Relief Regime.

Assessing the benefits of forming a Tax Group for your business

Setting up a business in the UAE offers unlimited benefits including tax benefits. It allows for the income and losses of the members of the Tax Group to be offset against each other. Infact the transactions/arrangements or the transfer of assets and liabilities between members of the Tax Groups are generally disregarded when determining the Taxable Income of the Tax Group.

Ensuring timely CT registration for both mainland as well as free zone entities

Gone are the days of hassle piles of files and aching bureaucratic barriers. Convenient reporting requirements and a simplified registration process for corporate taxation save you time and resources that you can use to focus on what really matters – your business. By ensuring timely CT registration for both mainland as well as free zone entities, a business can ensure a smooth transition to compliance with the Corporate Tax rules and regulations. With expert Outsourced Accounting Services in Dubai UAE, Kaizen can make this process hassle-free for you.

Maintenance of all records during the Financial Year in which your business is subject to CT. This will include Transfer Pricing documentation.

Precise and updated financial record-keeping is non-negotiable for corporate tax compliance in the UAE, including tax-exempt entities. Records must be retained for seven years beyond the tax period. Kaizen is the best Bookkeeping Service Provider in Dubai UAE with a commitment and experience to delivering services customised to each client’s specific needs, Kaizen offers a wealth of expertise and knowledge to ensure seamless navigation of the Corporate Tax landscape in the UAE.

If you require further information/ clarification our tax expert team will be happy to assist you.

 

Views expressed by Kaizen Business Consultants are not binding on any authority or court, hence no assurance is given that a position contrary to the opinions expressed herein will not be asserted by any authority or a Court of law. Further, unless specifically requested and agreed, we are not obligated to update the suggestions made herein for subsequent changes or modifications to the law, to the rules/ regulations, or to the judicial and administrative interpretations thereof.