A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.
Furthermore, a business may choose to register for VAT voluntarily if its supplies and imports exceed the voluntary registration threshold of AED 187,500. Similarly, a business may register voluntarily if its expenses exceed the voluntary registration threshold.
In the United Arab Emirates (UAE), businesses are required to file a Value Added Tax (VAT) return periodically, typically on a monthly or quarterly basis. The frequency of VAT returns is determined by the Federal Tax Authority (FTA) based on the business’s turnover and other factors.
The deadline for filing a VAT return in the UAE is usually within 28 days from the end of the reporting period, and businesses must submit their returns electronically through the FTA’s e-services portal.
In addition to filing VAT returns, businesses must also keep accurate records of their financial transactions and VAT-related information, including invoices, receipts, and other documentation, for at least five years.
It’s important for businesses operating in the UAE to be familiar with the VAT regulations and requirements, and to ensure that they comply with the filing deadlines and other requirements to avoid penalties and fines. Businesses can seek professional advice from local tax advisors or consult the FTA’s website for more information.
There are several reasons, Why we need audit in UAE, why auditing is important in the United Arab Emirates (UAE):
Compliance: Auditing helps ensure that a company’s financial records and operations comply with local laws and regulations, such as the Federal Decree-Law No. (5) of 2017 Concerning Value Added Tax (VAT) and its Executive Regulations.
Improved transparency: Auditing provides an independent and objective assessment of a company’s financial information, improving the transparency of its financial position and performance.
Detection of errors and fraud: Through the systematic examination of financial records and processes, auditing can detect errors, fraud, and other financial irregularities, helping to prevent financial losses and protect the reputation of the company.
Enhanced credibility: Audited financial statements are viewed as more credible and trustworthy than unaudited statements, which can improve the reputation of the company and increase investor confidence.
Better decision-making: Audited financial statements provide reliable and accurate information that can be used to make informed business decisions, such as securing funding, making investments, or expanding operations.
Several types of audits can be performed in the United Arab Emirates (UAE), including:
Financial Statement Audit: This type of audit focuses on the accuracy, completeness, and reliability of a company’s financial statements, including the balance sheet, income statement, and cash flow statement.
Internal Audit: This type of audit is performed by the company’s internal audit team and focuses on evaluating the efficiency and effectiveness of internal controls, processes, and procedures.
Tax Audit: This type of audit is performed by the Federal Tax Authority (FTA) and focuses on verifying the accuracy and completeness of a company’s VAT returns and tax payments.
Compliance Audit: This type of audit focuses on evaluating a company’s compliance with relevant laws, regulations, and standards, including the UAE Commercial Companies Law and International Financial Reporting Standards (IFRS).
Operational Audit: This type of audit focuses on evaluating the efficiency and effectiveness of a company’s operations and processes, including its use of resources, performance management, and risk management.
Information Systems Audit: This type of audit focuses on evaluating the security, reliability, and effectiveness of a company’s information systems and technology infrastructure.
These are some of the common types of audits performed in the UAE, and the specific type of audit performed may depend on the needs and requirements of the company, as well as regulatory requirements.
Accounting and bookkeeping are essential activities for businesses of all sizes and types, as they provide a systematic and accurate record of the financial transactions and activities of a company.
Record Keeping: Accounting and bookkeeping in UAE are necessary for maintaining accurate and up-to-date records of a company’s financial transactions, including sales, purchases, and expenses, which are critical for making informed business decisions and evaluating the financial health of the company.
Compliance: Accounting and bookkeeping are also necessary for complying with local laws and regulations, such as the Federal Decree-Law No. (5) of 2017 Concerning Value Added Tax (VAT) and its Executive Regulations, which require businesses to keep accurate records of their financial transactions and submit periodic VAT returns.
Taxation: Accurate and up-to-date accounting records are also essential for preparing and submitting accurate tax returns and ensuring compliance with local tax laws and regulations.
Reporting: Accounting and bookkeeping provide the information necessary for generating financial statements, including the balance sheet, income statement, and cash flow statement, which are critical for managing the financial performance of a business and for communicating with stakeholders, such as investors, lenders, and customers.
In conclusion, accounting and bookkeeping are important activities that provide a company with the financial information and records necessary for effective financial management and compliance with local laws and regulations. Businesses should ensure that they have an efficient and effective system in place for accounting and bookkeeping and can seek professional advice from local accounting and bookkeeping services providers if necessary.
The following Persons shall be automatically exempt from Corporate Tax (without application) :
A taxable person will need to register with The Authority to submit CT returns. [Art. 51 of the CT Decree-Law]
It is compulsory for a person who becomes subject to Corporation Tax to:
make themselves known to The Authority
apply to be registered for CT and obtain a TRN,
The taxable person’s Tax Registration Number (TRN) will then be issued and subsequently used by The Authority.
Returns must be submitted to the Authority within nine months of the end of the tax period, or by such other date as is determined by The Authority.
