fbpx

What Are the Steps for Preparing Accounting and Bookkeeping for UAE Corporate Taxes?

840 Comments / By /

Companies must keep their books of accounts for at least five or more years after the end of each financial year under the Federal Trade Companies Law of the United Arab Emirates. Legal action can be taken against a business operating in the UAE with books found to be inaccurate or if it fails to keep its books for the required period. Accounting and bookkeeping requirements are essential elements of the new UAE corporate tax.

IS IT MANDATORY TO KEEP FINANCIAL STATEMENTS UNDER UAE CORPORATE TAX?

UAE companies subject to Corporate Tax UAE rates should prepare their financial statements following international reporting standards or standards approved in their region. For example, a mainland business can use internationally accepted accounting practices and standards, including GAAP and International Financial Reporting Standards (IFRS).

However, entities in the free zone must follow the standards set by the free zone authority for corporate tax purposes. For example, companies registered in the DMCC (Dubai Multi-Commodity Center) free zone are only allowed to prepare financial statements by the regulations of the designated free zone authority. In the case of auditing financial statements for corporate tax purposes, mainland companies such as limited liability companies or public or private joint stock companies are required to perform financial audits.

 To maintain reliable financial records by IFRS (International Financial Reporting Standards) and other laws accepted by the UAE, businesses in the UAE need the help of licensed public accountants and certification. 

WHAT IS A TAX RETURN?

Businesses typically have to file three main types of tax returns.

  • SALES TAX:

This is a tax that you may need to add to your price. The government wants you to collect this money on their behalf and deposit it at certain times.

  • INCOME TAX:

This is calculated according to your profit.

  • TAX RELATED TO PERSONNEL:

You must withhold income tax from the employee’s salary and submit it to the tax authorities.

WHY IS IT IMPORTANT?

Paying too much tax is like giving away money. Paying too little might get you in trouble. But on the other hand, getting it right will greatly increase your chances of running a profitable and relatively hassle-free business. 

HOW TO DECLARE TAX

The tax return is the easiest part. This can often be done online, which is a big step up from the days of paper returns. However, preparing these statements is the hardest part.

SALES TAX RETURN

An accountant usually manages them throughout the year. They will track what you have collected and then prepare a report to the tax authorities. Any taxes due are generally paid when the report is filed.

CORPORATE INCOME TAX

This is calculated on profit. The higher they are, the more taxes you have to pay. But there are legal ways to reduce your profits in the eyes of the taxpayer. This is when things get technical and high-risk, as government tax experts will audit your returns. That’s why most businesses hire an accountant to prepare their tax returns. 

EMPLOYEE INCOME TAX

They are calculated and collected from the employee’s payroll each pay cycle. You must file a report with the tax authorities showing how much you paid your employees and how much tax you withheld. They will let you know when to give them the money.

MODERN TAX RETURN

Tax time is now more challenging than it once was. Accounting software can do much of the tedious work, making filing times easier for your accountant or bookkeeper. For example, accounting software can estimate the amount of tax owed and quickly generate the reports needed to complete a tax return. These efficiencies make any tax season less stressful and less expensive.

Since accounting software records all the money coming in and out of your business, it can quickly perform calculations to estimate your taxes.

COMMERCIAL COMPANY LAW ACCOUNTING SUPPORT AND BOOKKEEPING

Any business needs to maintain accurate corporate tax accounting according to the rules in force in the United Arab Emirates. If this principle is applied, businesses can stabilize cash flow, prevent bankruptcy, and enable good long-term financial plans and forecasts. To ensure that the company keeps the books required by law, partners or shareholders must have access to the necessary data.

  • ACCOUNTING BOOKS

Business accounting records must be kept at the company’s headquarters in the United Arab Emirates for at least five or more years after the end of the financial year. After that, businesses use electronic storage of records and documents subject to restrictions set by competent authorities. In addition, for shareholders to have a complete and accurate picture of the company’s financial position, annual and quarterly reports must be prepared following international accounting standards and practices.

  • THE ACCOUNTANT’S OBLIGATION TO PREPARE FINANCIAL STATEMENTS

The manager’s job is to create an effective profit and loss budget for each year. In addition, within three months from the end of the financial year, the management must report on the company’s financial position and propose to the General Assembly the distribution of profits. If the manager fails to perform the required duties, he may be forced to pay damages or even be fired.

WHAT ARE THE LEGAL IMPLICATIONS OF FINANCIAL STATEMENTS IN THE UNITED ARAB EMIRATES?

Whether preparing financial statements and bookkeeping for value-added tax or corporate tax purposes, illegal conduct is subject to the following types of penalties:

Lack of proper accounting records on profit distribution

Tax experts say all businesses must establish and maintain accounting records following federal law. This mainly focuses on distributing legitimate profits among the various shareholders and partners. 

Failure to keep the necessary records of legal distribution, or if illegal distribution is found, will inevitably result in fines ranging from AED 50,000 to AED 500,000 and up to 3 years imprisonment for unlawful conduct. 

 

PROVIDING FALSE FINANCIAL STATEMENTS 

Businesses should maintain relevant head office accounting records in their purest form, including accurate loss, profit, and balance sheet data. If the liquidator, auditor, or company manager gives false information or makes a false statement, they can be imprisoned for up to 3 years. In addition, companies that do not keep accurate and transparent financial statements will be fined between 100,000 and 500,000 AED.  

840 thoughts on “What Are the Steps for Preparing Accounting and Bookkeeping for UAE Corporate Taxes?”

  1. 20bet

    Apoiar ferramentas de apostas e estar equipado com uma plataforma diversificada de transações financeiras, a 20Bet oferece suporte tangível aos jogadores. Este é um lugar onde eles podem apostar com dinheiro real, respaldados por concorrentes de diversas disciplinas esportivas. 20bet

  3. Pingback: Streamline Finances: Essential Bookkeeping Services in Dubai

  236. nut

    Please note that online reservations are temporarily suspended.We apologize for any inconvenience. Very very upset me and my family all play this and I have contacted your customer support a few times in 3 days and no reply. Im about to delete this game. Me and my family have spent quite abit of money on this game and lost coins do to glitch. Was playing a bonus betting 300 million on kanagroos and got the 4x diamond multiplier and almost 40 spins and came back and it was gone. It costed me like 25 billion plus in coins. Plus its impossible to comp missions if you have to start over. ⑥ Enjoy playing Cash Tornado™ Slots – Vegas Casino Slots on your PC with MuMu Player Sneak a peek at the huge varieties of slots collection and larger-than-life jackpot from Cash Tornado Casino!
    https://kylerioac841852.develop-blog.com/28917433/latest-casino-bonuses-no-deposit-bonus
    ESCAPETOGETHER bonus terms: 240% match bonus holds 15x playthrough requirements and no limits on cashout. Will redeem unlimited times. Min deposit of $50. If you are Planet7 casino VIP player – then you are entitled to 290% no rules bonus instead. VIP code: VIPESCAPE. This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

  835. Rastrear teléfono

    Instalación simple y descarga gratuita, no se requieren conocimientos técnicos y no se requiere raíz.Grabacion de llamadas, Grabacion de entorno, Ubicaciones GPS, Mensajes Whatsapp y Facebook, Mensajes SMS y muchas características mas.

  836. Rastrear Teléfono Celular

    Algunos programas detectarán la información de grabación de la pantalla y no podrán tomar una captura de pantalla del teléfono móvil. En este caso, el monitoreo remoto se puede usar para ver el contenido de la pantalla de otro teléfono móvil.

  839. RAK

    Come and try out Gossip Slots Casino with 60 Free Spins No Deposit Bonus on the “Robin in the Woods” slot. Gossip Slots is offering this special treat to new members, so grab bonus code FREECOINS, use it on registration and get rewarded with 60 Free Spins right away. Nosso químico Rafael Lins, especialista em controle de pragas, deu uma entrevista ao vivo no Bom Dia SP da Rede Globo para dar dicas de como evitar infestação de roedores. As in the Gossip Slot Casino chat rooms, there are real people behind the customer support. The English speaking team can be reached the fastest via the live chat option, which can be found easily on the website. In addition, you may give them a call using an international support number or the toll-free US number. There are a few email addresses available, so you can direct your question to the correct department from the start. Gossip Slot Casino phone numbers and live chat is open every day from 10:00 in the morning until midnight EST. At other times you may contact the team by email.
    https://milosmaz468911.xzblogs.com/62775204/free-thunderstruck-2-slots
    •DIAMOND “NUDGE” FEATURE MOVES DIAMOND SYMBOLS UP OR DOWN TO PAYLINE! Page updated : 08 Apr 2024, 05:21 There are certain games that are pretty amazing by their pure simplicity. One great example is the Double Diamond mechanical 3-reel slot, a workhorse for decades on many a casino floor. The IGT S2000 slot machine is probably the most recognizable slot machine in the world due to its wide distribution and the movie industry. Most casinos today will have these on the game floor. The IGT S2000 remains a favorite of “reel machine” enthusiast worldwide. IGT S2000 slot machines are a must have for any floor and are also one of the lowest cost slots available now. Copyright © 2021, USEDSLOTMACHINES.NET With 68 tables, our poker room is bigger than any in Vegas, and holds the crown for Arizona’s biggest!

Leave a Comment

Your email address will not be published. Required fields are marked *

Finance Monkey is a Finance-Managing company. Finance Monkey deals in a wide array of services. This includes providing you with a basic book-keeper to a Finance Manager who will help manage each and every penny that flows in or out of your business.

Useful Links

Accounting Services

Contact Us

Office 309 – Fifty One Business Bay – Business Bay – Dubai
Phone: +971 4 338 7348
Phone: +971 58 987 9744
E-Mail: info@financemonkey.ae
Web Site: www.financemonkey.ae

Finance Monkey 2014 – 2023 | Powered by Digital Monkey.
Facebook Linkedin Instagram
Scroll to Top