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Tax Consultants & Bookkeepers in the UAE

        

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UAE Ministry of Economy extends anti-money laundering compliance date for four business categories

The UAE’s Ministry of Economy has extended the grace period until March 31 for certain business categories to be in full compliance with anti-money laundering and prevention of terrorism financing.

Businesses that fail to do so will face fines range from Dh50,000 to up to Dh1 million and can be raised to Dh5 million based on the provisions of the law and according to the assessment of the Supreme Committee for Combating Money Laundering, and Financing of Terrorism and Illegal Organizations.

This applies to activities in four categories - brokers and real estate agents, dealers of precious metals and gemstones, auditors, and corporate service providers. Read more..

Expert VAT Opinions

A47) Can a company de-register from VAT without paying existing fines?

You cannot de-register from VAT without paying the fines first.

To solve this, you must submit the missed returns on the Federal Tax Authority portal immediately. Even if they are zero returns, this needs to be done to avoid further charges. I advise paying the existing fines, then completing a reconsideration form asking the FTA to waive the fines imposed.

The form can be found on the FTA website, but the form and all supporting documentation must be submitted in Arabic. To apply for reconsideration and de-registration, the FTA says you must have paid any outstanding tax and penalties first. Read more...

FTA Press Releases

FTA continues Inspection Campaigns in Local Markets to Ensure Compliance

The number of inspection campaigns organized by the Federal Tax Authority (FTA) witnessed notable growth during 2020 across UAE markets, some were conducted in collaboration with Departments of Economic Development and other relevant entities throughout the Emirates, to protect consumer rights and increase the level of tax compliance.

 In a press statement issued today, the Authority emphasized that these campaigns were carried out within the framework of the Authority's extensive efforts to contribute towards strengthening market performance and ensuring compliance with all tax legislation and procedures to protect legitimate trade and prevent the sale of contraband within the UAE and tax evasion. Read more..

FTA issues a public clarification regarding VAT registration of ‘Sole Establishments’

The Federal Tax Authority (“FTA”) clarified that a natural person owning a number of sole establishments may only obtain one tax registration for all its sole establishments, and not a registration for each establishment separately.

The FTA indicated that a sole establishment (also referred to as sole proprietorship) is a legal form of business which is 100% owned by a natural person, and a sole establishment does not have a legal personality independent of its owner, as the sole establishment and its owner are considered to be the same person.

This announcement was issued in a new public clarification regarding the registration of ‘sole establishments for the purposes of VAT within the framework of the public clarification service provided on the FTA website. These public clarifications aim to familiarize persons with the tax aspects which need simplified explanations, enabling them to apply the tax principles accurately and efficiently. Read more..

3 years of achievements since the introduction of VAT

During 2020, the Federal Tax Authority has maintained ever-increasing performance rates and has continued to implement its development projects across all areas of its work in accordance with its target plans.

 His Excellency Khalid Ali Al-Bustani, Director General of the Federal Tax Authority - in a press release issued today marking the third anniversary of VAT application -  has confirmed that for the third consecutive year, the FTA continued to achieve rising performance rates while continuing its efforts to manage, collect, and implement federal taxes with procedures and mechanisms distinguished by their ease of use, transparency, and clarity through its modern electronic systems, pointing to the high compliance rates among taxable persons in light of the greatly increased awareness in business sectors, and the ease and flexibility of the procedures.

 His Excellency said: “During 2020, the Authority maintained increased results, with preliminary statistics showing that the number of registrants for VAT increased to 332.39 thousand registrants of business and Tax Groups and its members, compared to about 312,000 registrants at the end of 2019 and 296,000 registrants at the end of 2018 (the first year of VAT).” Read more..

Maintenance of Financial records under VAT

As per Decree-Law, all businesses in the UAE need to record their financial transactions and ensure that their financial records are accurate and up to date. The final responsibility and accountability to comply with VAT is on the business.

Accounting Records and Commercial Books

As per Executive Regulations of Federal Law No. (7) on Tax procedures, Accounting Records and Commercial Books shall include the following:

  • Accounting books in relation to that Business, which include records of payments and receipts, purchases and sales, revenues and expenditures, as required under any Tax Law or any other applicable law, including:
    • Balance sheet and profit and loss accounts.
    • Records of wages and salaries.
    • Records of fixed assets.
    • Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.

Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case the authorities need to establish whether they should be registered.

Contact Finance Works to maintain your books and records and implement financial systems that are VAT ready and compliant.

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