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Tax Consultants & Bookkeepers in the UAE

        

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UAE private sector gets ready for new Corporate Tax, say officials at CS Events’ UAE Corporate Tax Forum

The UAE’s business community is waiting for the new UAE Federal Corporate Tax Law which will help the companies to start preparing for the new corporate tax regime, officials said at the UAE Corporate Tax Forum organised by Cogent Solutions Events Management (CS Events) at Dusit Thani Hotel recently.

The UAE Government in January this year said, it will introduce 9 per cent corporate tax on businesses with net profits of more than Dh375,000 starting from June, 2023, about five-and-a-half years after the introduction of the 5 percent Value-Added Tax (VAT) in January 2018. This requires companies to make provision for proper accounting system and issue annual financial audit reports, based on which the Corporate Tax will be calculated. Companies will then have to file the audited financial report for corporate tax with the UAE Federal Tax Authority (FTA).

The total revenue distributed at the state level in the UAE for VAT has amounted to over Dh95.4 billion (US$26 billion), since its implementation in 2018 till October 2021.

The Government has so far issued a Public Consultation Document on the subject. The new UAE Federal Corporate Tax Law, that will govern the Corporate Tax regime, is yet to be issued. Officials at the UAE Corporate Tax Forum said, the law could be issued as early as this month, or latest by October this year. Read more..

Corporate Tax News and F.A.Q's

D16) Are there any consequences for non-compliance under the Corporate Tax regime?

Similar to other taxes in the UAE (e.g. VAT), businesses will be subject to penalties for non-compliance with the Corporate Tax regime. Further information on the UAE Corporate Tax compliance obligations and applicable penalties will be released in due course

Expert VAT Opinions

A60) By mistake I did not add VAT to some sales invoices in my last return. What should I do?

As long as the omission resulted in underpaid VAT of less than Dh10,000, you can just include the invoices in your next return, effectively catching up on your payable tax. You can only do this if your missed invoices total less than Dh210,000.

If the missed invoices total more than this amount, then you need to submit a voluntary disclosure to the FTA and pay the under reported VAT separately from the usual return process. Read more...

FTA Press Releases

Majalis Abu Dhabi at the Presidential Court hosts an awareness session on FTA’s procedure for refunding VAT to UAE Nationals on building new residences

As part of the lecture series at Majalis Abu Dhabi at the President’s Court, the Federal Tax Authority (FTA) held an awareness session that was broadcast live on Majalis Abu Dhabi’s Instagram account on the procedure for UAE nationals to recover the Value Added Tax (VAT) incurred on building their new residences.

The session was held remotely, bringing Emirati citizens together with a team of experts from the FTA who explained the process for refunding VAT to UAE citizens on the construction of their new residences.

Speakers at the session clarified the steps to take in order to recover VAT through the FTA’s e-Services, starting with submitting the refund request with all supporting documents, all the way to receiving the refund amount by bank transfer to the applicant’s account, upon informing them of the final approval.

During the session, the FTA’s team of experts outlined the criteria for submitting a request for refund of the VAT incurred on the construction of new residences by UAE citizens, explaining the steps needed to create and verify an e-Services account for new users, as well as how to create a special refund requests account, submit and track a refund request, the deadline for submitting a request, and the required documents. They also highlighted which potential applicants are eligible to recover VAT on their new homes, as well as which taxes are refundable. Read more..

Authorities foreclose Dubai-based establishment for violating regulations and trading tobacco products unmarked with Digital Tax Stamps

The Federal Tax Authority (FTA) carried out an inspection campaign in collaboration with the General Department of the Federal Criminal Police at the Ministry of Interior and Dubai Police General Headquarters – represented by the General Directorate of Criminal Evidence and Criminology (Department of Anti-Economic Crime) – which led to the foreclosure of a commercial establishment in the Emirate of Dubai that was trading tobacco products unmarked with Digital Tax Stamps.
 
In a press statement issued today, the FTA revealed that all products in violation at the establishment were confiscated – a total of 5,430,356 packs with AED91,833,016.40 in due taxes. The Authority implemented the necessary legal measures against the non-compliant establishment, as part of its efforts to strengthen control over markets in order to combat tax evasion, promote tax compliance, and protect consumers.

The Authority indicated that the joint campaign forms part of its continuous efforts to monitor the market, in collaboration with the relevant authorities. Read more..

FTA intensifies its efforts by increasing inspection visits 104% in 6 months

The Federal Tax Authority (FTA) significantly expanded its efforts in collaboration with various government departments, ministries and authorities to protect consumers from non-compliant products, combat tax evasion, and ensure compliance with tax legislations and procedures.

During the first half of this year, the FTA carried out 9,948 inspection visits in local markets across the country in collaboration with the Ministry of Economy, the Federal Authority for Identity, Citizenship, Customs, and Port Security and various departments of Economic Development across the country.

Inspections conducted in the first half of 2022 increased by 104 percent compared to 4,878 inspections conducted in 2021 in the same period.

In a press statement issued today, the Authority confirmed that the campaigns come within the framework of its keenness to strengthen market control through intensified market inspections across all the emirates.  The FTA’s plans aim to ensure laws, legislation and tax procedures are followed to guarantee the protection of the national economy, provide the highest levels of protection for consumers, combat commercial fraud and prevent the trade of inferior and counterfeit products that harm public health and the national economy. 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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