FAQ

Accounting is the concept used so that the company tracks the financial documents, organizes them, and knows them. It show you whether you earn a profit or not, what your cash balance is, what the company’s assets and liabilities really are worth, and which aspects generate profits.

YES! It is good to outsource them. Small businesses in UAE face many challenges in the early stages of their business. This service usually comprises everything from the day-to-day transaction coding, accounts receivable and payable, payroll and taxation to managing financial reporting. Hiring a full time accountant is very costly in UAE as business needs to provide them with company visa, health insurance, travel ticket and monthly salary along with the integration of a suitable accounting software. Businesses in UAE can avoid all this cost by just outsourcing accounting services for their small business in Dubai, UAE.

As per Federal Tax Authority (FTA), companies or individuals having annual turnover of AED 375,000 or more must apply for VAT registration and must get Tax Registration Number (TRN) in order to run business in UAE. They must implement VAT and must collect VAT on behalf of FTA. This is called Mandatory VAT registration in UAE.

As per Federal Tax Authority (FTA), companies or individuals having annual turnover of more than AED 187,500 but less than AED 375,000 can voluntarily apply for VAT Registration and they get Tax Registration Number (TRN) voluntarily. It is totally up to the company if they want to register or not. In both cases, there will not be any issue.

VAT Refunds will be made after the receipt of the application and subject to verification checks, with a particular focus on avoiding fraud.

Supplies made by government entities will typically be subject to VAT. This will ensure that government entities are not unfairly advantaged as compared to private businesses. Certain supplies made by government entities will, however, be excluded from the scope of VAT if they are not in competition with the private sector or where the entity is the sole provider of such supplies. It is likely that certain government entities will be entitled to VAT refunds. For the supplies provided for government entities, the treatment of such supplies shall depend on the same supply and not on the recipient of the supply. Therefore, if the supply is subject to the standard rate, the treatment would remain the same even if it is provided to a government entity.

Any taxable person or a business must retain VAT invoices issued and received for a minimum of 5 years. There is a certain template or a VAT invoice format which all the businesses must follow to ensure VAT compliance.

VAT is due on the goods and services purchased from abroad. In case the recipient in the State is a registered person with the Federal Tax Authority for VAT purposes, VAT would be due on that import using a reverse charge mechanism. In case the recipient in the State is non-registered person for VAT purposes, VAT would need to be paid before the goods are released to the person.

Taxable Persons or Businesses must file VAT returns with the FTA on a regular basis, within 28 days of the end of the Tax Period. The Tax returns shall be filed online using e-Services.

UAE set to impose 9% corporate tax starting June 1, 2023. Corporate Tax in UAE will be applied on the adjusted accounting net profits of a business above 375,000 AED. Businesses will only need to file one corporate tax return each financial year and will not be required to make advance tax payments or prepare provisional tax returns.

9% for taxable income above AED 375,000.

Even if the free zone company is designated as a Qualifying Free Zone Person (QFZP), the need to file for corporate tax will remain the same.

The UAE Corporate tax registration applies to all businesses whether they are subject to 0 percent or 9 percent corporate tax. The following documents required for Corporate Tax Registration in UAE.
•Copy of Trade License (must not be expired).
•Passport copy of the owner/partners who own the license (must not be expired).
•Emirates ID of the owner/partners who owns the license (must not be expired).
•Memorandum of Association (MOA) – Or – Power of Attorney (POA)
•Concerned person’s contact details (Mobile Number and E-mail).
•Contact details of the company (complete address and P.O. Box).
•Corporate Tax Period.

Samples of excise goods that are given away for free will also be subject to excise tax. Excise tax is not a transaction based tax so tax is due on the goods when they are released for consumption (i.e. enter free circulation) in the UAE, regardless of whether or not they are intended for sale.

The following goods are subject to excise tax in UAE at the following rates of tax:

Excise Goods
Tobacco products
Energy drinks
Carbonated drinks (excluding sparkling water)
Excise tax has also been levied on electronic cigarettes (e-cigarettes), electronic liquids (e-liquids), and many other soft drinks.
Excise tax rates
-50% excise tax on carbonated drinks.
-50% excise tax on any product with added sugar or other sweeteners.
-100% excise tax on tobacco products.
-100% excise tax on energy drinks.
-100% excise tax on electronic smoking devices.
-100% excise tax on liquids used in such devices and tools.