Federal Decree- Law No. (18) of 2022 (‘’the Amendment of VAT Law w.e.f January 01, 2023’’)

VAT

Federal Decree- Law No. (18) of 2022 (‘’the Amendment of VAT Law w.e.f January 01, 2023’’)

Summary of VAT amendments:

Article Number Title VAT Amendments
Article 1  Definitions New definitions have been introduced for –

Relevant Charitable Activity, Pure Hydrocarbons, Tax Evasion, Tax Audit, Tax Assessment and Voluntary Disclosure.
Article 5 Supply of Goods Entry into a contract between more than two parties entailing the transfer of Goods at a later time will be considered as supply of goods as per new amendment.
Article 7 Other out-of-scope transactions A new clause inserted which allows the Executive Regulations to stipulate any other transactions that can be considered outside the scope of VAT.
Article 15 Registration Exceptions Exception to register from tax is now extended to include registered persons having 100% zero rated supplies, in addition to non-registered persons.
Article 21  Cases of Tax Deregistration New amendment grants the Federal Tax Authority, the right to deregister any registered person if they assume that the taxable person’s VAT registration may cause any harm to the tax system.
Article 26 Special Date of Supply The date of supply under Clause 1 now includes the date on which one year has passed from the date on which the goods or services are provided.
Article 27 Place of Supply of Goods (continuous supply) As per new clause, place of supply of goods that include export or import will be inside UAE if Article 26(1) applies AND the ownership of the goods has been transferred inside the UAE.
Article 30 Place of Supply in Special Cases (transport-related services) Clause is extended to include transport related services in the rule of special place of supply. Place of supply means place where transportation starts.
Article 33  Place of residency (Agent/Principal) The place of residence of principal will be the place of residence of the agent as per changed clause.
Article 36 Value of Supply and Deemed Supply for Related Parties Where a deemed supply occurs between related parties, the value of supply would be determined by the market value, as per amended law.
Article 45 Supply/Import of Goods and Services that are Subject to Zero Rate Import of following added to the zero-rated list

·         means of transportation and goods related to means of transportation

·         rescue planes and ships

·         crude oil and natural gas

·         Related basic healthcare goods.

·         investment precious metals (if they are supplied or imported for investment purposes.)
Article 48 Reverse Charge Reverse charge will apply to “Pure Hydrocarbons” instead of “any form of hydrocarbons”
Article 55 Recovery of Recoverable Input Tax in the Tax Period (Imports) The first condition of the Article for recovery of input tax as per the reverse charge mechanism is amended with the addition to keep invoices and import documentation (i.e. for goods only) for the importation of goods or services.
Article 57 Recovery of tax by Government Entities and Charities Government entities can recover tax if incurred for the provision of sovereign activities.

charitable organisation can recover tax if incurred for the provision of relevant charitable activities.
Article 61 Instances and Conditions for Output Tax Adjustments (additional case) Clause inserted which requires taxable person to adjust output tax after the date of supply not only if the tax was charged in error but also if the application of the tax treatment was incorrect (e.g., where it was treated as exempt/zero rated instead of taxable at 5%)
Article 62 Mechanism for Output Tax Adjustment Tax credit note must be issued within 14 days from the date of occurrence.
Article 65 Conditions and Requirements for Issuing Tax Invoices (obligation to pay VAT) It has made mandatory for the taxable person to pay the VAT to the Federal Tax Authority in cases where such person issues a tax invoice stating VAT on it or receives an amount as VAT.
Article 67  Date of Issuance of Tax Invoice (for continuous supplies) Now it has been specified that the date of issuance of tax invoice under continuous supply will be 14 days from the date of the supply.
Article 79 bis Statute of Limitations (new article) ·         The statute of limitation of 5 years not applicable where FTA has issued a notice to audit, provided audit is completed within 4 years from notice date.

·         statute of limitation will be extended by one year if taxable person files voluntary disclosure in 5th year.

·         Voluntary disclosure cannot be filed by the taxable person after the lapse of 5 years.

 

Are you looking for an audit and accounting solution in Dubai?

Auditing

Businesses in Dubai are required to keep a consistent Book of Accounts. If your company lacks a professional team to manage its records and finances, you may get charged with incorrect Bookkeeping and VAT return filing. Regardless of your business size, accounting is critical for decision making, budget and cost planning, and monitoring economic performance. And hence you need Accounting Firms In Dubai.

What are the Accounting Procedures?

There are two main types of accounting:

 

1. The Accrual Accounting Method

Revenue is recognised as it is earned, and expenses are recognised as they are incurred. The accrual method is considered the most theoretically correct, but it requires extensive accounting knowledge, so it is more likely to be used by larger organisations. Nevertheless, this method is ideal for publicly traded companies and businesses that want to have their financial statements audited.

 

2. Cash Accounting Method – Revenue is recognised when customers pay in cash, and expenses are recognised when suppliers pay in cash.

 

There is also a hybrid accounting method, which combines the accrual and cash methods. In exceptional circumstances, this may be acceptable, but it will not result in auditable financial statements.

 

Why Choose RBS Auditing Firm?

inexpensive Services – When you hire Accounting Services In Dubai, you will only have to pay a fixed monthly fee that is tailored to your company’s specific needs. This is more cost-effective than hiring a dedicated or full-time accountant in-house. You will spend this money on their monthly salary, travel expenses, OT benefits, etc.

Adaptability and time savings – By outsourcing your accounting and bookkeeping functions to RBS Auditors, you can focus on more important tasks like business development, saving you valuable time. In addition, we can come to your office and work on your book of accounts based on your preferences and schedule.

Advantage of Expertise – You benefit from the expertise of RBS’s team of professionals who are certified accountants.

scalability – When faced with increased production, your company can grow within the context of business strategy without being hampered by its structure or available resources.

 

Contact us if you are professionally or personally considering a thriving future. Regarding Audit Firms In UAE, accounting, taxes, or business consulting, we have a team of dedicated accounting specialists on hand, and one phone call can make all the difference.

Best Accounting Firms Dubai | rbsauditing

Accounting

RBS auditing is the parent company of the complete Accounting & accounting Services, which functions because the accounting unit, and hired Accountants function because of the audit unit. Accounting corporations In the urban center are passionate once it involves delivering the most Accounting Firms In Dubai to our customers.

Accounting Firms In Dubai

 

We have services like –

  • Accounting services
  • Auditing and Assurance services
  • VAT services
  • Accounting code
  • Payroll accounting services
  • Business services

 

Our quality accounting, auditing, and business consulting services provided to purchasers across the UAE are tailored to accomplish their business goals and economic prospects with more significant gain. From Business consultatory Services to Tax Auditing, RBS auditing offers an effective form of services to AN inclusive people. Supercharged by a gaggle of pros, UN agencies aren’t simply skillful; however, conjointly addicted to the services they surpass, RBS auditing can give the most effective expertise and results.

Due Diligence, Feasibility Study, and formulating tax methods which will facilitate cutting back your liabilities and improve your revenue. We are amongst the most famous consultancies for accounting outsourcing corporations in UAE, consisting of a team of most acceptable auditors and Business consultants that keeps reliable & up to this point knowledge of monetary statements serving to you to coordinate well with laws. And that we FTA Certified Accounting Firm and FTA Registered Vat Consultants providing excellent quality of professional Tax Agents in Dubai.

Also Read: Professional Auditing Services In Dubai

 

Benefit from Our World-Class Accounting and accountancy firm in Dubai, UAE

We are one of the sure and recognized accounting firms across UAE. We cater to diverse business sectors and industries, from welcome, healthcare, retail, provision, production, and distribution. This applies of holding the documentation a few business’s fund functioning is currently turning into as necessary as a spine, due to enlarged dependency upon processed programs and therefore the critical observation being done on business transactions originating from heightened restrictive laws and coverage courses of action. Documentation or maintaining knowledge has become more subtle in how knowledge is recorded and kept owing to new techniques and technologies within the market. As way as maintaining records becomes vital, additional facilities are being provided by accounting firms like RBS . we tend to continuously try to urge the foremost for our shoppers.

Being one of the highest audit corporations in urban centers and across the UAE, we offer progressive accounting and audit solutions to assist purchasers in growing and expanding their businesses with success. RBS auditing consultants supply comprehensive benefits, and Accounting, Auditing, VAT-related services, corporate executive services, accounting, Due Diligence, and a great deal additional to support businesses befits the UAE tax and accounting laws. All our services are designed and dead with the uppermost priority of Ethics. While not compromising quality and ethics, RBS auditing will deliver the most effective accounting and accounting services in the urban center. Once it involves selecting an Accounting Services In Dubai, RBS auditing is the prime alternative as we’ve consultants to resolve any entirely monetary challenges in business.

 

UAE to introduce 9% corporate tax on business profits from June 1, 2023

corporate-tax

Ministry of Finance to introduce federal corporate tax on business profits, effective for financial years starting on or after 1 June 2023

ABU DHABI, 31st January, 2022 (WAM) — The Ministry of Finance has announced that the UAE will introduce a federal corporate tax on business profits that will be effective for financial years starting on or after 1st June 2023. Businesses will become subject to UAE corporate tax from the beginning of their first financial year that starts on or after 1st June 2023.

The UAE corporate tax regime has been designed to incorporate best practices globally and minimise the compliance burden on businesses. Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments. The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.

With a standard statutory tax rate of 9 percent and a 0 percent tax rate for taxable profits up to AED375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world.

No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE.

“As a leading jurisdiction for innovation and investment, the UAE plays a pivotal role in helping businesses grow, locally and globally. The certainty of a competitive and best in class corporate tax regime, together with the UAE’s extensive double tax treaty network, will cement the UAE’s position as a world-leading hub for business and investment”, said Younis Haji Al Khoori, Undersecretary of the Ministry of Finance.

Younis Haji Al Khoori further adds that “with the introduction of corporate tax, the UAE reaffirms its commitment to meeting international standards for tax transparency and preventing harmful tax practices. The regime will pave the way for the UAE to address the challenges arising from the digitalisation of the global economy and the other remaining BEPS [Base Erosion and Profit Shifting] concerns, and execute its support for the introduction of a global minimum tax rate by applying a different corporate tax rate to large multinationals that meet specific criteria set with reference to the above initiative.”

Recognising the contribution of free zones to the UAE’s economy and competitiveness, the UAE corporate tax regime will continue to honour the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE.

Given the position of the UAE as a global financial centre and an international business hub, the UAE will not impose withholding taxes on domestic and cross border payments, or subject foreign investors who do not carry on business in the UAE to corporate tax.

As an international headquarter location, a UAE business will be exempt from paying tax on capital gains and dividends received from its qualifying shareholdings, and foreign taxes will be allowed to be credited against UAE corporate tax payable.

The UAE corporate tax regime will have generous loss utilisation rules and will allow UAE groups to be taxed as a single entity or to apply group relief in respect of losses and intragroup transactions and restructurings.

The UAE corporate tax regime will ensure the compliance burden is kept to a minimum for businesses that prepare and maintain adequate financial statements. 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. Transfer pricing and documentation requirements will apply to UAE businesses with reference to the OECD Transfer Pricing Guidelines.

“The introduction of a corporate tax regime will help the UAE achieve its strategic ambitions and incentivise businesses to establish and expand their activities in the UAE,” said Younis Haji Al Khoori.

UAE businesses will be given ample time to prepare for the introduction of corporate tax in the UAE. The UAE Ministry of Finance plans to issue further information on the UAE corporate tax regime toward the middle of the year to help businesses get ready and be fully compliant.

*For further information, please visit the Federal Tax Authority website: https://tax.gov.ae/en

Courtesy:-  https://wam.ae/en

For the right bookkeeping services, always hire Accounting Firms In Dubai

Accounting-Firms
An accountant is an expert who is liable for keeping and deciphering monetary records. Most Accounting Firms In Dubai are answerable for a wide scope of money-related errands, either for singular customers or for bigger organizations and associations utilizing them.
A few different terms are regularly examined related to the expression “bookkeeper,” which can prompt disarray on what this vocation involves. For instance, “bookkeeper” and “clerk” are phrases that are some of the time utilized conversely, yet there are a few key contrasts between these work titles.
Regularly, Accounting Firms In Dubai will have procured something like a partner degree and spotlight on recording monetary exchanges. Accountants, then again, will have normally procured no less than a four-year certification in bookkeeping and are entrusted with deciphering monetary data instead of essentially assembling it.

To put it plainly, accountants can be clerks; however, not all accountants will be accountants.

Also, a confirmed public bookkeeper (CPA) is a bookkeeper who has finished the CPA test and has met state authorizing prerequisites. Thus, all CPAs are accountants, yet not all accountants are CPAs.

Accounting is a wide term that envelops numerous diverse occupation titles and jobs inside associations. There are three principal sorts of accountants—public accountants, executives accountants, and government accountants—all of which center around various calling parts. Interior and outer examiners are additionally firmly related.

Jobs and Responsibilities

Albeit the day by day obligations of Accounting Services In Dubai will shift by position and association, the absolute most normal undertakings and duties of accountants include:
  • Ensuring the precision of monetary reports, just as their consistency with important laws and guidelines
  • Preparing and keeping up with significant monetary reports
  • Preparing assessment forms and guaranteeing that charges are paid appropriately and on schedule
  • Evaluating monetary tasks to suggest best-rehearses, recognize issues and plan arrangements, and help associations run effectively
  • Offering direction on cost decrease, income improvement, and benefit augmentation
  • Conducting determining and hazard investigation appraisals

UAE AMENDED SOME ADMINISTRATIVE PENALTIES FOR VIOLATION OF TAX LAWS IN THE UAE

UAE Tax penalty
Cabinet Decision No. 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE
In accordance with Cabinet Decision No 49 of 2021 on Amending some Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE, which will be effective from 28 June 2021, the FTA would like to inform you that it has released two Public Clarifications, which you can view on the FTA website.
With respect to TAXP002, and if you had any outstanding balances, you would have previously been able to see such outstanding balance on the returns page. From Wednesday 23 June, you will be able to see how much of your balance is related to tax and how much is related to administrative penalties on the My Payments page when you log into E-Services. This link will open a window that will include the following:
  • Tax Payable – this is the outstanding tax balance (based on tax returns you submitted and any adjustments due to voluntary disclosures or tax assessments) and will be updated on a daily basis until 31 December 2021, for you to know how much tax is outstanding and is subject to late payment penalties if not settled by payable date, and needs to be settled in full before 31 December 2021 to benefit from the redetermination of administrative penalties in accordance with Cabinet Decision No 49 of 2021.
  • Late Registration Penalty – this is the outstanding unpaid late registration penalty, if available.
  • Other Penalties Payable – this is the outstanding unpaid administrative penalties balance (other than late registration) and may increase if new administrative penalties are applied or decrease if payments are made or penalty reversed. The balance on 28 June 2021 will be subject to redetermination if conditions stated in Cabinet Decision No 49 of 2021 are met.
  • Net Payable Amount – this is the total amount of Tax Payable and Penalties Payable outstanding at any time.
  • Total Credit – this is the amount of credit that the registrant has with the FTA. FTA will be launching a full dashboard with your Tax Payable and Administrative Penalties

RECEIVED PENALTIES FOR NON-SUBMISSION OF ESR REPORT?!. FILE AN APPEAL

ESR-Notification-UAE
Received Penalties For No-Submission Of ESR Report?!. File An Appeal
Did you successfully submit the Economic Substance Notification & Economic Substance Report of your company to the Ministry of Finance?
Did you successfully submit the Economic Substance Notification & Economic Substance Report of your company to the Ministry of Finance?
Did you get any response from the authority is after that?
Many licensees in the UAE have come across penalty emails from the Ministry of Finance.

Did you get any such penalty email?

If yes, do you know how to resolve the issues? In order to resolve such issues, we should know exactly the reason for receiving such a penalty ticket from the Authority. We have listed down some of the reasons why you might have received penalty emails
Situation in which Economic Substance Notification is submitted declaring a Specific Relevant Activity. Later the Economic Substance notification amendment was filed that it is not covered in Relevant activity neither earning relevant income in the Economic Substance Notification.
In this case, the company need not submit the Economic Substance Report. But the approval for Amendment on Economic Substance Notification might have taken the time and by then the Economic Substance Report Tab becomes active.
Economic Substance Report was not filed since it is not carrying relevant activity . Still, the penalty ticket may raise.
How to waive off the penalties generated from situations like above?
In the above-given scenarios, the Licensee or Exempted Licensee will have the option to Appeal.
Article 13 & 14 of the Economic Substance Regulation provides the offences & penalties for failure to provide Notification and Report, respectively. The administrative penalty will be levied on that Licensee or Exempted Licensee who fails to submit Notification & Report (wherever applicable) as below: Failure to submit Penalty Amount
Failure to submit
Penalty amount
ECONOMIC SUBSTANCE REGULATION [ESR] Notification
AED 20,000
ECONOMIC SUBSTANCE REGULATION [ESR] Report
AED 50,000
If there is a delay in submitting Economic Substance Notification or Economic Substance Reports, and if such delay is because of the ignorance of the Law, the chance of getting approval for waiving off the penalty cannot be assured through an appeal.
But there are genuine cases as mentioned at the beginning of this article, where the penalty can be appealed and removed. We are happy to resolve your issues by submitting the Appeal to the Authority.

VAT REGISTRATION OF ‘SOLE ESTABLISHMENTS’ CLARIFICATION VATP026 REPLACES PUBLIC CLARIFICATION VATP021

vat-registration

VAT registration of ‘Sole Establishments’ clarification:- VATP026 replaces Public Clarification VATP021.

A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration.
This Public Clarification clarifies the VAT registration obligations of a person in respect of its sole establishments. Note that the term “person” refers to a natural or legal person.
A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments, and it is not permissible to register each sole establishment separately for VAT. The Federal Tax Authority (‘FTA’) will review, in certain cases, the VAT registrations by taxable persons in respect of sole establishments and will inform them of the corrective steps to be taken, if any.
For further clarification visit us at:- www.rbsauditing.com .

THE UAE’S MINISTRY OF ECONOMY HAS ASKED ALL COMPANIES IN THE COUNTRY TO SUBMIT AUTHENTIC DETAILS OF THEIR BENEFICIARIES BEFORE JUNE 30, 2021 TO AVOID PENALTIES

anti Money_Laundering

All UAE companies required to submit UBO details before 30th of June 2021

An initiative of the UAE government to combat against activities related to terrorist financing and money laundering, Cabinet Decision (No 58) of 2020 on Regulation of Procedures for Real Beneficiary requires all companies to maintain a register and submit relevant details of their Ultimate Beneficial Owners (UBO)
Ministry of Economy has set its deadline for submission of UBO details of all companies under its jurisdiction for the 30th of June 2021.

Fine & Penalties up to AED 100,000

All companies in UAE failing to submit UBO details on or before the deadline will be imposed with administrative sanctions face penalties of up to Dh100,000 from July 2021.
Importantly, the company’s licence can also be suspended for a year for not conforming to the instructions of the ministry.
Details to disclose with the authority are as follows:
  • Details of ownership
  • Details of all Ultimate Beneficial Owners
  • Company business model
  • Company financial records
  • General information including the details of the company from lawyers, banks, and auditors
A real beneficiary or UBO is the natural person controlling or owning at least twenty five (25) percent of the company’s issued share capital, either through direct or indirect control or chain of ownership. A UBO is also any natural person that has control on the dismissal and appointment of majority of company directors.