Setting up a business is step one to a successful business venture in the UAE. Step two would be maintaining records of your financials day in and out. The government of every Emirate checks your tax returns, spending, transactions, etc. The government does this to ensure that your business stays on the right side of the rigid legal framework at all times.
To ensure it is always the case, you, as a business owner, need to have a thorough understanding of the legal regulations for taxes and financial records set by the UAE's federal government and laws specific to the Emirate you're operating your business. Let's have a look at everything a new business owner needs to know about accounting in the UAE below.
Business Accounting in the Emirates
Accounting in the UAE is not a tax filing necessity but is a corporate law requirement.
The UAE does not have a federal tax on income and wages, resulting in fewer accounting requirements prescribed by the government than other countries that levy corporate taxes. Yet even in a tax-free environment, it is critical to creating an accounting process that produces accurate financial information and analysis for strategic business decisions.
New corporate laws state that company management is responsible for keeping accounts with an accurate and fair view of its investors & shareholders. Several business regulators in the UAE must file audited financial statements as part of the company license renewal requirements.
Entities with regulated activities in the UAE - for example, entities regulated by the Central Bank, DFSA - are obliged to file their accounts with the regulator periodically. The filing can be on a quarterly to an annual basis.
Accounting Regulations in Dubai
The tax year in Dubai is from 1st January to 31st December, and IFRS or International Financial Reporting Standards financial statements are necessary for every company listed on the Dubai Stock Exchange and also for banks. The UAE Ministry of Economy is the regulatory body of accounting, while the UAE Accountants and Auditors Association, UAE National Accountants and Auditors Association are the professional accountancy bodies. Companies must provide the Ministry of Finance with audited annual business activity reports and financial statements.
Payroll is how employees are paid their salaries after tracking their working hours and then depositing the money in their accounts. Accountants are instrumental in getting Payroll Activities done the right way. But if you're the head of a small company and cannot afford an accountant's services, you can purchase payroll software so you can do the work yourself.
Another vital role accountants have in your business is tax. The right accountant is well informed about taxation policies and laws of Dubai. Filing taxes have become exceptionally important since Dubai introduced VAT or value-added tax. VAT filing is a complicated process for new businesses, so hiring accountants for filing taxes has become more critical than ever.
Accountants play an important role as financial consultants for business. They help prepare comprehensive reports about a company's finances and advise you on expanding operations and increasing profits. They help to avoid unnecessary spending and help save money. They can also help decide product pricing to ensure that the cost of selling the product is higher than the price of making it.
Financial Analysis and Auditing
In times of need, accountants can act as internal financial auditors and review the company's financial reports to see if there are any errors or discrepancies and make corrections before an external audit.
ERP Accounting Systems
An experienced accountant can also help with setting up ERP or Enterprise Resource Planning accounting systems with no difficulty. Enterprise resource planning (ERPs) is software that corporations use to manage day-to-day business activities like accounting, procurement, project management, risk management, and supply chain operations. A complete ERP suite also includes enterprise performance management, software that helps plan, budget, predict, and report an organization's financial results. In the long run, ERPs are a profitable investment since they offer the possibility of automatically recording, processing, and managing business processes or financial data.
Accounting services are complex operations that require the expertise of a market seasoned financial service. Find out how Jaxa Auditors performs a company's accounting at the highest order with our services. Let us do the heavy lifting with your company's financials while you focus on expanding your business in the UAE. To know about the services provided by JAXA Chartered Accountants feel free to Contact Us. We will be glad to answer all your queries.