The country of the United Arab Emirates has established several free zones which allow a company to set up itself in the country without facing much hassle. Each of these free zones has its own rules and regulations, and some of them require a mandatory annual audit. One such free zone which requires a yearly compulsory audit is the Dubai Multi Commodity Centre, better known as DMCC.
Let’s know more about the Dubai Multi Commodities Centre.
DMCC was established as a result of the initiative taken up by the government of Dubai. This free zone is spread across nearly 200 hectares of land and consists of almost 180,000-meter square area of commercial residential and retail space. Located very strategically, the DMCC mostly is used for setting up businesses for trading international commodities such as precious metals, raw materials of the industries, food etc. and also helps in getting access to various services such as transportation, communication services, etc.
Currently, this free zone deals with almost 15,000 companies which are registered in the free zone. The management strives to provide them with the best services and world-class amenities possible. The number of companies which are in the precious metal sector has substantially increased in recent times. Seeing this increase and the other demands of the diamond businesses, the headquarters of the DMCC which is the Almas Towers comprises of around a 1000 diamond companies. The tower furthermore has a separate diamond trading floor and a diamond vault to store these diamonds without any fear of them being stolen.
If you want to know more about setting up a company in the Dubai Multi Commodities Centre (DMCC), you can visit the official website of DMCC.
Importance of Auditor in DMCC
An auditor scrutinizes the audit report of a company and sees to it that there are no errors or discrepancies in the financial books that are prepared. An auditor is required to conduct the following in the free zone:
- The auditor is responsible for disclosing any and every expense of the company in the annual books of accounts.
- In case of any individual situation which needs an explanation, the auditor must make sure that there is a note at the end of the report, which will explain every detail of the case.
- All the revenue which are generated by the various commercial activities which are conducted by the company and do not come under the purview of any license should be separately mentioned in the financial reports of the company.
- If the company or any subsidiary of it does not possess a corporate bank account, it has to be mentioned in the financial reports of the company.
- If there are articles of the company which provide great help in the cross-checking of the financial data, and the data about the various financial capital of the company should be mentioned in the annual accounts. Also, the data related to the share capital of the company will be provided in these financial accounts.
Tax Return Filing and Auditing
As mentioned earlier, a company in the Dubai Multi Commodities Centre needs to present its financial reports to the management which are audited annually. This tax audit is necessary because the company needs to display the correct business information and if there are discrepancies in the data it can result in huge losses both in terms of financial loss or in terms of loss of confidence of present and potential customers.
The documents to be audited should be prepared per the rules and regulations of the International Financial Reporting Standard (IFRS). Before submitting the Income Tax Returns, the auditor will perform the following tasks:
●Calculation of Tax
A company needs to calculate the taxes to be paid to the nearest amount possible as it will allow the management of the company to adjust the budget accordingly.
●Calculation of VAT Returns
The auditor will pay special attention to the fact that the required forms for the Returns of the Value Added Taxes are filled up correctly and are presented to the relevant authorities in the correct time frame.
●Review of Taxes Due
It may be possible that the company may have some amount of taxes overdue. With the passage of time, this overdue tax can increase, and the management needs to calculate the total due tax so that the company will try to finish it off as soon as possible.
These are the reasons because of which it is necessary to avail the services of an auditor in the Dubai Multi Commodities Centre. It is to be kept in mind that not all auditing firms can provide audit services to a company which is registered in the free zone. Only a DMCC approved auditor is permitted to conduct an audit in the free zone.
If you are looking for conducting an audit of a company, do look into the services provided by JAXA Chartered Accountants. Jaxa will not only help your company by conducting audits, but can offer various other services too, such as accounting, payroll services, and many more services. For more details, contact us. We will be happy to help.