How to Prepare Your Business for UAE Corporate Tax Compliance

The stringent UAE corporate tax compliance requires businesses to meet compliance requirements. From maintaining updated financial records to streamlining tax registration, the UAE government imposes conditions to streamline the economy. This article highlights the business compliance checklist that you must follow to abide by the tax regime and leave no stone unturned when it comes to compliance.

Corporate Tax Bookkeeping 

The new CT regulations require businesses to have extensive accounting and bookkeeping practices in place to avoid any legal penalties. non-compliance with these basic regulations can result in hefty punishments by the regulators. Below are the ways how you can proceed with preparing your business for UAE corporate tax regulations.

Deductible Expenditure

Following the corporate tax rules, businesses are required to make sure that their expense is completely for the taxable person. Deduction for the expentire that is not incurred for taxable person’s business is not allowed. Similarly, expenses in deriving exempt income as well as the losses are not considered with or from the taxable person’s business. 

Corporate Tax Consultants 

As UAE is new to the corporate tax implementation, therefore taking assistance from the field experts who have corporate tax certification in UAE or consultants is the smart choice. The chartered accountants help businesses identify the tax requirements applicable based on your business niche and size and communicate the liabilities to avoid any risk. They understand the basic and advanced requirements that your business needs to fulfil. Moreover, if there is any discrepancy, they help find workarounds to exclude them. 

Transactional Analysis 

For businesses to comply with the tax regulatory framework, it is necessary to stay on top of e-audits, e-invoicing, e-assessments, and e-compliance. Understand the documents required for corporate tax registration with updated and accurate financial information.

Businesses that engage in related party transactions probably need to develop and declare a transfer pricing contract. When preparing proper tax returns, it would be good to have audited financial records of your accounts. This indicates that your accounts have been prepared in accordance with IFRS and examined by an impartial third party.

You will have access to our team of professionals when you work with ZSConsultants. Our team of experts offers you company financial assistance when it comes to paying corporate taxes while meeting the regulatory obligations.

If you are preparing for your UAE corporate tax filing, below are some key considerations you need to know.

Tax Calculation & Financial Management

The Tax of a company is determined based on data in a business’s financial statements. For this, either review accounting policies, entries, and disclosures in house or get in touch with a corporate tax law consultancy firm in UAE for registration and filing so that depreciation, amortization, provisioning, and revaluation figures could be accurately measured.

Expenditure is another critical area that needs evaluation while having a clear view of expenses can help maximize tax deductions. Therefore it is important to familiarize yourself with the UAE corporate tax rules to understand permissible deductions and avoid overpayment.

Operational Compliance 

To comply with UAE corporate tax, businesses must ensure efficient finance, tax operations, and IT systems. Responsibilities within the organization and teams should be clearly defined to avoid any risks. The use of IT systems and the consultancy from the accounting experts can help monitor and fulfil liabilities without paying fines.

‍Free Zone Entity Implications

Businesses that operate in the Free Zone take advantage of tax exemptions, but there are some conditions that make them qualify as a Free Zone company and the process can be complex. It is essential for Free Zone businesses to carefully review and ensure they meet all the criteria to maintain this status as per UAE’s law framework.

Transfer Pricing Model

The UAE tax authority requires compliance with transfer pricing rules for all the businesses. These rules govern how group companies allocate, account for, and document transactions between related entities, impacting taxable income. Companies should design Transfer Pricing policies that align with their operating model, making it easier to incorporate these calculations into year-end financial statements.

Analyzing the benefits and drawbacks of being a Free Zone entity is crucial, taking into account the criteria to keep this position. Assessing the advantages is aided by an assessment of the operating profile in accordance with Free Zone conditions.

Examine the rules carefully before filing corporation taxes to make sure accounting practices comply with the new legislation. Streamline the process of corporate tax registration online with the industry experts. Accurate tax obligation calculation is ensured by real-time information on depreciation, amortization, and revaluation. Calculating tax obligation requires financial reports. You may keep financial records, evaluate financial reports, and determine whether income is exempt or non-exempt by working with accounting and tax businesses such as ZSConsultants and learn how to calculate corporate tax in UAE.