Business Behavior Hub

Value-Added Tax (VAT): Introduction A value-added tax is a consumption tax put on a product whenever a value is added at every step of the supplied string, from production to the point of sale. The amount of value-added tax (VAT) that the user spends is on the cost of the goods, less any of the costs of materials used in the product that has already been taxed. Value-added taxation is based on taxpayers' expenditure rather than their income. In contrast to a rising income tax, which levies higher taxes on higher-level earners, VAT registration in Dubai applies equally to every purchase. Value-added tax accounting methods There are three options to the standard VAT accounting method: 1.   Annual accounting VAT scheme It is just like the standard value-added tax accounting method, except that you do not fill in quarterly returns. Instead, you have an annual value-added tax reporting and payment deadline. Some businesses hold this the same as their corpor...

Financial Accounting: Financial accounting plays an essential role in Islamic banking in setting and establishing a peaceful integration among different parties concerned in banking transactions. Islamic accounting gives the information which users of the financial statements of Islamic banks depending on assessing the Islamic bank’s extent of compliance with Shari’ah and defining rights and obligations of all interested parties under the principles of Shari’ah. Similarities between Islamic Accounting and Conventional Accounting: There are numerous similarities between Islamic and conventional accounting services in Dubai , as both are about presenting useful economic information to permit users to make wise decisions by facilitating comparisons and thereby lowering the cost of assessing alternatives investments. However, the nature of transactions in Islamic organizations that deal within a Shari’ah framework is different, as Islamic organizations have to contribu...

Before the declaration of Tax Procedures, there has been extended researches and studies on the part of the government, making assured that everything will be relatively easy for everyone in the country. History of Tax System in UAE: Since the milestone Federal Law Number 7 of 2017 regarding Tax Systems was announced by Sheikh Khalifa Bin Zayed Al Nahyan in June of the year 2017, it laid down the bases of the tax policies that would soon be administered in the United Arab Emirates starting 1 January 2018. This will mark the United Arab Emirates and Saudi Arabia as the first countries that are part of the Gulf Cooperation Council that will implement Value added tax. Arriving mid of September, the start of the registration will happen for all firms that fall under the minimum annual revenue of AED 375,000. There are approximately 350,000 businesses that are expected to register under this new regime. Registration of VAT: UAE Federal Tax Authority The registratio...

The value-added tax regime in the region will have a significant impact on business operations and profitability. Companies dealing in goods and services that invite the tax must understand and prepare for the implications. Similarly, entities that import products or transact with Zero-Rate or Tax Exempt entities must, at an initial stage, consider the impact of value-added tax. Group of companies with operations in other GCC countries must carefully review the impact of intra-group and cross-border transactions. While there is a unified VAT agreement across GCC, each member state has the right to enact its laws within the broad framework. These different treatments have to be understood. Step to being a value-added tax Ready: Here is a simple four-step guide to support companies in the UAE to prepare for value-added tax implementation, which can take between 8 and 12 months. It may take  prolonged if some of the activities are outsourced, for example, Information T...

A financial audit is the analysis of your business' financial reports and accompanying documentation and processes, and is conducted by someone who is sovereign of your organization. These often-yearly events probe your Company's financial position: They look at your accounting reports, interior control policies, and accounts according to the industry-accepted accounting criteria. Prepare for a Financial Audit It is normal to be worried about an impending company Audit firms in UAE . They are costly and make you unsure about what your auditor will find. Moreover, if you plan ahead of time, you can save money and ensure that your auditor's findings are only suitable. As you have read in earlier sections of this guide, your auditor is watching for inconsistencies that could lead to financial exaggerations. In their arsenal, your auditor has many distinct types of analytic procedures, though if they do not understand something, they will examine and ask you o...

Performing an audit has numerous benefits for the company, but many misunderstandings and rumors are going around regarding the auditing of a company. These are some of the myths that prevent us from conducting an audit, which ultimately hampers the company. The most prominent misunderstandings/myths that every business person should know about audits are explained below: Auditing is considered a Boring Profession: It is normally agreed upon by everyone that professions such as auditing and accountancy are very droll and very boring. Whenever we say auditors, a figure of a skinny person with thick glasses sitting in front of a large ledger resembles in our mind. This thought is just a fantasy of our vision. In reality, the accounting services and audit firms in Dubai have seen a visible disruptive revolution in the job. Nowadays, everything is done online or via a computer. Various soft wares help in reducing the time of a process, which would have taken days to ...

The introduction of Value-Added Tax (VAT) in Dubai, a traditionally Tax-free jurisdiction, draws with it several opportunities and an equal number of challenges. It is among the most complex and demanding tax systems that companies find hard to cope with. A trained professional who can supervise you on the pros and cons of the system and who can act as a mediator between you and the Federal Tax Authority is more than mandatory. They will aid you through the various phases of VAT implementation in UAE and will also aid in achieving tax compliance, carrying out legal activities, managing records and preparing and filing a VAT return. They are trustworthy and ethical, but you need to ensure that you appoint the right one. The VAT in Dubai, UAE GCC countries have decided to implement value-added Tax within the entire region through a written agreement inked by all member countries. UAE has already put into practice the VAT laws and rules with effect from January 1, 2018, togeth...

Business Plan & Feasibility Studies The Auditor is the part of your business even before you start the business. With an extensive experience of working with different industry and clients, Auditor helps you build a Business Plan for your investments and relieve you from the stress of rigorous Market Research. With our engagement, you get your requirements like Market Analysis, Demographic Study & Feasibility Report as per your requirement. Auditors do various feasibility studies and derive different financial ratios for you to acquire capital and make wise investment decisions with the results. Due Diligence Audit Considering the idea of Audit Services In Dubai , it stays at the forefront of finance. Trying into the explanation of the particular meaning of Auditing, it deals with the review or analysis, of a process or quality system, to confirm compliance with requirements. An audit will apply to an entire organization or can be specific to a functio...

Imagine you have successfully established your dream business during a national or international market. Currently your business can enter into multiple transactions each single day. It’s impossible to remember of these transactions, but there's a mandate to manage them, and that’s where bookkeeping comes into the picture. Bookkeeping is the method of recording daily transactions that ensue in a business entity once its incorporation. It’s often misunderstood with the term ‘accounting’ or even touted to be same. Accountancy is an accounting tool that builds the muse of accounting by building and maintaining business records whereas accounting, on the opposite hand, may be an abundant broader construct and it analyzes these records. Method and need of bookkeeping Services for Business Entities The most preferred technique of accountancy is the double-entry technique, wherever every dealing is recorded doubly within the 2 corresponding accounts at the same time. The ent...

The Dubai, UAE, cabinet has approved the entire list of all the administrative VAT Fines and vat Penalties in UAE that may be imposed on businesses for violations of the VAT laws. Administrative penalties are additional amounts imposed on a taxable person for breaching the provisions of the VAT Law. The following are some of the steps which i nvite administrative penalties under VAT in UAE. Actions on Administrative penalties under VAT in UAE All actions inviting penalties under VAT Administrative penalty (subjected to change) When a taxable person, fails to display prices inclusive of VAT 15,000 AED Failure to notify FTA regarding the charge of tax based on margin 2,500 AED Failure to comply with maintenance of the record of goods within designated zones or moving them to other designated zones Higher of 50,000 AED or 50% of chargeable tax Failure while issuing a tax invoice or an alternative docu...