Accounting and tax reports in companies in the UAE FEZs

27 / 07 / 2020

The United Arab Emirates is widely known in the business environment for its almost complete absence of taxation. The country does not have its own accounting standards; therefore, all accounting and auditing are carried out in accordance with International Financial Reporting Standards (IFRS).

All companies that are registered in the Emirates have an obligation to keep records! Since 2018, a 5% VAT has been introduced and many local companies have become VAT payers. Also, it has become mandatory for companies to prepare reports and store information on expenses and income, net profit, payroll calculations, etc. Many local companies required tax consultants, auditors and accountants.

Registered taxpayers are companies that operate in the Emirates or in another Gulf country (GCC - Gulf Cooperation Council), as well as companies that provide services and supply goods from the UAE.

Basic requirements for accounting companies in the Emirates:

    1. Maintain records relating to real estate are kept in the company's books for 15 years after the end of the tax period;

    2. The VAT payer is obliged to take into account and keep information on all transactions confirming the Emirate in which the company operates;

    3. All persons who conduct their activities in the Emirates have received the obligation to maintain accounting books with all the necessary tax information;

    4. Reports must be submitted in two languages: English or Arabic. The Federal Office may also request an Arabic tax return if the tax return was filed in English if additional translations are required;

    5. One of the most important requirements is the submission of tax reports in due time to the Tax Office;

    6. Pay the tax indicated in the declaration;

    7. Take full responsibility for the compliance of all specified information;

The standard Tax Period in the UAE is 3 calendar months. Reporting must be submitted before the 28th day after the end of the reporting period, which is established by the Tax Service of the United Arab Emirates. The deregistered company must submit the final Tax report for the last registered period.

The excess refundable VAT can be refunded to the taxpayer if the refundable VAT for a certain tax period exceeds the calculated VAT.

The declaration submitted to the Tax Service must contain:

    · Information about the name, the reference number of the transaction, as well as the address of registration;

    · Information about the Tax period to which the submitted declaration relates and the date of filing;

    · Expenses for VAT refund and the amount of refundable VAT, as well as the amount of VAT charged and required for refund;

    · Information about the tax payable, etc.