Small Business Compliance Checklist

Corporation Tax Bookkeeping 

The new UAE Corporation Tax regime will require businesses to have comprehensive accounting and bookkeeping in place. Not doing so could lead to financial penalties (historically the FTA has been lenient with penalties, but naturally any and all penalties should be avoided as much as possible). Let’s take a look at the ways you can prepare your small business for the upcoming UAE Corporation Tax regime. 

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Deductible Expenditure

As per the Corporation tax rules, businesses will need to ensure that their expenditure is wholly and exclusively for the purposes of the taxable person's business. No deduction is allow for the following:

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a. Expenditure not incurred for the purposes of the Taxable Person’s Business.
b. Expenditure incurred in deriving Exempt Income.
c. Losses not connected with or arising out of the Taxable Person’s Business

Corporation Tax Software

The UAE is new to Corporation Tax, as such, businesses will require the assistance of powerful software implementation, such as Xero Accounting Software. 

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Corporation tax software can support with accurate calculation of corporation tax along with keeping an audit trails of the adjustments required as per law.

Using a tax software which compliments your existing ERP system would be key. Having an API which connects to your system, pulls the data with one button and can calculation your tax due would save you time and money.

Accounting and Transactional Review

Businesses will need to stay on top of 

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• E-audits 
• E-compliance 
• E-assessments 
• E-invoicing 

This, along with the various other essentials for good bookkeeping for your small business, requires experience to implement correctly. 

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Businesses which are based in Freezones will need to ensure that they are able to take advantage of the tax free breaks from their freezone authorities. This would involve a transactional review along with a review of agreements.

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There are likely to be transactions booked into the accounts which are allowable under IFRS and VAT but not allowed under corporation tax rules. A detailed review of these transactions along with disclosing them would be required.

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Companies with related party transactions are likely require a transfer pricing document to be prepared and to be disclosed.

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Having audited financial statements of your accounts would be ideal when calculating accurate tax returns. This means that your accounts have been reviewed by an independent third party and prepare as per IFRS.

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With Alpha Pro, you will have access to our team of experts. We know the new UAE Corporation Tax inside and out and can give the guidance your business needs to be financially in control.