How to Prepare for a Financial Audit

 An audit is crucial because it gives a set of financial statements credibility and gives shareholders assurance that the accounts are accurate and fair. It can also aid in enhancing a company’s internal systems and controls. Auditing financial records can be a stressful process. However, planning and preparation can ensure that your audit goes smoothly and successfully.

Make a plan in advance:

It shouldn’t come as a surprise that making a plan ahead of time is the most crucial step you need to take when getting ready for your audit. It takes time to plan and set expectations for the audit, so extra resources should be set aside for the last-minute preparations. The entire finance team will need to make sure they have the time and resources needed to prepare for the audit and establish expectations.

Staying up to date with accounting standards:

It takes less time to track data and make adjustments to comply with regulations when everything is up to date. It’s important to maintain a solid understanding throughout the year to protect your business and its internal figures because standards frequently call for specific training to be given to professionals.

Identify significant changes:

If the company has previously undergone an audit, it is important to take into account how its financial situation has changed since that time. The auditing process may be significantly impacted by new investments in projects, as well as by grants and government support.

Additionally, any non-financial changes to the business should be noted. Have internal control systems changed, or have new procedures been implemented? These are important to be aware of because they may have an indirect impact on the fiscal results for the year.

Learn from the past errors:

Set up a planning session with the audit team and the decision-makers to discuss how to correct any prior mistakes and increase the accuracy of this year’s audit.

 

Assign responsibilities:

Assess the auditors’ list of requirements and assign each item to a capable and responsible person, along with a deadline. As a result, the team and decision-makers find the entire process to be much more manageable and quantifiable.

Organize data:

Prior to the start date, make sure you have everything on your auditor’s preparation checklist.

• General ledger
• Employee handbooks
• Fiscal year budgets
• Paid bills and checks
• List of transactions
• Internal financial statements
• Accounting policies.

For more information, get in touch with TRC. They offer the best financial audit services and are a group of enthusiastic, young professionals with expertise in business growth advisory services.

IMPLEMENTATION OF DUBAI CORPORATE TAX

 

IMPLEMENTATION OF DUBAI CORPORATE TAX

What is corporate tax?

Corporate tax is a type of direct tax levied on the net income or profit of corporations and other entities from their operations. In some other jurisdictions, the term “corporate tax” is also used to refer to “corporate income tax” or “business profits tax.”

In January 2022, the Ministry of Finance announced the implementation of a federal Corporate Tax (CT) on business net profits. The tax will become applicable on either July 1, 2023 or January 1, 2024, depending on the business’s fiscal year. CT will be used in all of the emirates.

Objectives of CT:

Scope of CT:

• All UAE-based companies and people conducting business activities under a commercial license
• Corporate tax breaks currently available to free zone businesses will be maintained, provided the free zone business complies with all applicable regulatory requirements and does not conduct business in the mainland UAE.
• Free zone businesses must still comply with certain CIT regime obligations, such as registering and filing a CIT return.
• Companies involved in real estate management, construction, development, agency, and brokerage.

Exemptions of CT:

• Natural resource extraction businesses are exempt from CT because they will continue to be subject to Emirate-level corporate taxation.
• Dividends and capital gains derived by a UAE company from its qualifying shareholdings (i.e., an ownership stake in a UAE or foreign company that satisfies certain requirements to be outlined in the UAE CIT law.
• Qualifying intra-group transactions and reorganizations, subject to the UAE CIT law’s future conditions.

CT Rate:

The following corporate income tax rates are proposed to be used:

• 0% for taxable income up to AED 375,000;
• 9% on taxable income in excess of AED 375,000; and
• a different rate (yet to be announced) for large multinationals with consolidated global revenues exceeding EUR 750 million (approximately AED 3.15 billion), in accordance with Pillar Two of the OECD Base Erosion and Profit Shifting (BEPS) project.

Contact TRC Pamco if you need any advice or direction regarding the potential impact of CIT on your company and operations in the UAE; they are experts in Dubai corporate tax.

VAT Return Filing in UAE: A Detailed Guide

 

What is VAT Return?

The VAT (Value Added Tax) return is the summary of all the purchases and supplies (goods or services) made by VAT-registered businesses/taxable individuals for a particular tax period. This summary, including the details of the tax imposed at every stage of sale/purchase, reflects the tax liability of the taxable persons – which is to be submitted to the Federal Tax Authority (FTA).

Want a seamless VAT return filing in Dubai? Get professional assistance in achieving UAE VAT compliance from experts at TRC Pamco.

VAT Filing in UAE – The Complete Procedure

 

1. Open E-Services Portal

Firstly, go to the FTA e-services portal. Log in with your VAT account’s credentials to access the dashboard which will show the basic details of your tax registration, currently active and associated with the FTA.

 

2. Click VAT Tab

In the navigation bar (placed on the uppermost part of the screen), click the VAT tab and from the dropdown menu, select ‘VAT 201 – VAT Returns’. Now, click on the ‘VAT 201 – New VAT Return’ to start the procedure.

 

3. Enter Information

Here, a few details of the taxable person like name, tax registration number, etc. will have to be filled in.

 

4. Mentioning VAT Sales and Expenses

For the current tax period, all the relevant details of VAT sales and expenses – like the zero-rated supplies, exempt supplies, etc. – have to be submitted. Also, all the expenses bearing the current VAT rate of 5% are to be submitted.

 

5. Due Net VAT Calculations

The taxable person’s net VAT due calculations have to be shown here. For the due amount that is higher than the recoverable amount, the tax authority is to be paid. If vice versa, a VAT refund can be claimed.

 

6. Declaration

Through the ‘Declaration and Authorized Signatory’ portion, you declare the accuracy and correctness of all the information provided to the Federal Tax Authority.

Through the above-mentioned process, you/your expert tax consultant can carry out the VAT filing in UAE.

Why choose a DMCC Approved Auditor?

 

What is DMCC?

A businessperson well-understands the importance of a trade-friendly ecosystem and business-favouring conditions, including infrastructural setup, for their business to make the most of it and thrive ahead. And to implement these factors in order to attract and nurture different kinds and scales of businesses, the Dubai government commenced the concept of Free Zones wherein an array of perks like cheap labour, access to raw materials, appropriate locations, certain tax benefits and exemptions were offered.

DMCC (Dubai Multi Commodities Centre) is one such Free Zone that enables organisations to leverage the business-centric conditions and propel a profitable and advantageous business.

Get market-best business solutions from experienced auditing firms in Abu Dhabi and give your new endeavour a great beginning!

Why go ahead with DMCC Approved Auditors?

Well, when it comes to choosing the auditors for your company based in the free zone, you must comply with the rule that directs only a DMCC approved auditor to carry out your company’s financial audit.

The DMCC approved auditor would be well-acquainted with all the necessary things to be taken care of – like the audit report of the company must be according to Section 11 of the regulations of the company set by the DMCC Management. Also, the approved auditor will make sure that the report has been signed and stamped by the company’s board of directors.

What are an auditor’s roles and responsibilities?

Firstly, the auditor will ascertain that there are no inconsistencies, misstatements, or incorrect financial data presented in the company’s annual financial accounts. The auditor will also ensure that the reports are prepared as per the directions and standards set by the IFRS (International Financial Reporting Standard).

Auditing Firms in Abu Dhabi

Give your business the luxury of making the most of a superlative range of services like Auditing, Advisory Services, Management Consulting, Accounting, and much more with the highly acclaimed and experiential professionals of TRC PAMCO.

More details visit: https://www.trcpamco.com/

Everything You Need to Know About 2022 UAE Business VAT Refund Scheme

Under the VAT guidelines – the Federal Tax Authority has crafted a scheme for the business visitors, wherein they can file a refund claim of VAT paid on expenses incurred in the UAE – thereby globalizing the UAE economy.

Earlier this year, in March 2022, the FTA announced that they will accept refund applications for the UAE VAT refund for the Foreign Business scheme. Non-UAE resident businesses need to understand whether they have incurred VAT and if they qualify for a refund. Here is all you need to know about the VAT Refund Scheme:

Who is eligible? Only qualifying non-UAE resident businesses, on certain expenses incurred during 2021 calendar year, and totaling more than AED 2000. Further, they should fulfill the below criteria:

• Not have any VAT registrations in the UAE

• Not conduct business in the UAE

• Must be registered with a competent authority and conduct business in that jurisdiction.

Under the below situations, a business will not be eligible for VAT refunds:

• A business supplies products/services in the UAE

• The tax incurred is one that is irrecoverable by VAT registrants in the UAE

• The FTA has listed eligible countries, so if your business is not one from the listed countries

• A non-resident tour operator

Now, the most important part to filing VAT refunds is the documentation process, which might not necessarily be the easiest, which is where you need VAT consultants in Abu Dhabi, Dubai, UAE. For the business VAT refund scheme, the below original hard copy documentation is a must:

• Original tax compliance certificate

• Original tax invoices

• Stamped proof of the payments for all the claimed tax invoices

• Proof of authority of authorized signatory

• Passport copy of authorized signatory
  
  

While this can get overwhelming, TRC Pamco – a firm providing VAT advisory services, can help you in application of VAT refund, review of documentation, preparation of details as required by FTA and continuous follow-up with FTA to expedite the refund process. They also advise you on the best foot forward to getting a hustle free VAT refund.

External Audit and its types

External Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions.

The purpose of an audit is to form a view on whether the information presented in the financial report, taken as a whole, reflects the financial position of the organization at a given date. There are various types of external audits, each conducted to provide assurance to the investors, detect any errors and frauds, check accounting policies and verify accounts and statements.

The different types of External Audit include:

Financial Audit: A financial audit is an opinion engagement – performed independently by an audit professional – who is acting with due diligence, working in line with the professional standards, and preparing an audit report for the consumption of investors and management, to aid in decision-making, leading to business growth.

Compliance Audit: A compliance audit is one conducted in many large-scale enterprises for data privacy and critical infrastructure protection. A compliance audit ensures that the established rules and procedures are followed to ensure the above.

Operational Audit: An operational audit is nothing but a thorough check on the processes being followed within an organization. The objective for this is clear – where can there be process improvements to minimize risk and maximize growth within the company. Through an operational audit, an audit develops recommendations for improvement, thereby simplifying methods being followed. Simultaneously, auditing services in DAFZA also include statutory audits, which are performed keeping in mind the requirements of the free zone.

The goal for all external audits is simple – to ensure that every organization adheres to managerial procedures and requirements, and to provide an opinion on the organization’s financial statements.

Is your business looking for external audit services in UAE? Check out TRC Pamco, a leading auditing company in UAE to help you conduct effective and efficient external audit services.

10 Most Common VAT-Related Mistakes that UAE Businesses Should Avoid

 Ever since the introduction of VAT in the UAE – there have been questions and some more. With regulated tax agents in the UAE – businesses are trying to sort their VAT-related issues, given the heavy penalties charged on non-compliance. Here are a couple of common mistakes that businesses tend to make and must always avoid.

• It’s important to record the sale in the correct emirate – it isn’t dependent on the customer location but on the location of your fixed business.
• Most businesses fail to notify the FTA that tax is based on margins, wherein if you are selling certain goods like coins, stamps, and second-hand goods – you must charge VAT on the profit margin.
• Not having an invoice-wise working of the returns – it’s important to maintain this, because if ever the FTA demands an audit – these details will be required.
• It’s crucial to file returns and make payments on time, or else there is a heavy penalty levied on the business. Given that most businesses tend to miss out on dates, it’s important to indulge in VAT consultancy services in Abu Dhabi and Dubai.
• Be careful of the claims – and ensure you are making the right claims and on the right purchases.
• If your business makes a zero-rated sale or an exempt sale – it doesn’t mean that you don’t show it. Even if you file everything properly and miss out on this information – it can have repercussions. Identify and disclose them in your return submission.
• Reverse Charging Mechanisms is another place where businesses need to be careful. While disclosing transactions for returns, companies fail to disclose the reverse charging mechanisms, given they don’t have any tax effect.
• Timing is crucial when it comes to VAT, and it should be charged at the right time. There have been instances where businesses fail to insert supplies in the wrong returns, although they are supplied much later.

These are a few of the common VAT-related mistakes that businesses make. However, if you want to avoid this, it’s good to indulge in VAT health check services in UAE and stay in compliance with the VAT laws. To know more, reach out to TRC Pamco, a leading VAT consultancy in Abu Dhabi and Dubai.