In light of the recent updates from the UAE Ministry of Finance regarding corporate tax, the emphasis on maintaining precise financial records has been significantly underscored. Here’s a distilled guide on the essentials of financial statement preparedness for seamless tax compliance in the UAE.
1. Financial Accounts Preparation:
- Ensure meticulous preparation and maintenance of financial statements in accordance with the prescribed accounting standards.
- These documents are instrumental in determining the taxable income and should be standalone to represent the financial position accurately.
2. Record Retention:
- Retain pertinent documents such as invoices, agreements, licenses, and other related business correspondence.
- Preservation of these records, either electronically or physically, is mandated for a period of seven years post the relevant tax period.
3. Audited VS Certified Financial Statements:
- The requirement for audited financial statements is specifically for entities with revenue exceeding Dh50 million in a tax period or Qualifying Free Zone Persons.
- It’s imperative to note that certified financial statements are not a substitute for audited statements as per the updated guidelines.
4. Auditor Engagement:
- Engage a registered auditor as per federal law 12/2014 and ministerial resolution 403/2015 to audit the financial statements, ensuring they are in adherence to the statutory requirements.
5. Individual and Consolidated Financial Statements:
- Except in the scenario of a ‘Tax Group’, each UAE entity is required to prepare and maintain individual financial statements.
- Should the revenue of a Tax Group exceed Dh50 million in a tax period, audited financial statements are mandated.
6. Currency Conversion:
- All financial transactions and amounts are to be measured in UAE dirhams for corporate tax purposes.
- Foreign currency transactions need to be translated to UAE dirhams based on the applicable exchange rate set by the Central Bank of the UAE.
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At KRV Auditing, we extend our expertise in ensuring that your financial records are meticulously prepared and maintained in alignment with the UAE corporate tax regulations. Our seasoned auditors are adept at providing comprehensive auditing services tailored to your business needs. Offering a Free Consultation, we are poised to assist you in navigating the tax compliance landscape effectively.
Contact us today to ensure that your financial standing is robust, compliant, and well-prepared for corporate tax requisites in the UAE.
