Mazzoni Accounting https://bazaaraccounting.com Mazzoni Accounting and Management Advisors LLC Wed, 26 Mar 2025 06:18:54 +0000 en-US hourly 1 https://bazaaraccounting.com/wp-content/uploads/2023/07/Favicon-150x150.jpg Mazzoni Accounting https://bazaaraccounting.com 32 32 The Backbone of Corporate Tax Compliance: Why Accounting & Bookkeeping Matter https://bazaaraccounting.com/the-backbone-of-corporate-tax-compliance-why-accounting-bookkeeping-matter/ https://bazaaraccounting.com/the-backbone-of-corporate-tax-compliance-why-accounting-bookkeeping-matter/#respond Wed, 26 Mar 2025 06:03:47 +0000 https://bazaaraccounting.com/?p=9103 The United Arab Emirates (UAE) introduced Corporate Tax (CT) as part of its ongoing commitment to meeting with international tax standards for tax transparency and preventing harmful tax practices. A competitive CT regime based on international best practices is expected to cement the UAE’s position as a leading global hub for business and investment and […]

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The United Arab Emirates (UAE) introduced Corporate Tax (CT) as part of its ongoing commitment to meeting with international tax standards for tax transparency and preventing harmful tax practices.

A competitive CT regime based on international best practices is expected to cement the UAE’s position as a leading global hub for business and investment and accelerate the UAE’s development and transformation to achieve its strategic objectives.

The UAE Corporate Tax Law was officially announced through Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which came into effect on June 1, 2023, marking a significant step in the country’s tax reforms.

The Role of Accounting & Bookkeeping in Corporate Tax Compliance

Accurate bookkeeping and accounting are essential for corporate tax compliance and financial health. Here’s why:

Compliance with Tax Laws

Maintaining proper records ensure that the company files accurate tax returns and complies with tax laws, preventing potential penalties.

Accurate Tax Calculations

Detailed financial records help calculate the correct amount of taxes owed, preventing overpayment or underpayment. Proper bookkeeping also ensures that businesses can track expenses and claim eligible deductions, thus optimizing taxable income and maximizing tax efficiency.

Audit Compliance and Preparedness

Well-maintained financial records make audits smoother and reduce the risk of disputes with tax authorities.

Cash Flow Management

Accurate records provide insights into cash flow, helping businesses plan for tax payments and avoid liquidity issues.

Risk Mitigation

Well-organized financial records provide clear documentation in compliance with corporate tax laws and ensures the company avoids legal issues, fines, or reputational harm.

How we can assist you

Are you looking for bookkeeping services specifically for corporate tax compliance? You are on the right place! We offer you the following services:

Bookkeeping Services

  • Recording financial transactions (income & expenses)
  • Categorizing expenses and revenue
  • Bank reconciliation
  • Managing accounts payable (bills) and accounts receivable (invoices)
  • Payroll processing and compliance
  • Payment processing support

Tax Preparation & Compliance

  • Preparing financial statements for tax filing
  • Tracking deductible expenses
  • Calculating corporate tax obligations
  • Filing corporate tax returns
  • Ensuring compliance with tax laws and regulations
The Backbone of Corporate Tax Compliance: Why Accounting & Bookkeeping Matter

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]]> https://bazaaraccounting.com/the-backbone-of-corporate-tax-compliance-why-accounting-bookkeeping-matter/feed/ 0 Involuntary Loss of Employment Insurance (ILOE) in UAE https://bazaaraccounting.com/involuntary-loss-of-employment-insurance-iloe-in-uae/ https://bazaaraccounting.com/involuntary-loss-of-employment-insurance-iloe-in-uae/#respond Thu, 13 Mar 2025 04:28:41 +0000 https://bazaaraccounting.com/?p=9055 What Is ILOE and How to Subscribe? The subscription to ILOE insurance scheme started on January 1, 2023 and it aims to protect employees by offering them a maximum 3–month cash compensation as long as they did not resign or were dismissed for disciplinary reasons. Category Basic Salary Insurance Cost Monthly Compensation First Category AED […]

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What Is ILOE and How to Subscribe?

The subscription to ILOE insurance scheme started on January 1, 2023 and it aims to protect employees by offering them a maximum 3–month cash compensation as long as they did not resign or were dismissed for disciplinary reasons.

CategoryBasic SalaryInsurance CostMonthly Compensation
First CategoryAED 16,000 or lessAED 5 per monthUp to AED 10,000
Second CategoryBasic Salary exceeding AED 16,000AED 10 per monthUp to AED 20,000

Subscription channels

  • Insurance pool website (www.iloe.ae)
  • The smart application of the insurance pool
  • Exchange Houses
  • Kiosk Machine

UAE nationals and residents working in private sector or federal government are eligible for the insurance

No Costs or fees are required from the employers

The conditions to be compensated

  • If you are subscribed to the insurance scheme for at least 12 consecutive months
  • If you have not been dismissed from work for disciplinary reasons or resignation
  • Those excluded from the insurance scheme are investors, domestic workers, employees with temporary employment contract, juveniles under 18 and retirees who receive a retirement pension and have joined a new job

What are the fines and penalties for non-participation in ILOE insurance?

According to the Ministerial Resolution No. 604 of 2022 concerning Unemployment Insurance Scheme, there are two types of fines and penalties for not subscribing or complying with the policy. Subscribing to unemployment insurance has a grace period, after which fines will be imposed for those who fail to do so.

  • A fine of 400 AED for non-enrollment in the scheme.
  • A fine of 200 AED for non-compliance with regular installment payments.

Fines can be deducted from the employer’s salary or End of Service benefits in case of delay of payment for more than 3 months, plus the block of any new work permits and labor card renewals.

HOW BAM ADVISORS CAN ASSIST IN SUBSCRIBING INSURANCE

BAM can guide you with essential details to support in subscribing the insurance. Since ILOE insurance is mandatory for employees, we are here to ensure that all the required information is available for you. Contact us to learn more about ILOE insurance in UAE.

Involuntary Loss of Employment Insurance (ILOE) in UAE

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]]> https://bazaaraccounting.com/involuntary-loss-of-employment-insurance-iloe-in-uae/feed/ 0 How to Select the Best Accounting Firm in Dubai for Your Business https://bazaaraccounting.com/how-to-select-the-best-accounting-firm-in-dubai-for-your-business/ https://bazaaraccounting.com/how-to-select-the-best-accounting-firm-in-dubai-for-your-business/#respond Wed, 12 Mar 2025 08:57:34 +0000 https://bazaaraccounting.com/?p=9041 1. Industry-Specific Expertise Matters Not all accounting firms in Dubai are equipped to handle the nuances of every industry. Whether you’re in real estate, retail, construction, healthcare, or e-commerce, selecting a firm with deep industry knowledge ensures they can navigate the sector-specific tax laws, reporting requirements, and compliance mandates that impact your business. 2. A […]

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1. Industry-Specific Expertise Matters

Not all accounting firms in Dubai are equipped to handle the nuances of every industry. Whether you’re in real estate, retail, construction, healthcare, or e-commerce, selecting a firm with deep industry knowledge ensures they can navigate the sector-specific tax laws, reporting requirements, and compliance mandates that impact your business.

2. A Full Suite of Services Saves Time and Costs

A top-tier accounting company in Dubai should provide more than just bookkeeping. Look for firms that offer:

– Bookkeeping & Financial Reporting – Keeping accurate records and ensuring compliance with IFRS.

– VAT & Corporate Tax Services – Staying updated on UAE tax laws and FTA requirements.

– Payroll & HR Solutions – Managing employee salaries, benefits, and labor law compliance.

– Audit & Risk Advisory – Helping you maintain financial transparency and avoid legal pitfalls.

– Business Consulting & CFO Services – Providing strategic financial insights to improve profitability.

3. Local Tax & Compliance Expertise is Non-Negotiable

With corporate tax and VAT regulations evolving in the UAE , working with an accounting firm in Dubai that is well-versed in Federal Tax Authority (FTA) guidelines, Economic Substance Regulations (ESR), and Anti-Money Laundering (AML) laws is essential. Failure to comply can lead to hefty fines and business disruptions.

4. Tech-Driven Accounting Solutions Are a Must

Modern accounting companies in Dubai leverage cloud-based accounting software like Xero, QuickBooks, and Zoho Books to provide real-time financial tracking, automation, and secure data management . Businesses that adopt digital accounting solutions benefit from improved accuracy, efficiency, and fraud prevention.

5. Reputation and Proven Track Record Matter

Before committing to an accounting firm, check client testimonials, case studies, and online reviews on platforms like Google, LinkedIn, Clutch, or Trustpilot . A firm’s success stories, especially in helping businesses optimize tax liabilities or improve cash flow , can give you confidence in their ability to support your financial goals.

Real-World Example:
“How a Dubai Retail Business Saved 30% on Tax Liabilities with Proactive VAT Planning”
A retail client partnered with Mazzoni Accounting to restructure their VAT filings, leading to a 30% reduction in tax costs while ensuring full FTA compliance. The firm’s expert guidance prevented costly penalties and improved overall cash flow.

6. Transparent Pricing Structures Prevent Unpleasant Surprises

Accounting services should be an investment, not an expense burden. Some firms offer fixed monthly fees, while others charge based on services rendered. The key is transparency —look for firms that provide detailed pricing breakdowns with no hidden fees.

7. Reliable Customer Support is Essential

A good accounting firm in Dubai should offer dedicated account managers who provide timely financial advice, especially when dealing with urgent tax audits, payroll issues, or investment decisions.

8. Cross-Border Tax Knowledge Benefits Multinational Businesses

If your business operates internationally, you’ll need a firm that understands free zone taxation, cross-border VAT, and international financial reporting standards (IFRS). Firms with global tax expertise can ensure compliance while optimizing your tax structure.

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]]> https://bazaaraccounting.com/how-to-select-the-best-accounting-firm-in-dubai-for-your-business/feed/ 0 Replacing Equity Method with Cost Method of Accounting https://bazaaraccounting.com/replacing-equity-method-with-cost-method-of-accounting/ https://bazaaraccounting.com/replacing-equity-method-with-cost-method-of-accounting/#respond Wed, 12 Feb 2025 04:40:06 +0000 https://bazaaraccounting.com/?p=8833 Accounting Standards Interaction with Corporate Tax: Replacing Equity Method with Cost Method of Accounting Introduction In November 2023, the Federal Tax Authority (FTA) has released Corporate Tax Guide | CTGACS1 – Accounting Standards and Interaction with Corporate Tax, which provides guidance on the interaction of Accounting Standards with the newly implemented Corporate Tax in the […]

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Accounting Standards Interaction with Corporate Tax: Replacing Equity Method with Cost Method of Accounting

Introduction

In November 2023, the Federal Tax Authority (FTA) has released Corporate Tax Guide | CTGACS1 – Accounting Standards and Interaction with Corporate Tax, which provides guidance on the interaction of Accounting Standards with the newly implemented Corporate Tax in the UAE.

It contains an overview of the accounting methods to be used and the required adjustments from the accounting income to arrive at the taxable income, in terms of the accounting methods applied.

This article will focus on paragraph 6.5 Cost Method of Accounting to replace Equity Method of Accounting set out in CTAGACS1. This mainly applies to parent companies holding Investments in Associate and Joint Ventures which are covered in IAS 28 of the International Financial Reporting Standards (IFRS).

Which investments shall be recognized as Investments in Associates and Joint Ventures?

IAS 28: Investments in Associates and Joint Ventures defines the following terms as:

Associate

an entity over which the investor has significant influence.

Joint Venture

an arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Thus, if an entity has investments in associates, or has a joint control over an arrangement with another entity, as defined above, such investments shall be recognized as Investments in Associates or Investments in Joint Ventures in the books of the investor, and accounting guidelines set out in IAS 28 shall be applied.

What is significant influence?

  • As per par. 5 of IAS 28, an investor has significant influence over an investee if the investor holds, directly or indirectly, 20 percent or more of the voting power of the investee. It is usually evidenced in one or more ways including but not limited to: representation in the board of directors, material transactions, participation indecision-making processes, etc.

Accounting Methods

Under IFRS, parent companies (not in the context of a Tax Group) are allowed to account for investments in associates and joint ventures using the equity method, where the investor company records its proportionate share of the investee’s financial results.

While under Corporate Tax guidelines, to avoid double taxation of the equity accounted investments’ income, cost method should be used to account for these investments.

Equity Method

In the equity method of accounting, the investment is initially recognized at cost, while movements and transactions related to the investment will affect the carrying amount as follows:

  • Share in the profit/loss of the investee will be accounted in the investor’s profit/loss and will increase the carrying amount of the investment;
  • While dividends received from the investee will be treated as a reduction in the carrying amount of the investment in the investor’s books.

Equity Method – Illustrative Example

Company A paid AED 250,000 to Company B in exchange for 25% ownership of Company B. During the financial year, Company B reported a net income of AED 100,000, and declared dividends to investors, of which, AED 50,000 was paid to Company A.

The carrying amount of Company A’s investment at year-end would be:

In addition, Company A has reported a net operating income of AED 475,000 before any investment income. So, at the end of the year, the reported accounting income of Company A in their financial statements wouldbe:

Equity Method – Illustrative Example

In the application of equity method, the portion of the investee’s profit/loss recognized in the investor’s profit/loss may be taxed twice, as Corporate Tax is a direct tax on an entity’s income.

To avoid double taxation of the equity accounted investments’ income, the FTA requires for Cost Method to replace the Equity Method of accounting.

With this, treatment of the related transactions are as follows:

  • Share in the profit/loss of the investeeshall not beincluded in the investor’s taxable income calculation;
  • Instead, only dividends and other profit distributions(which may also qualify for exemption under Article 22 ofthe Corporate Tax Law) should be recognizedfor CTpurposes.

Cost Method – Illustrative Example

Company A paid AED 250,000 to Company B in exchange for 25% ownership of Company B. During the financial year, Company B reported a net income of AED 100,000, and declared dividends to investors, of which,AED 50,000 was paid to Company A.

In addition, Company A reported a net income of AED 500,000 in their financial statements, which includes their share in Company B’s net income.

The computation of Company A’s taxable income would include:

*Before other adjustments and considerations as set out by the FTA Guidelines.

How we can assist you

  • We can help in reviewing the financial statements if needed, ensuring they meet the required standards and are accurately reflected in the tax return.
  • Our team can provide expert advice on the applicable adjustments to be made on the accounting income to determine the final net taxable income, and the total income tax payable.
  • We can assist in identifying the documents required based on your tax profile and ensure they are correctly prepared and ready to submit to FTA. This includes gathering both mandatory and optional documents that may be relevant.
  • We offer support in filing the tax return in the FTA portal and uploading the necessary documents, ensuring that all steps are completed properly and efficiently.
Replacing Equity Method with Cost Method of Accounting

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]]> https://bazaaraccounting.com/replacing-equity-method-with-cost-method-of-accounting/feed/ 0 How to Choose the Right Transfer Pricing Service Provider for Your Business https://bazaaraccounting.com/how-to-choose-the-right-transfer-pricing-service-provider-for-your-business/ https://bazaaraccounting.com/how-to-choose-the-right-transfer-pricing-service-provider-for-your-business/#respond Mon, 10 Feb 2025 07:45:13 +0000 https://bazaaraccounting.com/?p=8816 Transfer pricing is the process of settling prices for transactions between related parties and this has several tax implications. Organizations seek the expertise of specialized service providers to ensure compliance and reduce risks. Choosing the right provider is important for a successful transfer pricing strategy. Define Your Needs Ensure the specific services that are required […]

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Transfer pricing is the process of settling prices for transactions between related parties and this has several tax implications. Organizations seek the expertise of specialized service providers to ensure compliance and reduce risks. Choosing the right provider is important for a successful transfer pricing strategy.

Define Your Needs

Ensure the specific services that are required with the inclusion of documentation, policy development and litigation support. Detecting the industries that are relevant to the business operations, look for providers with certain experience within the sector. Consider the countries or regions where the transactions occur within, providers with specific knowledge of local regulations are valuable.

Evaluate Potential Providers

Check on the provider’s track record, client base and industry recognition. Look for an organisation with a strong reputation for expertise and sustainable practices. Inquire on the qualifications and experience of the team members that will be working on the project, consult professionals with the needed certifications and advanced degrees
.
Ensure to check on the provider’s approach to transfer pricing analysis and transfer pricing services. Understand if their methodology matches with the international standards and practices. Check on the provider’s communication style and responsiveness, find an organisation that values clear and timely communication.

Obtain Proposals and Compare

Invite the shortlisted providers to find detailed proposals outlining their approach, methodology, team composition and fee structure. Understand the proposals carefully and take factors into mind like cost, experience, methodology and proposed timeline. Always ask clarifying questions to understand the proposal and provider’s capabilities.

Consider Additional Factors

Check on the provider’s usage of technology and tools to boost efficiency and accuracy for transfer pricing analysis. Understand the provider’s project management approach and if they’ll keep the consumer informed through the process. Check on references from other clients to get an insight on the provider’s performance and client satisfaction. Find out if the provider’s fit culturally for the organisation, look for an organisation that has the same values and communication style for smoothly integrating transfer pricing in Dubai.

Build a Long-Term Relationship

Understand the provider’s approach for the ongoing support and maintenance for the transfer pricing services. Find a provider that can detect changes in regulation and the right practices. Create a collaborative relationship with the given provider to curate a beneficial partnership for integrating transfer pricing in Dubai.

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]]> https://bazaaraccounting.com/how-to-choose-the-right-transfer-pricing-service-provider-for-your-business/feed/ 0 DEWS – DIFC Employee Workplace Savings https://bazaaraccounting.com/dews-difc-employee-workplace-savings/ https://bazaaraccounting.com/dews-difc-employee-workplace-savings/#respond Wed, 05 Feb 2025 04:48:59 +0000 https://bazaaraccounting.com/?p=8768 The Dubai International Financial Centre (DIFC) has restructured the end-of-service benefit and implemented the progressive contribution plan called DEWS on February 1, 2020. DEWS provides the employees to have a professionally-managed contribution with the opportunity to earn investment returns. It aligns with international standards and also allows the employees shape their financial future in a […]

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The Dubai International Financial Centre (DIFC) has restructured the end-of-service benefit and implemented the progressive contribution plan called DEWS on February 1, 2020.

DEWS provides the employees to have a professionally-managed contribution with the opportunity to earn investment returns. It aligns with international standards and also allows the employees shape their financial future in a cost-effective manner.

Corporate Tax Consultancy in Dubai

Responsibilities of Employer

ENROLL

Set up an account as an employer.

SUBMIT

Upload the list of eligible employees along with their contributions.

TRANSFER

Make the contribution payment through the provided bank account.

MAINTAIN & UPDATE

Monitor any changes in employee information.

Contributions

  • – Mandatory – The statutory employer’s minimum monthly contributions are based on the employee’s length of service and percentage of monthly basic salary:
    • – Employees with a period of up to 5 years of service – 5.83% of basic salary
    • – Employees with a period of more than 5 years of service – 8.33% of basic salary
  • – Optional – Employers can transfer an employee’s End-of-Service entitlement into the DEWS Plan which will be treated as a one-off contribution. This can be done with or without employee’s consent
  • – Voluntary – In addition to the employer’s contribution, employees have the option to contribute through salary deductions without minimum amount.
  • DIFC companies have a legal requirement to register into a qualified plan like DEWS.
  • If found no contribution for all eligible employees under DEWS, DIFC will issue a Preliminary Notice with a grace period of 30 days.
  • Any delays in payments will incur penalties.

How BAM Advisors can help you:

  • BAM can help you understand DEWS and its compliance requirements.
  • BAM can assist you on the entire DEWS process from enrollment, preparation, submission, and payment of contributions.
  • BAM ensures accurate and timely submission of monthly contribution.
  • BAM can support comprehensive end-to-end payroll.

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]]> https://bazaaraccounting.com/dews-difc-employee-workplace-savings/feed/ 0 FTA Decision No: 8 of 2024 – Correction of Error or Omission in the Tax Return Submitted to the Federal Tax Authority for VAT https://bazaaraccounting.com/fta-decision-no-8-of-2024-correction-of-error-or-omission-in-the-tax-return-submitted-to-the-federal-tax-authority-for-vat/ https://bazaaraccounting.com/fta-decision-no-8-of-2024-correction-of-error-or-omission-in-the-tax-return-submitted-to-the-federal-tax-authority-for-vat/#respond Thu, 16 Jan 2025 09:47:16 +0000 https://bazaaraccounting.com/?p=8746 An overview of FTA’s requirements for Correcting error or omission in VAT returns: In the ever-evolving landscape of tax regulations, staying informed and compliant is crucial for businesses and individuals alike. The Federal Tax Authority (FTA) recently issued Decision No. 8 of 2024, shedding light on the actions required to be taken to correct an […]

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An overview of FTA’s requirements for Correcting error or omission in VAT returns:

In the ever-evolving landscape of tax regulations, staying informed and compliant is crucial for businesses and individuals alike. The Federal Tax Authority (FTA) recently issued Decision No. 8 of 2024, shedding light on the actions required to be taken to correct an error or omission in the Tax Return submitted to the Federal Tax Authority for VAT.

The new guidelines outline a structured approach to rectifying errors or omissions in previously submitted VAT Returns, emphasizing transparency, accountability, and procedural clarity. According to the decision, if the taxpayer discovers an error or omission in the Value Added Tax (VAT) Return submitted to the authority where there is no difference in the due tax, they shall correct such error by submitting a Voluntary Disclosure if any of the cases stated in below occurs.

Cases of error or omission without a difference in due tax:

The cases of error or omission in the tax return where there is no difference in due tax are as follows:

  • Reporting Standard Rated Taxable Supplies in relation to an Emirate in the box of another Emirate.
  • Incorrect reporting of Zero-Rated Taxable Supplies, whether by understating or overstating.
  • Incorrect reporting of Exempt Supplies, whether by understating or overstating.

This decision shall be effective from 01 January 2025.

HOW BAM TAX ADVISORS CAN ASSIST YOUR COMPANY

  • We can help conduct a comprehensive review of your VAT returns to identify potential errors or omissions in line with FTA guidelines.
  • Our team can assist you in preparing and submitting Voluntary Disclosure forms to ensure accuracy and compliance with FTA requirements.
  • Our experts provide guidance to keep you informed of all regulatory changes, including updates to VAT laws and decisions, to ensure ongoing compliance.

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]]> https://bazaaraccounting.com/fta-decision-no-8-of-2024-correction-of-error-or-omission-in-the-tax-return-submitted-to-the-federal-tax-authority-for-vat/feed/ 0 Accounts Payable Outsourcing: A Solution for Small Businesses and Large Enterprises Alike https://bazaaraccounting.com/accounts-payable-outsourcing-a-solution-for-small-businesses-and-large-enterprises-alike/ https://bazaaraccounting.com/accounts-payable-outsourcing-a-solution-for-small-businesses-and-large-enterprises-alike/#respond Mon, 13 Jan 2025 08:31:56 +0000 https://bazaaraccounting.com/?p=8717 Accounts Payable (AP) is an important part for all organizations, the process includes invoices, processing payments to suppliers and balancing accounts. This process can take up a lot of time and is complicated. It is important to keep and maintain strong vendor relationships to ensure right financial records. AP Outsourcing Outsourcing AP can provide an […]

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Accounts Payable (AP) is an important part for all organizations, the process includes invoices, processing payments to suppliers and balancing accounts. This process can take up a lot of time and is complicated. It is important to keep and maintain strong vendor relationships to ensure right financial records.

AP Outsourcing

Outsourcing AP can provide an array of advantages to organizations of all sizes. Some of the advantages are cost reduction as organisations can significantly minimize labour costs that are related to hiring and training AP staff. Hiring accounts payable outsourcing companies can also better operations and reduce errors which leads to less operational expenses.

Outsourcing can also boost AP processes which can result in quicker invoice processing and payment cycles. This leads to increased cash flow and better vendor relationships. It also improves accuracy and minimizes all risks of errors from happening like duplicate payments or missed discounts. AP outsourcing offers flexibility to scale up or down as the organisations require change. This is apt for businesses that go through rapid growth or seasonal changes.

Organisations can prioritise core competencies and strategies, this leads to boosted productivity and innovation.

The account outsourcing services majorly revolves around a few steps. Invoices are first received electronically which is then entered to the AP system. Invoices are then verified for accuracy and approved by the right personnel.
Then the payment is processed and is sent to suppliers at the right time. Accounts are reconciled and reports are curated for analysis and compliance.

How to Choose an AP Outsourcing Provider

It is essential to consider a few factors while selecting accounts payable outsourcing companies. It is best to look for a provider with a good track record and expertise in AP processes.
Make sure that provider utilises enhanced technology and strong security measures to safekeep financial information. The provider should offer scalability to accommodate an organisation’s changing needs. Quick communication and customer service is important for a good outsourcing partnership. Understand the provider’s pricing model to make sure it fits within the budget and objectives of the organisation.

AP outsourcing is the best decision for organisations of all sizes. Balancing the expertise of a provider can help organizations better efficiency, minimise costs and better the financial performance of an organisation. Even if your a small business owner or corporate worker, it is recommended to utilise account outsourcing services to better operations and achieve business goals

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]]> https://bazaaraccounting.com/accounts-payable-outsourcing-a-solution-for-small-businesses-and-large-enterprises-alike/feed/ 0 UAE Transfer Pricing Disclosure Form https://bazaaraccounting.com/uae-transfer-pricing-disclosure-form/ https://bazaaraccounting.com/uae-transfer-pricing-disclosure-form/#respond Mon, 13 Jan 2025 07:57:18 +0000 https://bazaaraccounting.com/?p=8701 Important Tax Alerts The UAE Federal Tax Authority (FTA) has recently published the Transfer Pricing Disclosure Form, a key compliance document that UAE business entities are required to submit alongside their UAE Corporate Tax Return As prescribed in Article 55 of the Corporate Tax Law, all taxable persons who undertake transactions and arrangements with Related […]

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Important Tax Alerts

  • The UAE Federal Tax Authority (FTA) has recently published the Transfer Pricing Disclosure Form, a key compliance document that UAE business entities are required to submit alongside their UAE Corporate Tax Return
  • As prescribed in Article 55 of the Corporate Tax Law, all taxable persons who undertake transactions and arrangements with Related Parties and Connected Persons should file the Transfer Pricing Disclosure Form to ensure compliance with Transfer Pricing Rules.
  • The Transfer Pricing Disclosure Form now plays a vital role in ensuring transparency for related party transactions undertaken by businesses
  • Therefore, businesses are required to assess all related party and connected person transactions, ensuring that all transactions are conducted at Arm’s Length and benchmarked against the prevailing market price.

New Tax Updates:

  • According to the recent Corporate Tax Guide on Tax Returns (CTGTXR1) issued by the FTA, all taxable persons are required to disclose transactions with the Related Parties and Connected Persons in the EmaraTax Portal, subject to specified materiality thresholds.

Special Notes:

  • The TP Disclosure Form is now available in the EmaraTax Portal and is integrated into the UAE Corporate Tax Return, so it is not a separate form. This form can only be accessed when the due dates for the Corporate Tax return approach. Currently, it is only available to taxpayers with a CT return due on 31st December 2024.
  • The form must be submitted alongside the CT return within 9 months from the end of the first tax period and for each subsequent year.

KEY SECTIONS OF THE TP DISCLOSURE FORM

1. Related Party Schedule

  • Name of the Related Party
  • Country of Tax Residence
  • Corporate Tax TRN/TIN (If available)
  • Transaction Type (Goods, Services, Intellectual Property, Interest, Assets, Liabilities, Others)
  • Transfer Pricing Methods applied (CUP, RPM, CPM, TNMM, PSM)
  • Gross Income/Expenditure
  • Arm’s Length Value
  • Tax adjustment (If any)

New Tax Updates:

This schedule should be completed by all taxable persons whose aggregate value of related party
transactions during the tax period exceeds AED 40 million in the Financial Statements/at market value.

Only the aggregate related party transactions per category exceeding AED 4 million need to be
disclosed.

How BAM Tax Advisors can assist you:

  • To recognize and analyse all applicable domestic and foreign related party transactions undertaken by the company within the Group.
  • Performing TP Functional Analysis (FAR Analysis) to understand the functions performed, risks managed and controlled, and assets utilized in connection with the intercompany transactions
  • To assess and identify the most appropriate transfer pricing (TP) method for each type of intercompany transaction to substantiate the arm’s length nature and pricing of respective transactions.
  • Performing formal benchmark analysis and assisting in necessary tax adjustments to the books of accounts prior to finalizing financial statements for the first tax period.
  • Providing professional advisory for any further TP adjustments where it is necessary for the finalization of financial statements.

Extracts of the Related Party Schedule in the EmaraTax Portal

KEY SECTIONS OF THE TP DISCLOSURE FORM

2. Connected Person Schedule

  • Name of the Connected Person
  • Corporate Tax TRN/TIN (If available)
  • Payment/Benefit
  • Description of such payment or benefit
  • Value of such payment/benefit
  • Market Value of the service/benefit
  • Tax adjustment (If any)

New Tax Updates:

This schedule should be completed for each Connected Person where the aggregate Payment/benefit exceeds AED 500,000 per Connected Person together with its Related Parties

How BAM Tax Advisors can assist you:

  • This schedule should be completed for each Connected Person where the aggregate Payment/benefit exceeds AED 500,000 per Connected Person together with its Related Parties.
  • Performing formal Arm’s Length remuneration benchmark analysis to substantiate the arm’s length price (Market Value) of payments/benefits to connected persons
  • Assisting in necessary tax adjustments (if deemed relevant) to the books of accounts as per the arm's length range of remunerations, prior to finalizing financial statements for the first tax period.

Extracts of the Related Party Schedule in the EmaraTax Portal

KEY SECTIONS OF THE TP DISCLOSURE FORM

3. Documents Requirement List

  • Financial Statements
  • Local File
  • Master File
  • Documentation to support the market value of Financial Assets/Liabilities at the start of the first tax period
  • Tax residency certificate in the foreign country
  • Evidence of tax paid in the foreign jurisdiction.
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New Tax Updates:

Except for Financial Statements, taxpayer will be allowed to submit the Tax Return without attaching
above listed documents by providing a valid reason for the same. 

However, all required documents must be maintained for a period of 7 years following the end of the Tax Period in term of the record keeping requirements prescribed in the Corporate Tax Law. 

In compliance with TP documentation requirements, Local file, Master file and any other information (i.e., Benchmark reports) to support the Arm’s Length nature of Related Parties/Connected Persons transactions must be submitted within 30 days upon request from the FTA.

How BAM Tax Advisors can assist you:

  • Preparation of necessary TP documentation to substantiate the market value in compliance with UAE TP rules and regulations:
  • Local File
  • Master File
  • Benchmark Reports
  • Intercompany Agreements
  • TP Memorandum
  • Any other supporting documents
  • Review the existing intercompany agreements/internal policy from the UAE TP perspective and assist in revising them if necessary, as per the guidance provided by the UAE transfer pricing guide.

Extracts of the Related Party Schedule in the EmaraTax Portal

KEY TAKEAWAYS

  • To streamline year-end Transfer Pricing compliances, taxpayers should ensure that related party and connected person transactions are in compliance with arm’s length principles by implementing a formal TP policy, supported by benchmarking analysis.
  • The UAE TP Disclosure form provides a snapshot of a company’s TP positions, allowing the tax authorities to quickly identify the Arm’s Length nature of related party/connected person transactions and areas for scrutiny. Failure to submit the TP Disclosure Form or provide accurate information can result in significant penalties, including fines, adjustments to taxable income and increased scrutiny from tax authorities.
  • In the connected person schedule, there is no disclosure section for the transfer pricing method adopted for payments/benefits with connected persons. However, the taxpayer should substantiate the market value with a formal benchmark analysis
  • Transfer Pricing regulations do not apply for transactions between entities in the same tax group (parent and subsidiary) and there is no reference to such transactions in the TP Disclosure form. Hence, it may not be required to record transactions within the Tax Group.

HOW BAM TAX ADVISORS CAN ASSIST YOUR COMPANY

  • BAM can assist you in identifying related party and connected person transactions that trigger TP compliances under the UAE Corporate Tax Law and the UAE Transfer Pricing Guide by performing TP impact assessments.
  • BAM can guide to ensure that all related party transactions are at the Arm’s Length Price by performing formal benchmark analysis and help manage any associated risks for future penalties and TP audits by the FTA.
  • BAM is proficient in devising tax-efficient strategies tailored to meet your TP requirements, offering comprehensive assistance in discerning the optimal tax-efficient approaches for setting internal TP policy for intercompany transactions.
  • BAM can assist in preparing the necessary TP documentation, such as intercompany agreements, benchmark analysis, TP memorandum, TP Disclosure Form, FAR analysis, Local file, Master file and other supporting documents to ensure compliance with UAE TP rules and regulations.
UAE Transfer Pricing Disclosure Form

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]]> https://bazaaraccounting.com/uae-transfer-pricing-disclosure-form/feed/ 0 Insights Into the UAE Corporate Tax Return Filing, Deadlines and Documentation https://bazaaraccounting.com/insights-into-the-uae-corporate-tax-return-filing-deadlines-and-documentation/ Mon, 06 Jan 2025 06:08:21 +0000 https://bazaaraccounting.com/?p=8642 The introduction of Corporate Tax (CT) in the UAE marked a pivotal advancement in the nation’s tax framework. With the assumption that registration processes are complete, the focus now shifts to the critical aspects of CT return filing, including adherence to submission deadlines, compliance with regulatory criteria, and fulfillment of documentation requirements. Accurate and timely […]

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The introduction of Corporate Tax (CT) in the UAE marked a pivotal advancement in the nation’s tax framework. With the assumption that registration processes are complete, the focus now shifts to the critical aspects of CT return filing, including adherence to submission deadlines, compliance with regulatory criteria, and fulfillment of documentation requirements. Accurate and timely filing remains essential to ensuring compliance and mitigating potential liabilities.

WHO SHOULD FILE THE CT RETURN?

A Taxable Person (TP) is required to submit a Tax Return and pay any Corporate Tax due (if any) to the FTA within 9 months of the end of its Tax period.

WHAT IS YOUR TAX PERIOD?

AN OVERVIEW OF THE CT RETURN

A Tax Return enables a taxpayer to report their taxable income, incorporating any applicable adjustments, exemptions, and reliefs claimed. The key sections of the Tax Return include the following:

TRANSFER PRICING REQUIREMENTS

Transfer pricing refers to the pricing of transactions or arrangements between Related Parties or Connected Persons that are influenced by the relationship between the transacting parties. Hence, when transacting with Related Parties or Connected Persons, Taxable Persons should ensure the transfer price between the parties is at Arm’s length or market value and maintain supporting Transfer Pricing documentation as required by the FTA. Benchmarking analysis plays a critical role in this process by comparing a company’s intercompany prices with those of similar transactions between unrelated parties under comparable conditions. According to recent updates from the FTA, there is a TP Disclosure Form that needs to be filled out for related parties and connected person transactions, subject to the conditions listed below.

DOCUMENTS REQUIRED TO BE SUBMITTED ALONG WITH CT RETURN

During the process of completing the Tax Return, the Taxable Person may be required to upload certain documents. The specific requirements will depend on factors such as the category of the Taxable Person and the reliefs claimed. While the list provided below includes key documents, it is not exhaustive, and other documents may also be required that are not mentioned here.

  • Financial Statements - This is mandatory to be attached by all Taxable Persons unless you
  • Documentation to support the market value of the Financial Assets/Liabilities at the start of the first Tax Period - This is optional and will appear to you if you sold Qualifying Financial Assets/Liabilities subject to an adjustment under the transitional rules.
  • Tax residency certificate in the foreign jurisdictionThis is optional and will appear to you if you indicated you are tax resident in a foreign jurisdiction under an applicable Double Taxation Agreement.
  • Evidence of tax paid in the foreign jurisdictionThis is optional and will appear to you if you have claimed a Foreign Tax Credit in the Tax Return.
  • Local File.
  • Master File.
  • Confirmation of ownership and the right to exploit the Qualifying Intellectual Property – Patent
  • Confirmation of ownership and the right to exploit the Qualifying Intellectual Property - Another right functionality equivalent to a patent.
  • Confirmation of ownership and the right to exploit the Qualifying Intellectual Property - Another right functionality equivalent to a patent.
  • Record of Qualifying Expenditures and Overall Expenditures incurred.
  • Record of Overall Income derived from the Qualifying Intellectual Property
  • Documentation to support the market value of the Qualifying Immovable Property at the start of the first tax period.
Insights Into the UAE Corporate Tax Return Filing, Deadlines and Documentation

HOW BAM TAX ADVISORS CAN ASSIST YOUR COMPANY

  • We can assist in identifying the documents required based on your tax profile and ensure they are correctly prepared and ready to submit to FTA. This includes gathering both mandatory and optional documents that may be relevant.
  • Our team can provide expert advice on available reliefs and exemptions, helping you to determine which you may qualify for, and ensure all necessary documentation to support claims is included in the return
  • We can help in reviewing the financial statements if needed, ensuring they meet the required standards and are accurately reflected in the tax return.
  • We offer support in filing the tax return in the FTA portal and uploading the necessary documents, ensuring that all steps are completed properly and efficiently.

The post Insights Into the UAE Corporate Tax Return Filing, Deadlines and Documentation first appeared on Mazzoni Accounting.

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