Sun, Nov 24, 2024 | Jumada al-Awwal 22, 1446 | DXB ktweather icon0°C

UAE corporate tax: Don't wait until last minute to file returns, companies urged

Expert warns firms against getting into 'creative accounting' practices to avoid taxes

Published: Wed 31 Jul 2024, 4:19 PM

Updated: Wed 31 Jul 2024, 8:28 PM

Top Stories

With the simple process laid down for corporate tax compliance, companies are urged to meet the requirements on time, industry experts said on Wednesday.

While speaking during a conference organised by Khaleej Times, they stressed that firms should not wait for the last minute and due date to file their tax returns.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

Dinesh Khator, director of tax at Deloitte, said that when interpreting the provisions of the tax law, firms are not only required to look at the law, but also at the decisions and notices issued by the authorities.

“The message I want to communicate is that let us not wait until the last day of the due date. Let us do it as early as possible so that we are not running into a situation where penalties are levied by the authorities. The second aspect is the maintenance of records and the law requires you to maintain books for a period of seven years or before the completion of tax assessment,” he said during the conference titled Corporate Tax UAE Decoded.

“Compliances are not very burdensome in the UAE. We don’t have advanced tax-related compliances. We don’t have withholding tax-related compliances. So compliance is only about the filing of the UAE corporate tax annual return and along with that there is a need to file a TP disclosure form as well,” he added.

He stressed that companies should closely follow the corporate tax regulations within due dates to avoid penalties and carefully look at the dates for registration, which is the first critical step in the process.

Part of the check list

Manish Arora, tax director at Schneider Electric, pointed out that the compliance burden on companies is "not much".

“We have the simplest compliance regime in the UAE. Even having a consultant on the compliance part is not a bad approach to follow. We should ensure that our compliance is done internally,” he said, advising firms to embrace corporate tax and just make it a normal part of the check list.

Nimish Makvana, senior partner at Crowe UAE, called on businesses that are subject to corporate tax to pay their dues. He strongly advised against getting into “creative accounting” practices and new ideas to avoid taxes.

While delivering a welcome address, Ravi Tharoor, CEO of Khaleej Times, said the introduction of the UAE’s corporate tax regime marked a significant shift in the economic environment.

“The UAE’s strategic position between East and West has made it a key player in global finance. With strong infrastructure and business-friendly policies, the UAE continues to attract investment and foster economic growth,” he said, adding that businesses in the country must ensure compliance and optimise tax benefits.

Maintain records

While speaking during a panel discussion on implementing effective tax strategies for SMEs, Rishab Jain, group tax and compliance manager at Galadari Brothers, asked SMEs to maintain records for all the entities such as financial statements, sales numbers, and payroll expenses.

“SMEs have the option to choose what accounting measures they want to follow. They need to maintain records for seven years. They have the option of accounting for IFRS for SMEs. One of the major points is they need to make sure that they use the right accounting software as maintaining books physically might be difficult, hence, it is better to have digital records,” he said during the panel discussion.

He noted that SMEs should get their audit done properly within time.

“Act fast, don’t wait for the last minute for compliance purposes. Be prepared with all the laws. Make sure you are acting on time and waiting for the last time,” he added.

Prateek Bothra, vice-president for tax at Gulf Islamic Investments, said there should be ample training for the staff to ensure compliance as there have been significant Cabinet decisions and updates.

ALSO READ:



Next Story