Corporate businesses in the UAE are the key drivers for the growth and development of every individual. Keeping a book of accounts helps in maintaining ethical business practices. To keep up with the pace and growth of business, all businesses in the UAE need to comply with corporate taxation to achieve success.
In this blog, we shall discuss the importance and benefits of keeping a book of accounts for all businesses in the UAE to comply with corporate taxation.
Benefits of keeping a book of accounts for all businesses in UAE for Corporate taxation
There are major benefits of maintaining a book of accounts for all businesses in the UAE for corporate tax purposes. They are as follows:
- Historical data for regular audits
Accounting and bookkeeping provide the exact information of historical data which is important for future growth of the business. Analyzing past financial performance can help in audits as well as plan future development of the company. Remember, great businesses are subject to audits. Correctly maintained accounting data can help boost smoother, easier, more accurate, and time-saving audits. This is very crucial for business records to comply with corporate taxation.
- Profitable ventures and financial growth
With complete and proper financial records, corporate businesses can make profits. Keeping a book of accounts can help businesses focus on products and services to strategize their growth.
Accurate financial data in the form of a books of accounts is a must for every business. It provides financial stability for every business to achieve its goals and helps calculate tax effectively every year.
- Timely tax calculations and payments
In UAE, the majority of the companies comply with and follow the International Financial Reporting Standards (IFRS) or United Arab Emirates Generally Accepted Accounting Principles (UAE GAAP) to achieve accuracy for financial records and corporate taxation. It is important to form accurate financial statements under IFRS for corporate taxation by making the correct important adjustments. SMEs having less than AED 3 millions sales revenue can follow IFRS for SMEs or Cash Basis of Accounting.
- Avoiding penalty
All businesses are required to establish and maintain a book of accounts as per federal law for UAE Corporate taxation. It is important to maintain accuracy for the same. A penalty of AED 50, 000 to AED 500, 000 and a maximum of 3 years of jail for not following legal practices are imposed.
Giving false information and not updating correct financial records for corporate tax in UAE ranges fine from 100, 000 to 500,000 AED.
- Prepares you for the taxation
Keeping a book of accounts helps you to make the future ready for taxation. This is one of the best ways to compute tax the right way. Moreover, you can also keep a close eye on your business while updating the financial statements. Proper and accurate bookkeeping of accounts is very important for tax-related compliance.
- Analyze your business’s financial health
Monitoring your business is very essential to achieve business goals. Accounting gives you a bird-eye view of completely different aspects of the financial data of your business. It helps you deal with financial insights and transactions which include sales, purchases, profits or loss statements, cash flow statements and more. This is a very important aspect of financial success and maintaining business stability.
When it comes to business, a solid track record of your finances is a must. Maintaining a book of accounts improves the chances of business success provided they are maintained accurately. A correct evaluation of a business helps to give concrete information about profits and losses. This is also important for taxation purposes.
Conclusion
Accounting and bookkeeping by businesses for corporate taxation is the basic practice and necessity for the proper functioning of corporate business in UAE. Apart from corporate taxation, bookkeeping of accounts also provides a strong foundation for the right decision-making, sustainable growth, and organized work for all businesses in the UAE and globally.
Let us not forget that Dubai is considered a global business hub. The accountants, auditors, and CAs in the UAE are constantly involved and focused on dealing with financial regulations and welfare to comply with corporate taxation in the UAE. Accounting and bookkeeping are not just limited to your taxation purposes. It has widespread benefits for the holistic development of your company.
Auditac International has professional expertise in keeping a book of accounts for all businesses in the UAE for corporate taxation with high ethics standards. Get connected with one of the best financial experts in the UAE for corporate taxation! https://auditacinternational.com/disclaimer/
