A conscious shift in mindset and a deep awareness are necessary for businessowners to remain compliant and avail of the benefits, said experts at a panel discussion on UAE’s Competitive Advantages with Corporate Tax held during the UAE and Growth and Investment Forum organised by Gulf News.
“For far too long, businesses here never had any compliances,” explained Nirav Shah, Director of Fame Advisory. “But now, there needs to be a conscious shift in the mindset. You need to have robust accounting and compliance. If you have the internal discipline of maintaining proper books, follow IFRS to a T, then you will automatically optimise your taxes. In order to do that, however, you need to be aware and accounting discipline needs to be ingrained in the system to make sure the outcome is correct.”
Sheetal Soni, Partner, MICS International DMCC, pointed out that the devil’s in the detail, highlighting the fact that the initial 60-odd pages of corporate tax regulation have today evolved to 2,000-odd pages. The Federal Tax Authority has been regularly releasing clarifications and details supplementing the law. “One of the things that FTA has been doing exceptionally well has been raising awareness through educational seminars,” said Soni. Businesses need to understand the details of the law to take advantage of the available benefits. “Smart businesses, especially those in the free zone, have the potential to benefit from exemptions within the framework of tax regulation.”
However, it’s a fine line between adhering to the details and abusing them, explained Jaison Mandapathil, Manager – Compliance & Assurance, Hussain Al Shemsi Chartered Accountants. “One of the major provisions in the tax law is the anti-abuse clause where FTA assesses and identifies whether a transaction or arrangement has a tax abuse element to it, whether it is for a valid commercial use or for gaining an undue tax advantage.”
To prevent potential fallouts and compliance issues, businesses must allocate adequate resources to capture and record data accurately.
Accounting software can help with that, but first detailed tax planning is important, says Nandaraja Shetty, Deputy General Manager, UAE, Tally Solutions.
“What businesses need to do first is have a relook at their books of accounts and restructure to make sure they are well classified. Then the accounting software comes into play. Once you have brought discipline into your accounting, the software can import data and generate compliant income statements when they are ready to file corporate tax.”
Venue Partner of The UAE Growth and Investment Forum
The Venue Partner of the forum is Jumeirah Emirates Towers, which offers easy access to Emirates Towers metro station. A preferred venue for events and conferences in Dubai, Godolphin Ballroom features beautifully crafted ceilings and crystal chandeliers and can accommodate up to 900 guests.
Sponsors and Partners
The Platinum Sponsor for the event is Free Zones Authority of Ajman, Silver Sponsor is Creative Zone and Technology Partner is Tally. Support Partners of the event are Hussain Al Shemsi Chartered Accountant, TMSL, FAME Advisory, Ahmad Alagbari Chartered Accountants, BSA Law, Dhanguard, Hawksford, Fast Business Center, MICS, Triliv, Lawgical Group and Neeja Corporate Services.
