Guiding Jewelry Stores Through Corporate Tax in the UAE

The introduction of corporate tax brings changes for jewelry businesses. Our expertise helps them understand implications and prepare effectively.

Understanding the New Tax Laws

Corporate tax in the UAE applies to profits over 375,000 AED. A 9% rate is charged on taxable income. Losses can be carried forward for 5 years to offset future profits. Key income sources for jewelry stores include:
Key sources of income for jewelry stores include:

• Precious metal sales from gold, silver, etc.
• Gemstone trading like diamonds and precious stones
• Revenue from jewelry repairs and custom designs

To calculate taxable profits, income is reduced by allowable expenses. Eligible costs include:

• Purchase of raw materials like metal and gems
• Employee wages and other staff expenses
• Utilities, rent, insurance and other overheads

The legal structure as a mainland company or freezone entity also impacts tax calculations.
Knowing these core rules helps businesses estimate their potential liabilities.

Free Tax Impact Assessments

We offer complimentary tax impact assessments to analyze corporate tax effects. The process includes:

Financial review:

• Income statements, balance sheets from the last 3 years are studied

Business analysis:

• Sources of revenue and profitability trends are evaluated
• Operational expenses are examined

Compliance check:

• The legal structure, ownership details are checked
• Related group business relationships are reviewed

Forecasting:

• Past income data is used to project taxable profits
• Potential tax bills or refunds are estimated

This gives valuable clarity on expected tax obligations for planning purposes.

Optimizing for Tax Compliance

Adopting best documentation practices eases future filings:

Record keeping:

• Digital invoices for all supplies, sales and services are maintained
• Receipts for major assets, utility bills are filed by date

Payroll processing:

• Wages are paid through registered outsourcing to fully claim exemptions

Accounting software:

• Integrated modules track transactions and auto-compute tax outcomes

Our recommendations streamline daily operations for smooth compliance.

Audit Preparation

We strengthen documentation systems to ready jewelry stores for potential reviews:

Organization:

• Financial records from the last 5 years are arranged in digital folders
• Files follow logical naming formats for easy retrieval

Storage:

• Documentation is securely backed up on cloud servers
• Hard copies are securely stored off-site if required

Training:

• Employees handling accounts are trained to explain source files clearly

This rigorous planning results in calm, accurate audits.

Conclusion

The introduction of corporate tax in the UAE opens a new chapter for jewelry businesses. We aim to ease this transition and help jewelry stores adapt successfully through our advisory services. By conducting thorough tax impact assessments, we provide clear guidance on potential financial implications and strategies. Our recommendations for optimized daily processes and robust documentation systems pave the way for smooth ongoing compliance. Furthermore, our pre-audit planning methodology delivers audits with minimal issues. Our multi-faceted support addresses jewelry enterprises’ top concerns regarding corporate tax registration, ongoing filings and reviews. Our expertise stems from deep understanding of this industry’s unique dynamics as well as UAE’s evolving tax regulations. Jewelry business owners can hence achieve focused growth with tax matters in reliable hands. For a comprehensive evaluation of your tax position, book a consultation with our advisors today.

Frequently Asked Questions