Why Suddenly Book Keeping is necessary in UAE
United Arab of Emirates is known as the most attractive place around the globe in terms of Business, trade, and tourism.
People come from different countries and set up their ventures in different structures i.e. Mainland Company, Free zone Company, Offshore Entities depending on their requirements.
There are different forms of companies having distinct structures :
- Many Companies in UAE are involved in Marketing and Sales of their products in the UAE, also, manufacturing and sales are done from a head office located in different countries.
- Many Companies are into a trading business like import of goods from a foreign land and exporting outside. sometimes delivery is through UAE but many a time it is delivered directly too.
- Many Companies registered in Free zone are mainly engaged in Imports and Exports only.
- There were many companies which were not maintaining their books of accounts in UAE, but it has been made imperative after VAT implementation.
Bookkeeping in a simple sense means recording all the transactions of an organization such as purchases, sales, bank, cash, receipts, payments, expenses etc. Only with the help of books of accounts, one can ascertain the actual financial position of the organization. For taking any financial decision, forecasting business sustainability, identifying critical problems and to receive any fund books of accounts plays a very pivotal role.
However, after the implementation of VAT (i.e. 1st January 2018) Book Keeping has become more crucial for UAE Businesses. Books of account not only help in taking Financial decisions but proper accounting of books also helps in recording VAT as per Federal Decree Law and it?s Executive Regulations. Only by the maintenance of proper books once can effectively calculate the correct VAT payable and VAT Credit and save oneself from the hefty penalties levied by FTA. There are substantial Complications in Federal Decree Law of VAT which requires expertise, guidance of Accounting and Auditing Firms in Dubai. Various Account Management Firms in Dubai provide bookkeeping services.
So to check whether you are liable for Book Keeping or not under Federal Law No. (7) of 2017 on Tax Procedures, consult the best tax consultant in UAE and avoid penalties by FTA.
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