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Economic Substance Regulations In UAE
Accounting 2021-04-07 From: Mr. Abbas

The European Union (EU) has blacklisted those countries that don’t have criteria to meet with EU fair taxation, tax transparency, and measurement of the (BEPS)   base erosion of profit shifting.

Economic Substance Regulations: In 2019, the UAE government has introduced the Economic Substance Regulation (Cabinet of Ministers Resolution No. 31 of 2019), in UAE for un-blacklisted from the list of EU.  After implementation of the Economic Substance Regulation (ESR) system, UAE has been removed from the list of blacklisted countries by the EU. On 10 August 2020, UAE cabinet Minister issued Cabinet Resolution No. 57 of 2020 Concerning Economic Substance Requirements. Which gives the revision set of  Economic Substance Regulations. For the implementation of the provisions of the economic substance requirement and Ministerial Decision No. 100 of 2020 on the Issuance of Directives was introduced on 19 August 2020. This decision also repeals and replaces Cabinet of Ministers Resolution No. 31 of 2019 and Cabinet of Ministers Resolution No. 58 of 2019. 

 

UAE Regulation Authorities 

 

?Federal Entities

Ministry of Economy

Central Bank

Insurance Authority

Security and Commodities Authority

?Free Zones

Abu Dhabi

Abu Dhabi Global Market

Media Zone Authority Dhabi

Abu Dhabi Airports Free Zone

Abu Dhabi Ports

MASDAR City

Dubai 

Dubai Airport Free Zone

Dubai Healthcare City Authority

Dubai International Financial Center

Meydan

Dubai South / Dubai Aviation City 

Jebel Ali Free Zone Authority/ DP World

Dubai World Trade Center

International Humanitarian City?

Dubai Development Authority

Dubai Silicon Oasis

Dubai Maritime City

Dubai Multi Commodities Centre

?Sharjah

Sharjah Airport International Free Zone Authority

??Hamriyah Free Zone Authority

Sharjah Media City (Shams)

Sharjah Publishing City

Sharjah Research Technology and Innovation Park

Sharjah Healthcare City  

Ajman

Ajman Free Zone Authority

Ajman Media Free Zone Authority

Ras Al-Khaimah

RAK International Corporate Centre

Ras Al Khaimah Economic Zone

RAK Maritime City 

Um Al-Quwain

UAQ Free Trade Zone

Fujairah

Fujairah Free Zone

International Free Zone Authority 

Fujairah Creative City?

??

Above table source link here.

 

Scope of the Economic Substance Regulation

Natural persons, sole proprietors, trusts, and foundations regulations do not apply. It’s applied to:-

  • Any incorporated legal person.
  • unincorporated partnership registered in the license of the following activities.

 

  1. Banking Business
  2. Insurance Business
  3. Investment Fund Management Business
  4. Lease Finance Business
  5. Headquarters Business
  6. Shipping Business
  7. Holding Company Business 
  8. Intellectual Property Business
  9. Distribution and Service Centre Business

Relevant business should obey the Economic Substance Regulation requirements:-

  1. Manage all income-generated activities as per ESR.
  2. Activities that directed and managed in the UAE
  3. Consideration level of the activities functions. (i) Businesses should have sufficient full-time qualified employees, (ii) Have sufficient and property physical assets in the UAE. (iii) Bear the amount of the operation expenditure in the UAE.

 

Penalties in Economic Substance regulation (ESR)

Businesses will be penalized if they fail in complying with ESR in UAE.

  1. Businesses get penalized from AED10,000 to AED 50,000 If businesses fail to present adequate ESR and also fail to provide accurate and complete information for the relevant year.
  2. Businesses can get a penalty of AED10,000 to AED 50,000, what if the business is failed to provide accurate and complete information about the exchange with a foreign parent company or ultimate beneficial ownership.
  3. If the business is failed in the second financial year in the above two things then the license could be canceled, not renewed, and withdrawn. Also, get a penalty of AED100,000 to AED 500,00.

 

What is the Economic Substance in Accounting?

All the transaction that has a purpose or related to the reduction of tax liability.  It’s used to evaluate and examine tax to see if there is anything that is abusing the tax law. If tax abuse is found then it will be penalized by the IRS. ESR is most important because in the Substance report we provide full and accurate information about the tax transaction and other transactions in which ESR is applied during the financial year. To get more details about it Feel free to contact us, we will be happy to hear you directly. The main purpose of the Economic substance report is to provide the 

National Assessing Authority with the information of license, assets, income & expenditure, employees, and governance-related to its Relevant Activities in the UAE.

If you have more than a license then you have to provide a report for each license. The Economic substance report is submitted online on the Ministry of Finance portal.

Here is the MOF guide on ESR click here. Hire the best economic substance resorting service and save your business from the penalty and any other harm.

 



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Guide For VAT Deregistration UAE Under VAT Law
VAT 2021-03-31 From: Mr. Abbas

VAT Deregistration means to cancel their VAT registration with FTA.  I noticed in the market there is a lot of confusion going on related to vat registration. Let’s understand about Deregistration. Suppose Business is registered under the VAT but businesses stop making taxable transactions. Then it’s mandatory for a business to cancel their registration with FTA (Federal Tax Authority). The business has to submit the application for deregistration  With the required documents to FTA, then FTA will cancel the registration. 

Deregistration is important as VAT registration and businesses should have a good understanding of which circumstances they should apply for deregistration otherwise they will get heavy plenty from FTA for late application for VAT deregistration. Businesses must apply for VAT deregistration within 20 business days of becoming eligible for  VAT deregistration. If a business gets late then has to pay AED10,000 plenty that is charged by the FTA.

The Tax payable business must know all the procedures of the  Deregistration. The expert advice of the best VAT consultancy services should be taken to know how to register or deregister. On time deregistration and in the right way prevents the plenties.

 

VAT Deregistration Eligibility

It is an online process. Businesses and individuals who are registered can apply for deregistration in two situations.

  1. After registering with VAT If the business annual turnover is not above AED 187,500, They can apply for the Deregistration.
  2. If a business is no longer dealing with the taxable supplies then they have to apply for the deregistration.

Under FTA guidelines Deregistration there are two norms for deregistration.

  1. Compulsory VAT-Deregistration
  2. Voluntary VAT Deregistration

Compulsory VAT-Deregistration

The business tax payable transactions are below the voluntary registration threshold limit. In this condition, the registered business and individuals become eligible for the Compulsory VAT-Deregistration. Businesses must apply for the deregistration to avoid the plenties.

Voluntary VAT Deregistration

The business applied for the Voluntary registration on 1st April after 12 months on 31st March business not made tax payable transaction equal to AED 187,000, The business and individuals shall analyze and evaluate the tax payable transaction for the next 30 days if the taxable supplies will exceed then they can apply for VAT Deregistration in the next 20 days.

 

Guide To Apply For VAT Deregistration

It’s an online process and easily accessible with the FTA portal. To apply for the VAT deregistration, Companies and individuals have to submit the application form to FTA along with required documents and the valid reason then FTA will verify the reason and documents and If the reason is valid then FTA will approve the Deregistration. FTA approves the status of the return, Outstanding tax Payment, and any plenty that is pending. If FTA found any outstanding and plenty then you have to clear them otherwise FTA will not approve the deregistration.

 

Deregistration For VAT Group

The Group vat deregistration is similar to the individual’s deregistration. There only Criteria apply for it.

  1. VAT Deregistration approves when the group is no longer meets the considered conditions.
  2. The tax status of the group may lead to tax evasion then the FTA approves the Deregistration 
  3. If the constituent member of the company is no longer financially associated with the group.

 

Procedure of the VAT Deregistration

Step 1- You have to login into your FTA account. On the homepage, you can see the option of Deregistration.

Step 2 - Click on the Deregistration button then the form will open. Fill the form correctly and send it for review and approval.

Now you have applied for the  VAT Deregistration successfully. FTA will review the application and then confirm it. When FTA approves the Deregistration, you can check the status there will be pre-approved status at the place of the VAT Deregistration. Now you have to submit the final return, after that, you have to clear all the outstanding liabilities in order to complete the VAT Deregistration process. 

Hope this short guide helps you. If you have any questions and doubt feel free to reach risians accounting. Risians accounting is a certified and FTA-approved accounting firm in dubai. Allow us to take care of your business accounting, VAT registration and deregistration, auditing, and other accounting work.

 

 

 

 

 

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What is the Difference Between Internal And External Audits?
Auditing 2021-03-23 From: Mr. Abbas

Being the best accounting firm in Dubai, We are asked by every client that what is the difference between the internal and external audit. So today, we are writing about the internal and external audit differences and similarities. Before start let’s take a look at what is auditing. 

Auditing is the process of inspection and evaluation of the various accounts, a financial statement, etc. To ensure that all the business management accounts are recorded systematically and accurately in the proper manner of accounting law and regulation. By auditing process, auditors detect fraud, error, etc, and save the management or company from potential loss and harm.

 

Purpose of Auditing

The purpose of the auditing is to review the information is right and accurate or not, that is presented in the accounting books and financial accounting books. The presented information in cash flow, balance sheet, income statement, etc are matching right or not. As per Government accounting standards, the auditor evaluates the financial report of the organization. The main purpose of auditing is to find any mistake, fraud, a loophole. If the accounting system is not working as per government law and management or company policy then have to face any loss, harm, and plenty from the government. Well, the future is uncertain nobody can judge that what will happen next? The auditor do a prediction for the organization by a current and previous financial statement and give the opinion. Now you are thinking one side you are saying future is uncertain and now your saying auditor predict the future of the company by the financial statement. Well, We are 100%  agree future is uncertain but the auditor shares their opinion by evaluating the past and current financial health and give advice for accomplish a company-oriented goal or define a new goal. The auditor’s advice helps the organization to take more control over the work and be more productive effectively.

Auditor suggestion is very important for organizations and single-owner businesses.

  1. It helps in achieving the goal or set a new goal.
  2. More control over the business
  3. Save business from fraud.
  4. Auditor report is very helpful for getting fund from investors, bank, etc.
  5. Save the business from the government plenty and legal action against the business. 

 

Generally, auditing is two types are:-

  1. Internal Audit
  2. External Audit

Internal Audit 

In an internal Audit, the Auditor audit the internal environment of the organization and make sure that all the work is going as per rules and regulations, increase the control over the internal environment and make the production department more effective. The auditor gathers all the information and shows the report that contains how business is going, where is a mistake, error, fraud, risk area, etc, how we can reduce the risk, and how we can be more productive. The internal auditor also makes sure that all the implemented policies are working properly.

External Auditing

External auditing is an independent evaluation of financial statements. External is done by the independent outside person of the organization and plays a critical role. The interest of conflict is less likely to happen as compared to an internal audit. External Audit provides valuable reports for business and government. The purpose of external auditing is to review business account to show that the business account is accurate and complete.

 

Internal V/S External Auditing

 

 

Internal Audit

External Audit

Meaning

It’s a continuous process of weekly, monthly, quarterly, and yearly. Performed by the internal audit team of the organization.

It’s conducted by an independent firm of auditing.

Report

An internal audit report is used by the management.

An External audit report is used by the stakeholders.

Opinion 

The opinion is provided to make operation more effective. 

The opinion is provided on the truthfulness and fairness of the financial statement of the company.

Period

Regular Process

Once in a year.

Obligation

According to the organization’s rules and regulations.

According to the UAE ACT.

Purpose

Review the business activities and control over the business.

Check the validity and accuracy of the financial statement.

Range

Management decides the range of the internal audit.

It’s decided by the as per UAE government laws and rules.

 

 

Your Best Auditing Firm - Risianss Accounting 

Being a leading audit firm in Dubai, we have a special audit team who have 20+ years of working experience. Our auditing team provides support for your business accounting and management solution and cover advice & guidance. It doesn’t matter what is your need relating to auditing and accounting. We aim to provide our client’s full insight into their corporate strategies, business processes, and financial reports and deliver tailor-made solutions. Risians Accounting is a registered auditing firm in Dubai. Our Methodology of auditing will minimize your business routine office work and make work more productive effectively.

 

 

 

 

 

 

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Why Should You Get Tax Agent Service in Dubai?
Tax 2021-03-20 From: Mr. Abbas

In the UAE tax agents have been working here for many years to provide legal support to the businesses, but after the introduction of the VAT tax in Dubai on 1st Jan 2018, the demand for the tax agent in Dubai increased rapidly. 

Many issues and difficulties might affect your business badly. So, FTA (Federal Tax Authority) encourages the business owner to hire the tax agent. The tax agent helps the business to run a business smoothly. In UAE, There are many tax-certified agencies, you can hire them and take their services. But Under the roof Risians Accounting & Auditing, you can only get the best to best Tax Agent Service in Dubai. We have top certified players for taxes and have decades of working experience in many different industries and projects.

Our tax agents first understand the framework of business; give advice and assistance for individuals and companies for tax filings and returns. Our consultant discussed every single step deeply which would help the company in saving money and payment of unnecessary taxes along with following government rules and regulations.  

Recommendation: - You can meet with plenty of individual tax agents and tax agent agencies. But you should hire only the perfect tax agent for your business industry. Agent or agency should know your business and should have working experience. To know about this, it’s your responsibility to ask them questions relevant to your business tax-related or accounting. By only doing this you can hire perfect service. Don’t think this and that agent or agency demanding a low or high price. Keep in mind knowledge and experience is important.

 

Why should you hire a tax agent or agency?

  • Make you understand the government policy and regulation because the tax policies are typical only tax agent can understand the policy and those who have only deep tax knowledge otherwise people get confused.

  • Tax agent works as an intermediate between the FTA (Federal Tax authority). Keep the business true with the tax system and increase the awareness regarding tax.

  • Tax agents help businesses in saving money on tax legally.

  • Tax agents always give suggestions and recommendations to run a business smoothly and get the made changes in the business according to the new and existing tax policies.

  • Tax agent consults the business for the registration on the time and ensuring that they meet the registration criteria including Tax Group registrations.

  • Tax agent shares their work experience to make business more profitable. 

  • If a business doing any illegal activity and taxation practice so tax agents can detect it easily and save you from potential legal troubles. For doing business smoothly and keep your business profile clean you need a certified professional tax agent.

  • Tax agents check the records, files, and documents that are maintained by the taxable person for accuracy and also review the tax returns filed.

  • We can represent the agent as a tax payable person in case of FTA queries while auditing. But tax agents should know the Arabic language so that they can interact with FTA.

  • By hiring a tax agent we save tons of time because you don’t need to worry regarding the tax filing and return. A professional Tax Agent managing the part of taxation.

   

Certified Tax Agent 

Is not easy to become a tax agent in UAE by FTA? You have to pass so many exams and meet requirements.

Requirements to be a Tax Agent are following:-

  • FLuency in Arabic and English
  • The candidate should have a bachelor or master degree in accounting or tax or law
  • Should have 3 years of working experience in accounting or tax or law. 
  • Don’t have any criminal record.
  • The candidate should be physically fit.

If you are looking for the best tax agent in the UAE so, a Risians Accounting & Auditing Firm will be the best option for you. If you have any questions in your mind related to the tax, accounting, and tax agent so feel free to call us we will assist over the call that will be free. 

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Best Accounting Service In Dubai
Accounting 2021-02-24 From: Mr. Abbas

Before defining accounting services let’s take a look at accounting meaning.  Accounting or accountancy is the measurement and communication of business finance by collecting financial data from organizations and individuals. Let’s understand the meaning of the accounting service by taking an example. Suppose you have a manufacturing business of biscuits. The accountant must collect financial transaction data and record each transaction properly to provide the financial report and fill the tax. The Accounting financial report shows the insight of the business finance that is very helpful in making a decision.  Everyone knows an accountant must record the financial transaction, make financial reports, and filing taxes. But a good professional accountant provides you business growth strategy based on the financial report of a business and always keeps you updated about accounting and taxing news, laws, etc. so that you can stay one step ahead from your competitors. Always guide you way of generating more money because accounting or finance it’s about money. 

Main Types Of Accounting.

Public Accounting - Public Accounting means providing accounting services to other businesses. It offers  Expertise accounting and bookkeeping service, Auditing service, Tax filing and registration service, tax consultancy service, etc. as per the demand of their clients.

Government Accounting - Government accounting means take care of the government department accounts. Keep a tight control on the government revenue and expenditure. 

Management Accounting - It refers to the recording and analyzing the financial data of your company. To use in buying an asset, selecting budget, performance evaluation, and cost management.

Inter Audit - Interview refers to reviewing the business to detect the frauds, loopholes in business, fraud, risk area, compliance, etc. An internal audit is very important to run a business effectively and efficiently. 

Types of Accounting Service

Bookkeeping and accounting service - We provide on-time financial information to a client properly so that they can’t feel compromised.  In simple words, bookkeeping and accounting mean records of each transaction properly. we at Risians accounting provide a full range of accounting, includes:-

  1. Creating journal entries, leaders, and financial statements.
  2. Quarterly, half-yearly, and yearly bookkeeping service. 
  3. Set - up an accounting system for new business.
  4. Individuals accounting system.

Auditing Service -  Business auditing evaluates the overall business so that management can detect the weak point, errors and etc. before any harm and loss in business. The audit report ensures everything is going systematically and business is on track.


Tax Service - In TAx services the accountant fills the income tax and other tax that is applied to the business. It is the obligation of the accountant to claim the tax return and save a business to pay unnecessary taxes to the government.

ESR (Economic Substance Regulation)Service - In April 2019  UAE Government issued the ESR that introduced the requirement for UAE entities to maintain an adequate economic presence in the UAE. At risians, we provide all ESR related services.

  1. consulting on Economic Substance Regulation (ESR).
  2. Identify the qualifying entities for Economic Substance Regulation(ESR) compliance.
  3. Identify the qualifying business segments for Economic Substance Regulation(ESR) compliance.
  4. Report and advise on overall Economic Substance Regulation(ESR) readiness by the Entity.
  5. Ongoing Economic Substance Regulation(ESR) compliance.
  6. Secretarial services in connection with Economic Substance Regulation(ESR) record maintenance.
  7. Economic Substance Regulation(ESR) filing with the authorities in the proper /prescribed format.

 

Tax Consultation -  Tax consultant offers the strategy to pay less on the tax and keep save the business to pay more on taxes without any plenty and legal action by the tax government.

Financial Controller service - It involves many functions of the management such as Assign work to employees, deals with clients, Keeps a regular eye on the work, performance, etc. In a financial controller, the service may also conduct internal and external audits.

Bank Reconciliation -  It ensures the correct record of the transaction and accurate financial account.  It helps the business to pay less on the expenditures and projects.

Forensic Accounting Or Forensic Financial Service -  This service provider investigates fraud and the missing amount that appears in the financial report. Ensure the accuracy of the accounts. 

Payroll processing - Calculating the wages, managing the deduction and bonuses of the employees, and filling the payroll taxes. Provide accurate tax rates and regulatory information.

Accounting is mandatory for any kind of business. It doesn’t matter in which business you are in. Every business owner aims to earn more more money and save as much they can save on tax and business expenses. Get the best accounting service in Dubai. Accounting and finance is about money. A proper accounting system provides the full details about each income, expenditure, tax rates, and amount filing of tax in an accounting or financial report. With the help of these accounting reports business owners or accountants easily can detect the point from where we can save money on tax, expenditure and generate more revenue. Accounting keeps clear the figure of the business liabilities, shares, assets, cash in hand and etc so that we can make an effective strategy for business growth, new launch of a product, buy a new asset, etc. To keep business on track and keep control over the employees, the proper accounting system is essential. If you have any queries or need accounting consulting feel free to contact Risians Accounting.

 

 

 

 

 

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My experience in working with this team is very much a positive one. Their professionalism is refreshing. Thank you for making the process a very pleasant experience.

Ms. Arshameh Parmoun Tag Properties
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We have been working with RISIANS Chartered Accountants on a couple of assignments. At all times they are professional, organized with whatever assignments we have entrusted with them. Being a approved audit firm they are well aware with the regulations and compliances. I will recommend the team highly enough and shall certainly be engaging with them again and again in future assignments.

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I would overall rate team RISIANS work as exceptional. The team was successful in delivering quality audit, irrespective of the tight deadline and it was way better than the predecessor. We can definitely build more knowledge for future.

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