Office 804, Park Lane Tower, Business  Bay Dubai, UAE

FAQ’s

FAQ'S

Q:  Do I Need An Accountant?

A: Every business owner needs someone they trust to help manage their finances. You may decide to hire an accountant, bookkeeper, or use accounting software to keep track of your income and expenses.

Q: Should I Outsource My Accounting And Bookkeeping?

A: It is always advisable to outsource your accounting as outsourcing saves you up to 90% cost compared to an in-house accountant. Even if you have your own accountant, getting 3rd Party accounting supervision helps

Q: What Is The Difference Between An Accountant And A Bookkeeper?

A: An accountant is someone who helps manage your finances. A bookkeeper is someone who keeps track of your income and expenses.

Q: Do I Need To Implement IFRS If My Business Is Not International?

A: With the introduction of Corporate Tax, you are required to prepare your accounting records as per IFRS and IAS. Also, IFRS may give you a competitive advantage if you are looking to expand internationally.

Q: What Are Some Common Challenges With IFRS Implementation?

A: Some common challenges with IFRS implementation include:

– figuring out which standards to apply

– training employees on the new standards

– converting financial data to the new standards

– dealing with different interpretations of the standards.

Q:  What Is The Current Market Scenario Of Accounting Software In UAE?

A: The current market scenario of accounting software in the UAE is highly competitive as various global businesses are competing to establish their brands. In such a scenario, it is very important for businesses to look for an efficient and reliable accounting solution that can help them stay ahead of the competition.

Q: What Are The Benefits Of Using Accounting Software In UAE?

A: The benefits of using accounting software in the UAE are many and varied. Firstly, it helps businesses to automate their financial processes and procedures, which leads to increased efficiency and accuracy. Secondly, it helps businesses to keep track of their finances and make better-informed decisions. Finally, it helps businesses to comply with the strict UAE laws and regulations.

Q: What Are The Main Features Of Accounting Software In UAE?

A: The main features of accounting software in UAE include but are not limited to, bookkeeping, invoicing, financial reporting, VAT compliance, and tax filing.

Q: How Can I Choose The Best Accounting Software For My Business In UAE?

A: When choosing the best accounting software for your business in UAE, you need to consider your specific business needs and requirements. You also need to consider the features offered by the software, its scalability, its price, and its customer support. Additionally, it is always advisable to consult with a team of financial consultants to get the best advice.

Q: What Is The goAML Portal?

A: The goAML portal is an online platform that helps businesses to comply with their AML/CFT obligations. The portal provides a range of online services, including registration, filing of Suspicious Transaction Reports (STRs), and submitting Customer Due Diligence (CDD) information.

Q: What Are The Documents Required For goAML Registration?

A: The following documents are required for goAML registration;

  • Valid and active email address for the Nominated Person.
  • An active mobile number (UAE or international number is accepted) for the Nominated Person.
  • All supporting documentation for the organization and the nominated person is prepared in a consolidated PDF file.
  • Authorization letter from the institution.
  • Information of the nominated person should be provided as Admin and user in the system.
  • Valid Passport Copy.
  • Valid Residency VISA Copy.
  • Valid Emirates ID.
  • Valid commercial trade license.

Q: What Is BestaxCA’s Role In AML Compliance In Dubai?

A: Our AML specialists uncover potential risks regarding geographical locations and extract valuable insights from them. Also, we closely monitor customers’ transactions and accounts for any doubtful activity that could indicate money laundering. This will help them to trigger money launderers, even if they are using multiple PINs or connections for financial terrorism.

Q: How Often Should I Train My Employees On AML Compliance?

A: Our AML training is customized according to your industry and helps you to remain on the safe side and save your business from any penalty. We recommend that you train your employees on AML compliance at least once a year.

Q: What Is The Difference Between An Audit And Assurance?

A: An audit is a comprehensive review of an organization’s financial statements, balance sheets, and audit reports to detect risks and assess the legitimacy of the business. Assurance is a legal confirmation from our side that the company’s financial records are accurate and as per UAE laws and accounting standards.

Q: What Is The Difference Between Internal And External Audits?

A: An internal audit is an evaluation of an organization’s internal controls to ensure that they are operating efficiently. The external audit is conducted by our team of independent auditors who examine the financial statements, balance sheets, and audit reports of the organization to detect risks.

Q: How Often Should I Get My Accounts Audited?

A: It is advisable to get your accounts audited on a yearly basis by our professional team of auditors to ensure compliance with UAE laws and prevent any penalties. However, an internal audit is recommended on a semi-annual or even quarterly basis.

Q: Does Auditing Help Stay Compliant With The VAT Perspective In UAE?

A: Yes, receiving a Pre-FTA Audit health check can point out non-compliance situations and adjustments may be made as needed. Although an incorrect VAT Return and its rectification might result in fines, correcting ahead of time avoids heavier penalties.

Q: What Is A Statutory Audit?

A: A statutory audit is a government-mandated examination of a firm’s annual financial statements. These statements are prepared by companies in order to provide insight into their financial performance. When making decisions, investors, shareholders, and other stakeholders rely on audited financial statements. Large and medium-sized enterprises are required to be audited under UAE law. Smaller firms may also be subjected to audits in member states.

Q: What Is The Outcome Of An Audit?

A: The publicly accessible audit report is the most important outcome of an audit. The accounting standards are stated in this section of the report, and it concludes whether the company’s financial statements are prepared in accordance with them and provide a fair representation of the company’s financial position and performance.

Q: What Is Company Liquidation?

A: Company liquidation is the process of bringing a business to an end. This can be done voluntarily by the directors or shareholders, or it can be ordered by the court. Once a company is in liquidation, its assets are sold off and the proceeds are used to pay off its debts. Any leftover money is then distributed to the shareholders.

Q: What Are The Different Types Of Company Liquidation?

A: There are two main types of company liquidation: compulsory and voluntary.

  • Compulsory liquidation is when the court orders a company to be wound up. This can happen if the company is unable to pay its debts, or if there is evidence of fraud or mismanagement.
  • Voluntary liquidation is when the directors or shareholders of a company decide to wind it up. This can be done for a number of reasons, such as retirement, financial difficulties, or simply because the business has come to an end.

Q: What Are The Consequences Of Liquidation?

A: Once a company is in liquidation, its assets are sold off and the proceeds are used to pay off its debts. Any leftover money is then distributed to the shareholders. The company itself will cease to exist, and its directors may be disqualified from running a company in the future.

Q:  What Documents Are Needed For Company Liquidation In Dubai?

A: It includes

  • Resolution of Shareholder for Company Liquidation
  • Appointment letter of liquidator
  • Liquidation Report
  • Copy of Emirates ID for all partners
  • A copy of the license
  • Power of Attorney (if any)
  • Passport copies of all shareholders.
  • Copy of MOA
  • Newspaper advertisement
  • Application form for deregistration

Q: What Are The Economic Substance Regulations?

A: The economic substance regulations are a set of UAE laws and regulations that require certain entities to demonstrate their economic substance in the UAE.

Q: Which Entities Are Subject To The Economic Substance Regulations?

A: The economic substance regulations apply to all UAE-based entities that carry out relevant activities. These include, but are not limited to, banks, insurance companies, investment funds, and holding companies.

Q: What Are The Consequences Of Not Complying With The Economic Substance Regulations?

A: The UAE has harsh penalties for businesses that do not follow economic substance rules. These fines range from AED 10,000 to AED 50,000. Companies that do not satisfy the criteria in the following year will be fined between AED 50,000 and 300,000.

Q: How Can I Ensure My Company Is Compliant With The Economic Substance Regulations?

A: The best way to ensure compliance with the economic substance regulations is to seek professional help. If you have any further questions about the economic substance regulations, please contact one of our experienced consultants.

Q: What Is Excise Tax In UAE?

The excise tax is a type of indirect tax that is levied on the consumption of specific goods that are harmful to the environment and human health. The aim of this tax is to reduce the consumption of these products and encourage people to lead healthier lifestyles.

Q: Which Products Are Subject To Excise Tax In UAE?

The products subject to excise tax in UAE are tobacco, energy drinks, and carbonated drinks.

Q: How Is Excise Tax Calculated In UAE?

The excise tax is calculated on the basis of the retail price of the product. The tax rate for tobacco products is 100% while the tax rate for carbonated drinks and energy drinks is 50%.

Q: When Is The Excise Tax Return Filing Deadline In UAE?

As a Taxable Person who is registered for Excise Tax, you must submit your Excise Tax Returns on a monthly basis. The deadline to submit your Excise Tax Reports is the 15th of each month.

Q: Who Is Required To File An Excise Tax Return In UAE?

All entities that are registered with the Federal Tax Authority and are liable to pay excise tax are required to file an excise tax return.

Q:  What Is In-Country Value?

A: The ICV is a program initiated by the Abu Dhabi National Oil Company (ADNOC) to evaluate the contribution of businesses to the UAE economy. The score reflects how much of a company’s value stays within the country.

Q: Who Needs An ICV Certificate?

A: Any supplier or manufacturer wishing to participate in an ADNOC tender must have an ICV certificate.

Q: How Long Is The ICV Certificate Valid For?

A: The ICV certificate is valid for 14 months from the date of issuance of the audited Financial Statements of the organisation. Recertification of the ICV certificate could be obtained from the same Certifying Body by using the same audited financial statements during ICV’s validity. Although, the in-country value certificate validity of 14 months will be the same.

Q: How Can I Improve My ICV Score?

A: The presentation of your commercial bids and ICV-related documents is the most impacting factor in ICV scoring. The authorities introduce an ICV improvement plan for businesses that want to obtain higher ICV scores than the previous financial year. Let us know how our team can assist you in the ICV certification process!

Q:  What Is The Abu Dhabi National Oil Company (ADNOC)?

A: The Abu Dhabi National Oil Company is the state-owned oil and gas company of the United Arab Emirates (UAE), headquartered in Abu Dhabi. ADNOC is one of the world’s leading oil and gas producers, and a major player in petrochemicals manufacturing.

Q: What Is UBO?

A: Ultimate Beneficial Owner or UBO is the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.

Q: What Are The Requirements For Declaring UBO In Dubai?

A: A UBO is defined in the resolution as someone who either directly or indirectly owns and manages a business. Individuals who own at least 25% of the equity and voting rights in a firm, or someone with direct authority to select and appoint a majority of its directors, are considered UBOS.

The UAE has put in place a number of measures to ensure that businesses are fully compliant with UBO regulations. These include:

  • Making it mandatory for businesses to declare their UBOs to the DED or other licensing authority
  • Publishing the names of UBOs on the DED or other licensing authority website
  • Requiring businesses to provide supporting documents for their UBO declarations
  • Carrying out spot checks and audits of businesses to ensure compliance

Q: What Are The Penalties For Non-Compliance?

A: Businesses that fail to comply with the UBO requirements will be subject to fines ranging up to Dh100,000, including suspension of trade licenses for a period between one month to 12 months.

Q: How Can Bestax CA Help Me With UBO Compliance?

A: Our team of experts can help you with all aspects of UBO compliance, from identifying your UBO to qualifying required documents and handling UBO declaration. We can also notify authorities on your behalf if necessary. Contact us today to learn more about our services.

On August 28, 2020, the UAE Cabinet passed Resolution 58, which replaced Resolution 34 on August 28th. This resolution aims to establish corporate transparency by regulating Ultimate Beneficial Owner Procedures. The resolution also contains recommendations on establishing a UBO for new companies and existing ones. The resolution covers all companies incorporated in the UAE mainland and free zones (with certain exceptions). This resolution emphasizes the need for establishing and maintaining an Ultimate Beneficial Ownership (UBO) register and supporting documentation. This register must be maintained at all times by businesses. They must also submit an update to the authorities and notify them of any changes in the register.

To minimize the possibilities of corporate monetary fraud, both state and federal governments made this announcement. Unregulated entities may engage in financial and economic crimes that pose a threat to a country’s business climate. A UBO eliminates this risk by forcing organizations and institutions to identify the party that will benefit from a legal entity’s activities.

All legal entities must quickly develop an understanding of all the requirements of resolution 58 and the filing processes, particularly because obtaining and maintaining a list of the beneficial owners has become a difficult duty. Let’s start by defining the phrase “ultimate beneficial owner.”

What is the meant by Ultimate Beneficial Owner?

A person or entity that has more than 25% of a firm’s shares and/or voting rights. It’s also the individual or entity that benefits from any corporate transactions. A company can have a direct or an indirect UBO. The Resolution (cabinet resolution 58) has made clear-cut application procedures that all relevant parties must adhere to.

UBO Identification

  1. The UBO is the individual who, directly or indirectly, owns and runs a firm, according to the resolution. A UBO is considered to be an individual who has the ability to dismiss and appoint a majority of a company’s directors. Individuals with control over at least 25% shares in a firm and the power to do so are called UBOS.
  2. If no natural individual fulfills the above criteria, the UBO should be someone who has control over a firm in some other manner.
  3. If no natural person can be found who satisfies the criteria outlined in points one through two, the UBO is deemed to be a person who has been designated to a higher management position within the firm.
  4. If the criteria for determining a UBO are met by more than one person (for example, 25% of voting rights are held by two people), all of them will be considered joint owners of the ratio.

Any sort of arrangement may be utilized to identify a firm’s UBO, according to the resolution. This implies that organizations may call on a variety of legal persons and/or third parties for assistance. A business must always keep an up-to-date record of the UBO’s information after it has been discovered.

Ultimate Beneficial Owner Vs Beneficial Owner

A Beneficial Owner is not the same as an UBO. People who are considered beneficial owners of a firm are referred to as shareholders. UBOs are people who control at least 25% of a firm’s equity. Furthermore, they have the power to influence a firm in a variety of ways, including through direct or indirect control. The UBOs have the ability to control the actions of entire organizations. It should go without saying that these people might have a lot of power.

Declaration

Now that we’ve covered what UBOs are and how Resolution 58’s rules the work, let’s look at what legal entities in the UAE need to do to comply with this legislation. The resolution has established a set of clear rules for companies to follow in order to report their UBO.

All corporations licensed in the UAE are required by the resolution to disclose their UBO. The following are the exceptions:

  • Licensed Free Zone’s legal entities(Dubai International Financial Center and Abu Dhabi Global Markets)
  • The Federal and Emirate governments own numerous corporations, which are referred to as legal entities

The resolution doesn’t require entities licensed by free zones to declare their UBO. However, many financial-free zones already have their own procedures for identifying and reporting UBOs. The basic conditions for qualifying as a UBO, as well as the reason for their identification, are identical to those in Resolution 58. However, each free zone has its own approach to this issue. For more information on how to make a UBO declaration in the free zones, contact your chosen free zone’s client service teams.

Legal Entity’s Responsibility

  • Companies must supply all required information exactly at the time of registration and licensing.
  • On all of their papers, companies should advertise their trade name and official address in the Emirates.
  • If there’s any question about who the real beneficiary is, the firm should notify all of its beneficial owners.
  • Companies must supply pertinent information about the UBO in the register once it has been identified and declared. The registrar must also ensure that the record is kept up to date. Any changes that a business is notified of should be changed in the register within 15 days after they were discovered.
  • Companies must submit all information about their UBO (and any other requirements of the resolution) within 60 days after cabinet resolution 58 is signed. To register and license a business, you must complete the process within 60 days of the company’s registration and license.
  • Provide details as directed by the registrar. The information must be provided to authorized personnel in the same manner.
  • The registrar must be notified of any changes made to the data supplied to the registrar within 15 days of making those modifications.

To comprehend the regulations and responsibilities of legal entities when it comes to UBO compliance, consider the Cabinet Resolution No. (58) of 2020, which regulates beneficial owner procedures.

If organizations don’t follow this rule, they will be penalized. The Ministry of Economy will take measures against them. Once these penalties have been imposed, the legal entity must submit an appeal, which will be handled before the sanctions may be discontinued.

Example

That person has the ultimate gain from a legal entity’s decisions, as we’ve shown. Let’s look at some UBO examples to help you understand the concept better.:

Example 1

ABC is an offshore firm with complete control over 123 FZ-LLC, a commercial entity located in the UAE’s free zone. Mr. A and Mr. C each own one share of ABC (50% each). The UBOs of the corporation are Mr. A and Mr. B, who are both shareholders. This does not, however, make them UBOs of ABC.

Example 2

Company XYZ is the parent company of five firms: A, B, C, D, E. Each of the five firms is controlled by a single person. John owns organization A, Adam owns organization B, Sam owns organization C, and Paul owns organization D and E. XYZ is owned by five firms, each of which owns half of the company. A, B, C, D, and E all represent 20% of XYZ’s total equity. Paul has a stake of 40 percent in XYZ since he owns companies D and E. This implies that Paul is the UBO of XYZ.

How to Prove the Ultimate Beneficial Owner?

The following approach should be used to determine and authenticate a company’s UBO:

  • To see whether a firm is legitimate and registered, get the credentials for the legal entity that it operates.
  • In order to figure out who owns a legal entity, collect data on the ownership chain of each individual who has direct or indirect control over the entity through shares or interests.
  • Examine the beneficiary owner’s share, percentage, and management control. This may assist you in identifying the people with the most authority over the firm.
  • Compare the ownership and control levels of each BO to the UBO identification conditions set out in resolution 58. The UBO will be the individual who satisfies the criteria.

Third-party assistance may make UBO verification more simple. Once a UBO has been discovered, a firm must gather the required information and compile the Register of Beneficial Ownership in order for it to be submitted to authorities.

Register

The procedure of identifying a UBO and then gathering information about them that is subsequently entered into the UBO register begins with a declaration. The following are required of legal persons under the resolution:

  • Register of Beneficial Owner
  • Nominee Board Member information
  • Register of Partners or Shareholders

The Register of Beneficial Owners will contain up-to-date information regarding a company’s prominent UBO. The following information from the UBO must be recorded in the register:

  • Full name, address, place of birth, and nationality of the applicant
  • Residential address to which notices shall be delivered
  • The number on your work identification card or passport, where you were born, issuing country, and issue date and expiration date
  • The date on which the individual became the company’s UBO, as well as the basis on which he was selected
  • The date on which the company’s UBO stopped being the individual

In Cabinet Resolution 58/2020, you may find out exactly what information you’ll need to create the preceding documentation.

It’s not easy to acquire information on your UBO and then compile documentation for submission. A third party, such as BestaxCA, can make a significant difference. The BestaxCA is a Consultancy Agency that specializes in assisting businesses with government compliance.BestaxCA can assist you with:

  • Analyzing your ownership chain and validating UBOs is the first step
  • Assist you in gathering data for your UBO, Nominee Directors/Managers, Partners/Shareholders records, and compiling them. They can ensure that your paper adheres to the resolution’s standards to the letter
  • Assist you in organizing the filing procedure with the authorities
  • Help you to organize your registers and ensure that all information in them is up to date

Certificate

A UBO Certificate is given to legal persons who comply with the resolution. This shows that the firm has confirmed its UBO and keeps an up-to-date register of its UBO information.

If a firm ever has to deal with law enforcement in connection with financial malintent, a UBO Certificate may be quite beneficial. The Certificate is given by the Licensing Authority, which is in charge of the registration of firms in a state.

How can BestAxca assist?

BestaxCA can assist organizations to adhere to the agreement because it has the necessary expertise and understanding. It’s a delicate issue to verify and declare your UBO. Your facts must be accurate and trustworthy.

  • Current Status Summary: We have the resources and knowledge to offer you the appropriate assistance. They will assist you in collecting and verifying all of the necessary information with your authorities.
  • Help in Registration: After collecting the necessary information, they may organize and compile it according to the regulations. They ensure that your registration form is free of mistakes and in accordance with the resolution.
  • Deliver Continuous Support: During the registration procedure, businesses usually need to submit additional information as needed. We can quickly and accurately generate any additional data you may desire.
  • Frequent Review: Any changes to the data submitted by entities in their registers must be reported to the authorities. We can keep track of all changes to your data and react immediately if a new update is required by the authorities. They can ensure that you notify the authorities within 15 days.
  • Deregistration: If your UBO changes, you must notify the proper authorities. We can assist you in this process, ensuring that you de-register in accordance with the law.
  • Confidentiality Of Personal Data: The data recorded in the registers is not made public to anyone. BestaxCA, as a professional and reputable organization, can guarantee that your data is kept secure (in accordance with Cabinet Resolution 58/2020’s Article (15) clauses 1-2).

Professional assistance from a third party may make the UBO registration process more manageable for your firm. It will also ensure that you fulfill all criteria on time and without problems.

Q: What Should I Do To Avoid VAT Penalties?

A: The best way to avoid any kind of VAT penalties is by taking the help of a professional Tax Consultant who can guide you about the legal requirements and documents needed for compliance.

Q: Do You Provide VAT Consultancy Services?

A: Yes, we provide VAT consultancy services to our clients to help them understand the requirements and procedures for VAT registration and compliance. Our team of experts also guides businesses about the documents needed for VAT registration.

Q: Can You Help Me With The VAT Registration Process?

A: Yes, we can help you with the VAT registration process. We will guide you about the documents needed for registration and will also assist you in filing the application.

Q: Do I Need To File A VAT Return?

A: If your business is registered for VAT, you will need to file a VAT return. The frequency of filing will depend on the turnover of business you have.

Q: What Are The Penalties For Late VAT Return Filing?

A: If you file your VAT return late, you may be subject to a late filing penalty. The amount of the penalty will depend on the number of days late and the value of the tax due.

Q: What Is The Difference Between Input Tax And Output Tax?

A: Input tax is the VAT you have paid on purchases made by your business. Output tax is the VAT you have charged on sales made by your business.

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