Things to remember for a first time audit in the UAE

Startup Audit in UAE

Getting Ready for First Time Audit in the UAE

Companies that successfully address audit issues, improve the quality of their financial reporting, and stand to gain even credibility internationally with leading sources of capital.

Given the importance of audit services, many senior executives and audit committees look to Alya Auditors for efficient procedures, the value of their work, and dynamics in their personal service.

Your organization stands to gain in multiple areas – reputation, insight, service, and cost – by finding experienced auditors who truly value your business.

We’ve been fortunate enough to work with companies of all sizes – from startups to big companies. By working with a variety of clientele, we’ve seen many different pitfalls that organizations are prone to, especially startups. As an organization committed to helping our clients get the most out of our thorough information security assurance services, we’ve put together a list of five ways startups can ensure a smoother audit. Let’s discuss.

Ensure the accounts are in order

Not every early-stage company has a full-fledged finance and/or accounting department. In fact, it is not unusual for emerging growth companies to operate on a cash basis for a period of time before hiring their first finance chief. That means it may be necessary to collect the relevant records and prepare them for the audit. It also means it is time to begin maintaining financial records in a way that eases the audit process going forward.

Engagement of professionals or employees

At its most basic level, an audit examines that financial statements are prepared in accordance with IFRS and free of material misstatement. As simple as that may seem, IFRS accounting rules can be highly nuanced, requiring significant technical knowledge and judgment. They are also continually updated, so current audit preparation and reporting experience are essential. In short, before starting an audit, see to it that at least one person on staff or working on the audit knows IFRS and how it applies to the company.

Make sure that you have gone through the entire process

A growing organization tends to be consumed with product development, sales, and customer support. Internal infrastructure may be important, but less of a priority. At the same time, employees can wear many hats. In finance, this might mean responsibility not only for financial reporting, but diverse other areas as well (think facilities, human resources, and office IT systems). Since an audit can take a nontrivial amount of time and effort, it is especially imperative in this environment to free the bandwidth to support it from beginning to end.

Make sure that you are aware of the indicators for first time audit

Three outcomes are desirable: First is a common up-front understanding of what the audit will entail, which can be achieved through a “whiteboarding,” or pre-audit planning, the process involving the audit team (internal) and the auditors (external). A second important outcome is meeting all deadlines and commitments as the audit process unfolds. The third outcome is a good working relationship between the audit team and auditors at the end of the process.

How can we help?

If your business in the UAE is looking to understand more about the taxes in the country and conduct a tax audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in the UAE which will assess the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

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VAT on Higher Education Sector in the UAE

VAT on Higher Education Sector in the UAE

VAT impact on educational institutions

Prescribed education supplies are traditionally exempt from VAT and this may be the case in the GCC although some countries could be contemplating the application of a zero-rate. The exemption means that no VAT will be charged on the provision of such supplies and VAT incurred in relation to making these supplies can not be reclaimed.
Prescribed education supplies may include course fees (including any administrative fees which directly relate to the course), course materials, field trips and excursions as well as food and accommodation to students. Educational institutions have evolved to provide more than just education to their students; they are now often involved in business activities such as the sale of goods from campus shops, restaurants,
vending machines, admission to plays, concerts, dances and museums etc. They may also provide short-term courses to non-students/the general public, all of which are likely to be subject to VAT. The likelihood in the GCC context is that educational institutions will make supplies that would be considered as exempt as well as supplies that are subject to VAT. This will mean that VAT incurred on inputs that are directly attributable to the exempt educational supplies will not be claimable. To further complicate matters, VAT incurred on common overheads (such as marketing and promotional costs, utilities, purchases of office furniture and goods) will not be fully claimable and must be apportioned, meaning that only a portion of VAT incurred on such expenses is claimable in proportion to the number of taxable supplies made over total supplies.
Historically, experience in other VAT jurisdictions shows that educational institutions tend to recover only 5-10% of all VAT incurred based on a standard method of apportionment (i.e. turnover basis). Thus costs are expected to significantly increase for educational institutions as a result of VAT. These costs will be further compounded by the higher compliance costs faced by educational institutions to ensure correct tracking and attribution of all their inputs and VAT claims. The additional irrecoverable VAT costs will impact the pricing policy. An early assessment of the VAT bottom-line cost is required in order to rebalance prices in time for 1 January 2018 in order to maintain current levels of profitability. Educational institutions may wish to consider developing a special method of apportionment based on a ‘fair and reasonable apportionment method which can lead to higher recovery rates and reduce VAT costs (compared to the standard method of apportionment.

VAT on Higher Education Sector in the UAE

Higher education institutions making zero-rated and standard-rated supplies are required to register for VAT if the value of their taxable supplies and imports exceeded in the last 12 months or is expected to exceed in the next 30 days the mandatory registration threshold of AED 375,000.

A higher education institution may voluntarily register for VAT if the value of its taxable supplies and imports or taxable expenses incurred exceeded in the last 12 months or is anticipated to exceed in the next 30 days the voluntary registration threshold of AED 187,500.
Where a higher education institution only makes zero-rated supplies (i.e. does not make any supplies that are subject to VAT at the rate of 5%), an exception from VAT registration may be applied for via the registration application.

Are tax invoices required to be issued?

Yes, tax invoices are required for all standard-rated and zero-rated supplies. Simplified tax invoices may be issued where the supply is made to an unregistered recipient or where the consideration for the supply made to a registered recipient is AED 10,000 or less. However, as an exception, there is no need to issue a tax invoice where the supply qualifies to be wholly zero-rated and there are sufficient records to establish the particulars of the supply.

Are institutions in the Higher Education Sector permitted to recover input VAT?

Yes, a higher education institution making only zero-rated and/or standard-rated supplies are eligible for a full
recovery of input VAT, with the exception of blocked items such as:
– Certain entertainment services; and
– Purchased, leased or rented motor vehicles that are available for personal use.
However, where the higher education institution also renders exempt transportation services, only a portion
of input VAT is recoverable.

How can we help?

If your business in the UAE is looking to understand more about the taxes in the country and conduct a tax audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in the UAE which will assess the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Download the details: here

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VAT on Education Supplies

VAT on Education Supplies

VAT on Education Supplies

The ‘Gulf Cooperation Council’ (GCC) states are gearing toward the introduction of a ‘Value Added Tax’ (VAT) in the region commencing on 1 January 2018. The proposed VAT will tax most goods and services with a limited number of specifically exempt or zero-rated supplies. VAT registered businesses that supply goods and services subject to VAT at a standard rate or zero-rate are usually entitled to claim a ‘credit’ for VAT paid on their business expenses (input VAT). However, in the case of a supply of exempt goods and services, no input tax credit will be available. Therefore the VAT cost will be borne by these businesses.

No. Certain supplies in this sector are zero-rated and some others are exempt.

a. Zero-rated supplies

The supply of educational services are zero-rated where both the curriculum and the educational
institutions are recognized by the competent federal or local government.
Where educational services are zero-rated, the provision of the following supplies by the same
the institution is also zero-rated:
– Supply of goods or services where the supply is directly related to the zero-rated
educational service; and
– Supply of printed or digital reading material which is related to the recognized curriculum

b. Exempt supplies

Services of transporting students from home to the location of the educational institution and vice
versa are exempt

c. Standard-rated supplies

VAT will be charged at the standard rate on the following (among others):
– Supplies made to persons who are not enrolled in the educational institution;
– Uniforms, electronic devices, food, and beverages;
– Field trips that are not directly related to the curriculum;
– Extracurricular activities provided for an additional charge;
– Supply of membership in a student organization; and
– Goods/services provided by a business that is not an educational institution.

How can we help?

If your business in the UAE is looking to understand more about the taxes in the country and conduct a tax audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in the UAE which will assess the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Download the details here

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Registration in anti-money laundering (AML) for Businesses in the UAE

Registration in anti-money laundering (AML) for Businesses in the UAE

Registration in anti-money laundering (AML) for Businesses in the UAE

The deadline for non-financial businesses is March 31; failure to register may result in closure.

The Ministry of Economy (MoE) has listed the businesses that need to register in the anti-money laundering systems before March 31.

Referred to as designated non-financial businesses and professions (DNFBPs), they have been asked to register in the Financial Intelligence Unit (goAML) and the Committee for Commodities Subject to Import and Export Control system (Automatic Reporting System for Sanctions Lists).

Such businesses were given an extended grace period till March 31 to register, in order to avoid penalties, which include licence cancellation and closure.

It is among the several measures adopted by the government to combat money laundering and financing of terrorism in the UAE.

The MoE also underlined the importance of adopting measures to counter money laundering. Failure to do so result in fines ranging from Dh50,000 to Dh1 million – which can be doubled to as much as Dh5 million.

The ministry explained that a wide range of non-financial business and activities are “most exposed to money laundering risks”. These have been divided into four main categories.

Brokers and real estate agents:

When entering into operations in the interest of their clients for purchase and sale of real estate.

Dealers of precious metals and gemstones:

When they perform any single-cash transaction or several seemingly related transactions with a value of Dh55,000 or more.

Independent auditors and accountants:

When they prepare, conduct or implement financial operations for the benefit of their clients, related to the following activities:

– Buying and selling real estate.

– Managing money that the client owns.

– Managing financial, savings or stock accounts.

– Contributing to establishing, operating or managing companies.

– Establishing, operating or managing companies, or legal arrangements.

– Buying and selling commercial entities.

Corporate service providers and trust funds:

When they undertake or execute an operation for the benefit of their clients or on their behalf in relation to the following activities:

– Work as an agent in establishing companies.

– Working or preparing someone else to work as a director or company secretary, or as a partner in the company.

– Providing a registered office, business address, place of residence, address for correspondence, administrative address of a legal person, or legal arrangement.

– Act as trustee for a direct trust fund or to perform a similar function for another form of legal arrangement.

– Working or preparing another person to act as a shareholder for another person.

Source : Khaleej Times

UBO Declaration for JAFZA Companies Due Dates

UBO Due dates- in JAFZA

Due Dates for Declaration of Ultimate Beneficiary Owners (UBO) in JAFZA Companies

Jafza is one of the most competitive locations to establish your business and see it grow. Benefits to businesses include a customised platform for global connectivity; connections with a network of business leaders with a history of success and an easy operating environment created around simplifying your operations, all within the dynamic Dubai market that supports enterprise development while offering one of the most desirable places to live.

Everything at Jafza has been designed with the unique needs of manufacturing and trading companies in mind. Come join our dynamic community of some of the most successful businesses in the world.

Jafza proudly stands as a dynamic base for thousands of businesses from over 100 countries, sustains more than 135,000 jobs, and attracts 23.9% of Dubai’s foreign direct investment.


A real beneficiary of an entity is someone:

a) who ultimately owns that entity through direct or indirect ownership of shares representing 25% or more interest in the capital of such an entity; or

b) who has voting control of 25% or more of the capital of such an entity by exercising control over such an entity (by for example, having a right to appoint or remove the majority of the entity’s directors/managers).

If it is not possible to identify the real beneficiary (i.e. a natural person) of an entity, then the natural person who exercises control over the entity shall be considered as the real beneficiary.

JAFZA UBO Compliance deadline

As per the Regulation, the details of Ultimate Beneficial Owner (UBO) are supposed to be filed by all the licensees (Legal Person) within 60 days of the promulgation of the decision i.e. by October 27, 2020. However, most of the Licensing Authorities have issued their own deadlines to be adhered to comply with Beneficial Owner Procedure Regulations.

In this regard, recently, JAFZA has extended the deadline up to 31st March 2021 for licensees registered with them.

How can we help?

If your business in the UAE is looking to understand more about the taxes in the country and conduct a tax audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in the UAE which will assess the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

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Services provided by artists, social media influencers subject to VAT in the UAE

Artists and VAT in the UAE

Services provided by artists, social media influencers subject to VAT in the UAE

The Federal Tax Authority (FTA) has clarified in a bulletin that services provided by artists and social media influencers (SMIs) for consideration are subject to Value Added Tax.

The bulletin outlines that VAT applies to such services provided by artists and social media influencers that include, but are not limited to, any online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or otherwise promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for consideration.

This announcement was shared in the latest Basic Tax Information Bulletin issued by the FTA on the tax treatment of services provided by artists and social media influencers.

The bulletin clarified that if an artist or influencer incurs any costs in providing service and subsequently recovers that cost from its client, such reimbursement falls within the scope of VAT in the UAE.

How can we help?

If your business in the UAE is looking to understand more about the taxes in the country and conduct a tax audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in the UAE which will assess the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Source : Khaleej Times

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