Aspects of the UAE corporation tax are discussed by experts

Questions are on the minds of businesspeople and professionals as the UAE prepares to implement corporate tax (CT) in the near future. On April 13 at India Club, an event co-hosted by IBPC, India Club, and Taxation Society drew more than 200 businesses, professionals, and other guests.

Naveen Sharma, director of cultural activities and chairman of the Taxation Society, emphasized that it is now imperative for businesses to assess the adequacy of their IT systems and books of accounts. The tax code is simple, but compliance and documentation are crucial.

During the panel discussion, which was conducted by Nimish Makvana, co-founder of the Taxation Society and senior partner at Crowe UAE, Dilip Jain discussed IAS 12 while Pavithra Balaji, Girish Chand, and Shailesh Kumar answered questions about taxes.

According to Girish Chand, the small business relief (SBR) program is a positive initiative that will enable the SME sector to enjoy lowered corporation tax compliance. To qualify for SBR, accurate bookkeeping is a crucial necessity. Prior to choosing SBR, entities must assess their financial situation in light of their projected profitability and leverage level.

All freezone businesses must register and submit CT returns, Pavithra Balaji retorted. The FTA has made it clear that freezone businesses will receive the same corporate tax treatment. Like Mainland enterprises, they must adhere with transfer pricing regulations and must maintain accurate accounting records. The tax relief offered allows freezone enterprises to benefit from a 0% tax rate on eligible income, provided that certain requirements are met.

According to Dilip Jain, in order to comply with the requirements of the corporate tax law, the companies will need to review their accounting system and make adjustments to the chart of accounts. Reports pertaining to company taxes should also be able to be produced by the accounting system. The needed guidance on the accounting treatment of current taxes and deferred taxes, as well as the related presentation and disclosures in the financial statements, is provided by international accounting standard (IAS) 12 - income taxes.