In today’s scenario of globalization and technology convergence, the process of doing business has been redefined. Outsourcing various processes makes a lot of business sense. Most businesses and large companies are outsourcing their accounting processes for better management of their finances, and time etc.

These services are structured to suit an individual client’s needs and requirements. This service involves preparing and maintaining day to day bookkeeping and monthly or quarterly management accounts. These books are prepared as per the International accounting standards and can also be made as per specific client instructions.

The Ministry of Finance has announced the introduction of a 9% federal corporate tax in the UAE on business profits with a threshold of AED 375,000. This update will become effective from the financial year beginning 1st June 2023.

The corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally accepted accounting standards. There will be minimal exceptions and adjustments. This clearly means that financial statements must now be audited on time, without exception.

We shall keep a close watch on the details which are yet to be released. For now, it has been made clear that the UAE corporate tax regime shall follow best global practices and most likely to be implemented with ease in compliance requirements.

The extraction of natural resources, likely to remain subject to emirate-level corporate taxation, is to be the only business activity with tax exception, the announcement says. Exemptions, subject to some conditions, will also apply to entities operating in Free Zones.