FINANCIAL POLICIES OF UAE 2021

March 3, 2021Dated:  | |

The United Arab Emirates is a country in Western Asia located at the eastern end of the Arabian Peninsula, with an estimated population of 9.89 million as per the official figures.

The country offers a strong businesses environment coupled with stable political and macroeconomic conditions. The economic might of the UAE can be judged from the fact it is ranked as the 26th best nation in the world for doing business by the Doing Business 2017 Report published by the World Bank Group. It may be interesting to note that of all the emirates the emirate of Dubai is amongst the most, if not the most, rapidly evolving cities in the world, which embraces knowledge, technology and innovation with open arms.

Discussed below are some of the key initiatives that are the key contributors in The UAE Financial Policies:

  1. ACCOUNTING AND FINANCIALS
  2. VAT COMPLIANCES
  3. UAE ECONOMIC SUBSTANCE REGULATIONS
  4. INTERNAL FINANCIAL REVIEW

ACCOUNTING AND FINANCIALS

It is very important that for the proper functioning and control of any business to maintain accounts. This will help in getting correct payment and receipt of cash and other entries made by the company. This makes it compulsory to maintain accounts of the company under the UAE Company and VAT Law. Accounting firms in Dubai like Flyingcolour, help you to maintain accounting and book keeping services. It is mandatory for all the companies to maintain their financial records for at least five years. It is for this very reason that most of the companies have outsourced their accounting services in Dubai.

FINANCIAL-POLICIES-OF-UAE-2021

VAT COMPLIANCES

VAT was implemented in the UAE on January 1, 2018. The regulatory Authority Federal Tax Authority Registration (FTA), made it mandatory for all the businesses in the UAE to record of their financial transactions. It also states that all businesses with annual revenue of Dh 375,000 or more to submit their VAT registration to FTA within the time frame specified in the law of being required to be registering. Once the business organization is registered with FTA they need to submit VAT returns either on a quarterly or monthly basis.  There are many companies like Flyingcolour which provide VAT consultancy and compliances services in Dubai.  

ECONOMIC SUBSTANCE REGULATIONS

Another compliance requirement for the companies to be registered in the UAE is Economic Substance Regulations (ESR). As per this the Entities will have to comply with Cabinet resolution 57/2020 & Ministerial Decision 100 for the year 2020 which gives directives for the implementation of the provisions of Cabinet Decision no. 57/2020.

Economic Substance Regulations (ESR) came into effect from 2019 and is applicable to all Licensee & Exempted Licensee carrying on the Relevant Activities in the UAE, including the Free Zone or Financial Free Zone.

It is the responsibility of the business to do assessment whether or not they carry out any relevant activity.

INTERNAL FINANCIAL REVIEW

It may be important to note that internal audit function established by the company should be transparent and responsible. The Internal Review should function in an independent manner, without intervention of the other existing business functions or departments. All these factors will go long way and help in fair assessment of internal control systems and procedures.

It is the responsibility of the internal auditor to review every aspect of the company from management’s ethics to effectiveness of strategies applied for operating activities in different departments. Many firms like Flyingcolour Accounting & Tax Consultants provide Internal Financial Review services in Dubai.   

If you have any query related to financial policies of UAE then feel free to call +971 4 4542366 today for a quality consultation or please send inquiry to info[at]flyingcolour[dot]com.

Please Note: This article was published on 03rd March, 2021. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.

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