Accounting and Bookkeeping services
- Regular Reporting
- Maintaining statutory books of accounts
- VAT Accounting and Compliance
What is Accounting?
Accounting is the act of keeping, sorting, and recording financial transactions. With the introduction of VAT in the UAE, it is crucial now more than ever to have a reliable accounting and bookkeeping department that will help you keep your business and its finances in check. Maintaining the books in-house can be a laborious and costly affair, which explains why start-ups tend to ignore this requirement early on and only scramble to put their accounts together after raising funding or being acquired. However, maintaining books of accounts from the beginning would result in several benefits – first, it would relieve you and your employees significantly of the pains involved with complying with the IT Department’s requirements; provide a reliable source of data that promoters and shareholders can use to understand how the business is performing; lend to your credibility for loans in later years; and even satisfy investors.
10 Zone is home to highly skilled Professional Accountants who keep themselves well-informed about the latest financial affairs and have years of professional experience to back them up.
Here’s a quick glimpse of the services we offer:
- Accounting systems implementation
- Senior Accounting
- Finance Management
- Junior-level Accounts Management
- Executive Assistance
- Books Cleanup
- Monthly, Quarterly, and Year-End Reviews
- Financial Statements
- VAT accounting and reporting
In addition to the services mentioned above, we can also provide accounting entries and reports – ultimately ensuring your finances are well-monitored and orderly:
- Journal Entries Preparation
- Posting of Revenue/Sales
- Posting of Payments
- Petty Cash Accounting
- Posting of Material Received
- Payroll Accounting
- Fixed Assets, Depreciation
- Accounts Receivable
- Credit and Debit Adjustments
- Balance Sheet
- Cash Flow Statement
- Posting of Journal Entries
- Posting of Receipts
- Posting of Purchase Invoices
- Posting of Material Issued
- Projects Accounting
- Administration and General Expenses
- Bank Reconciliation
- Accounts Payable Reporting
- Trial Balance Reporting
- Profit and Loss Account
- Budget Forecasting
- Sales and Purchase Register
- Inventory Management and Control
- Debit/Credit Note Preparation and Posting
- Vendor Reconciliations
- Stock Checking
Accounting Services FAQs
Why are accounting & bookkeeping services critical for a business in the UAE?
Proper accounting and bookkeeping can help you get a holistic financial picture of your business. If you do not record all of your expenses, incomes, payments, and receipts as per the accounting principles, you may not be getting everything on the vital business numbers. If sales are not recorded on a timely basis, for example, then this can misrepresent your Accounts Receivables, which then affects your cash budgets.
In addition to this, the introduction of five per cent value-added tax (VAT) means that you need proper accounting records to prove your VAT-admissible transactions. It is very important for all businesses to have a formal accounting system that records all the related transactions. An improper VAT Accounting recorded can lose you your VAT claim, and you may even incur penalties and fines for incorrect reporting.
Do I need to outsource accounting?
Depending on where your business is right now, outsourcing your accounting could be a crucial step towards success. You can trust that your accounts are being handled by experienced professionals, saving time and money you would have otherwise spent on looking for candidates and hiring top talent.
What are the reports that I need to maintain?
You will need to maintain reports on revenue details, sorting them between how much is taxed the standard 5%, how much is Zero-Rated, and how much is exempted. You will also need to keep records of your sale expenses.
What accounting software do I use?
There are several affordable Business Intelligence software solutions available in the market. Our 10 Zone accountants use Zoho Books for accounting.
VAT Registration and Compliance
ü VAT Registration
ü VAT Accounting
ü VAT Reporting
VAT Registration is mandatory for all companies and individuals conducting business in the UAE with an annual turnover that is greater than AED 375,000. Businesses that have not reached this threshold but have an annual turnover greater than AED 187,500 can choose to voluntarily register for VAT, allowing them to reimburse input VAT. This registration can be more crucial for some businesses than for others, such as export entities.
While you can complete the registration process online at the Federal Tax Authority’s online portal, there are several important considerations you will need to make – whether you register as voluntary option or mandatory option, as a Tax Group or a Standalone, reimbursement of input VAT for export entities, and more. There are also several documents you will need to prepare and present alongside your online application, including:
- Documents identifying the authorized signatory e.g. passport copy, Emirates ID
- Trade license copy of the company
- Other official documents authorizing the entity/individual to conduct activities within the UAE e.g. Incorporation certificate, articles of association, power of attorney etc.
- Description of business activities
- Turnover within duration of last 12 months in AED
- Supporting document for 12-month sales
- Expected turnover in next 30 days
- Estimated value of imported goods from each GCC country (1 Year)
- Estimated value of exported goods to each GCC country (1 Year)
- Whether you expect to deal with GCC suppliers or customers
- Required documents for customs registration in each Emirate. (If applicable)
- Details of Bank Account
- VAT Registration
- VAT Accounting
- VAT Reporting
- Preparation for VAT audits
Do I need to mandatorily register for VAT?
Mandatory registration is only required if the taxable supply of the company exceeds AED375,000. Otherwise, you can choose to register voluntarily.
What kind of reports do I need to submit to the FTA?
- For registration, you need to give actual or estimated financial transaction values (revenue and expenses) (All figures in AED)
- For return filing, you will need to give the calculations of taxable supplies (Standard, Zero-Rated & exempt), and expenses against sales subject to VAT included.
What is VAT audit? How do I prepare for this?
The VAT audit is for closing the gap between the tax declared by the VAT dealer, and the tax that is legally due.
You will need proper maintenance of your books of accounts and records with supporting documents, as this confirms the vendor’s Tax Registration Number (TRN) before paying tax on invoice. You will also need an understanding of the procedures and the deadlines to ensure that the tax returns and other statutory filings are submitted on time by tax payers.
How do I claim VAT refunds?
The Federal Tax Authority (FTA) will first set-off the amount applied for refunding against any other Payable Tax or Administrative Penalties that is due from the Taxpayer, who has applied for the refund pursuant to the Tax Return or Tax Assessment issued by the FTA. Only then will the FTA refund any amount relating to a particular tax.
How will real estate be treated under VAT?
The VAT treatment on real estate will depend on whether it is a commercial or residential property. Supplies including sales or leases of commercial properties will be taxable at 5% VAT.
Residential properties will generally be exempt from VAT. This ensures that VAT would not constitute an irrecoverable cost to persons who buy their own properties. In order to ensure that real estate developers can recover VAT on construction of residential properties, the first supply of residential properties within 3 years from their completion will be zero-rated.
How will I reimburse bad debts on output VAT/paid on sales VAT for the manufacturer?
There is a process to reclaiming VAT on bad debts. You will need to submit some documents to the FTA. You can claim output VAT six months before revenue/sale.
How much time will it take for me to get my VAT refund?
Since your application still needs to undergo verification checks in order to avoid fraud, VAT refunds will take around 45 to 60 working days.
What are the penalties for not registering in VAT if your revenue exceeds the AED 375,000 limit?
The fine for not registering is AED20,000. If the taxpayer does not pay his dues, then after one month a daily penalty of one per cent will be implemented.
How can I amend my VAT registration form?
You can amend it on the FTA’s VAT registration website. Once you log in to your account, go to Edit your VAT Application and make the necessary changes.
How can I cancel my VAT registration?
You can cancel it online, on the FTA website. Starting from the first of February, you can de-register your application as well.
Will I still need to pay VAT if my services are exported from the UAE to GCC countries?
No, you do not need to pay VAT if your services are exported outside the UAE.
- Compensation structuring
- Maintaining statutory employee records
- Wage transfers and salary slips
- End-of-service benefits calculations
All employers are required to maintain records of their employees, including:
- Number of employed workers
- Amount paid
- Tax deductions on salaries
- Taxes paid to the government
- Number of leaves taken in a month
- Gratuity calculations
- Provisions for employee expenses and deductions
As well as other details relating to the structure of their salaries and employment agreements. Maintaining these records will require time and expertise, which may be difficult to acquire in small businesses as well as businesses that have just started out.
Nevertheless, you can’t compromise the quality of your payroll – it is essential from the moment you hire your first employee. 10 Zone’s payroll services offer clients a reliable and automated process that ensures your employee’s payroll records are centrally managed and accurate, as well as consistently up-to-date with employee compliance issues and labor laws.
Here’s what we bring to the table:
- Payroll processing in compliance with UAE Labor Law and Free Zone law
- Wages Protection System (WPS) setup and assistance.
- Payroll reporting
- Preparation of employee pay slips
- Leave balance tracking and statements
- Processing of bonuses, expense claims, and other payments
- Maintenance of payroll records
- Other payroll administrative services upon request
Is it mandatory to register for WPS?
The Wage Protection System (WPS) is made mandatory by the Ministry of Labor to ensure fair and timely wages to all employees. It requires every employer to choose any registered agent (banks, exchange houses and financial institutions) to join the WPS. The deadline for implementing the WPS depends on the size of the company.
I have a company in the free zone. Is it necessary to register for WPS?
Free zone companies are excluded from the WPS. However, some free zones do operate their own internal salary payment schemes.
What are the end of service benefits for employees in the free zones?
Under Article 132, an employee is entitled to an end-of-service gratuity only if he or she has completed at least one year of continuous employment. In this case, the employer is obliged to pay the equivalent of 21 days’ wages for each of the first five years of employment, and 30 days’ wages for each additional year, provided that the total amount is no more than two years’ wages. Gratuities are calculated from the basic wage, excluding all allowances. Most companies apply a minimum service length of 12 months. Benefits are usually payable as a lump sum and are funded locally (in 50 per cent of cases) or through an offshore vehicle.
In practice, employees in free zones, such as the Jebel Ali Free Zone and the Dubai Airport Free Zone, are subject to the corresponding rules and regulations. However, the Law will still apply and the provisions in the employment contract must be in accordance with the Law. Note: free zone employees are sponsored by the respective free zone and not their employer.
Since there is no real retirement system per se, the labor law states that an end of service benefit must be paid after a year of service.
Usually you are covered for being brought here and returning home, by means of an airline ticket. Apart from this, some companies provide monetary support for shipping of items, tickets for the families and few others. However, if you do not return home after you terminate your contract, then this is not applicable. Since gratuity is calculated on an annual basis or part thereof provided that the employee has actually completed one year of employment with the employer or more (Absence from work without pay are not included in the service duration calculations)
However, he will be entitled to end of service gratuity for fractions of a year he spent in service provided that he has completed at least one year in continuous employment.
All employers within the UAE is required by law to pay service-related severance gratuities to their employees, and the longer the employee has worked for a particular business the bigger the end of service gratuity payment will be.
Consequently, employers are seeking to establish structures that will assist them in meeting these end-of-service liabilities as they fall due. Because of the way in which international retirement benefits schemes legislation works, the Isle of Man is one jurisdiction that is able to give UAE employers the ability to fund for end of service benefits in a flexible, secure and tax neutral manner in a fully regulated environment
It is quite common for companies to have three or six-month probation periods written into employment contracts. Some companies may delay the residency process illegally until the probation period is up, which can make settling in difficult — no residency means then you cannot sponsor family members, buy a car or even get a bank loan.
You may also not be eligible for sick leave or annual leave during your probation period. Trade unions do not exist here. In case of a dispute between employer and employee, the Ministry of Labor and Social Affairs will initially act as an adjudicator, to resolve matters. If a party wishes to appeal a decision, the case can be taken to the court. Strikes and lock outs are forbidden.
How is overtime payment for the working week calculated?
The overtime is paid at normal remuneration plus an increase of at least 25% of the remuneration. If the employee works extra between 9.00 pm and 4.00 am, overtime is paid at normal remuneration plus an increase of at least 50% of the remuneration.
Is overtime pay applicable to managers and supervisors?
Overtime pay is not applicable to a small group of very senior employees holding responsible senior posts in management or supervision where those employees have the authority of employer over employees. By way of guidance, under Ministerial Resolution 7/1 of 1981, this is limited to the chair of the board of directors, general managers, departmental heads and those in a supervisory function provided that, in all cases, the employee has delegated authority to act on behalf of the company. These posts can be designated at the time of employment although regardless, the Labor Court will decide in the event of a dispute to determine whether an employee’s role falls within the overtime exemption.
How is annual leave salary calculated?
During annual leave an employee is entitled to their basic salary plus their housing allowance (if applicable). If circumstances necessitate that the employee works during part or all of their annual leave, then either:
- The period of leave can be carried forward to the next year; or
- The employer can pay the remuneration plus a leave allowance at a rate equal to the basic wage for every annual leave day worked.
Is the employee entitled to paid sick leave during the probation period?
How is End of Service Benefit calculated?
What deductions are allowed from an employee’s salary?
Employers are allowed to make deductions from the employee’s salary in the following cases:
- Recovery of advances or amounts of money paid to the employee in excess of their entitlement, provided that deduction is not more than 10% of the employee’s periodic pay;
- Installments payable by the employees from their remuneration. Eg: social security and insurance schemes.
- Employee’s contribution to a saving fund or repayment of loans for the same.
- Installments for a social scheme or other privileges or services provided by the employer and approved by the Labor Department
- Fines imposed upon the employee regarding any legal offenses
- Debts payable due to a court judgment, the deduction of which should be no more than one quarter of the employee’s pay.
In case of multiple debts or creditors, the maximum deduction is one half of the remuneration, and the sums of money shall be divided pro rata among beneficiaries after payment of any legal alimony amounting to quarter of the remuneration. A labor agent or supplier is prohibited from taking a commission or reward from an employee in return for arranging recruitment or as compensation for recruitment expenses (except as may be decided or approved by the Ministry of Labor and Social Affairs).
Employees and the employer shall interact directly and without any labor agent, whose task and relation with them shall cease to exist as soon as they are introduced to and employed by the employer. The employer is not permitted to reclaim any visa or related expenses from the employee.
How is maternity leave calculated?
The employee is eligible to a minimum entitlement is 45 calendar days at full pay, after at least one (1) continuous year of service, otherwise the entitlement is half pay for 45 calendar days. If the employee suffers a pregnancy related illness that is verified by medical certificate, they are eligible for up to a further 100 consecutive or non-consecutive days without pay.
Is a nursing mother entitled to additional leave?
Yes, for 18 months following the date of delivery, a nursing mother is entitled to two breaks of up to half an hour each per day, with no salary deduction.
Is any compensation payable regarding occupational injuries and diseases?
If an employee suffers permanent total disability or dies as a result of an occupational injury or disease, the employee (or members of the employee’s family), is/are entitled to compensation equal to their basic remuneration for 24 months, subject to a minimum of AED18,000 and a maximum of AED35,000. If the employee suffers permanent partial disability, they will be entitled to a percentage of such compensation depending on the nature of the disability (at the rates set out in the Schedule to the UAE Labor Law).
The employee (or the employee’s family) will not be entitled to any compensation if it is proven that the employee intentionally brought on the injury to commit suicide or for obtaining compensation or sick leave, if at the time the employee was under the influence of a narcotic drug or alcohol, or if the employee violated health and safety instructions, or if the injury resulted from the employee’s gross or negligent misconduct or the employee refused (without good reason) a medical examination or treatment in accordance with Article 148 of the UAE Labor Law.
Behind every successful business is an auditor that goes beyond managing the finances – auditors with a solid understanding of the industry, geography, politics, and economic policies that may affect the risks associated with any long-term strategies. Our auditing teams take all those factors into consideration in preparing their financial reports.
An external audit is an independent examination of the financial statements prepared by an organization.
Our standard financial report package includes the following:
- Balance sheet
- Income statement
- Statement of changes in equity
- Cash flow statement
- Summary of significant accounting policies
Our external auditors will support your business with:
- Independent review of financial statement
- Compliance with local and international law
- Updates on changes in accounting rules and regulations
- Solutions for business complexities and the application of international law
Internal auditing acts as your crucial line of defense against the risks associated with significant business change, unexpected control failures, tight regulations, and complex structures. Our auditors will examine business practices and associated risks and ensure that you get to plan ahead.
The services we offer include the following:
- Advising your management team so they can develop internal controls that enhance the control environment
- Advice on Implementing an effective and secured internal control environment
- Advice on core operational risk management, especially related to the reliability of business operations.
- Assistance in linking operational strategies and risk performance measures to business goals
- Assistance with change management and business awareness processes by helping the transition to existing practices become more efficient and focused
- Approaches through training and staff assistance in the development of new skills
- Evaluation of the key structures, dynamics, and processes required to highlight effective corporate governance.