As VAT is the major tax in the UAE, in this article, we’re going to understand what a tax invoice is, and how to prepare a UAE VAT invoice.

So let’s get started with what a tax invoice is in general.

What Is Tax Invoice?

A tax invoice is a fundamental piece of paper that pops up when you make a purchase, especially in a business context. It’s kind of like a supercharged receipt. Do you know how a regular receipt lists what you bought and what you paid?

Well, this invoice takes it a step further.

When a seller hands you such an invoice, it not only lists the items or services you purchased and their prices but also spells out the taxes involved.

This is a big deal because it helps the taxman keep an eye on things. The tax invoice shows how much tax you’ve paid, like sales tax or value-added tax, and it breaks down the costs. So, it’s not just proof of your shopping spree; it’s also proof that you’ve paid the required taxes.

Why Business Owners Need to Prepare a Tax Invoice (or What It Is Used For)

Business owners use tax or VAT invoices for several important reasons:

• Tax Compliance: To follow the tax rules and regulations set by the government. An invoice ensures they’re paying the right amount of tax.
• Expense Tracking: It helps track business expenses accurately. Business owners can see where their money is going and plan accordingly.
• Reimbursement: In case employees make business-related purchases, tax invoices are crucial for reimbursement and record-keeping.
• Legal Proof: It’s a legal document that can be used as proof in case of disputes or audits.
• Input Tax Credit: Business owners can claim a credit for the tax they’ve paid on their purchases when filing their taxes. This can reduce their overall tax liability.
• Financial Records: It contributes to maintaining organized financial records, vital for managing the business efficiently.
• Professionalism: Providing customer invoices shows professionalism and transparency, which can build trust and credibility.

In a nutshell, a tax or VAT invoice is the bridge between your shopping cart and the tax collector. It’s a key tool for businesses to keep their financial house in order and stay on the right side of the tax authorities.

UAE Tax Invoice Format & Checklist

UAE VAT or Tax Invoice Checklist

Businesses in the Emirates need to get their VAT invoices right. The Federal Tax Authority (FTA) has specific rules on how these invoices should look, and following them is a must. These rules are there to make sure that businesses accurately report their VAT dealings and pay the right amount of taxes.

Why is it so crucial?

Well, if you keep your VAT invoices in the correct format, you won’t have to worry about getting slapped with penalties and fines by the FTA. Plus, it makes your life easier because you can easily track your VAT transactions and calculate what you owe.

Alright, let’s dive into what a VAT invoice should look like for smaller transactions.

First things first, you want to make sure that “Tax invoice” is written clearly at the top. Then, include the supplier’s name, address, and tax registration number, which is often called TRN.

Don’t skip the invoice date, and be sure to describe the goods or services. Of course, show the total amount that needs to be paid, and don’t leave out the total VAT charge.

But if your business deals with larger transactions, your VAT invoice should include a bit more:

• Include the supplier’s name, address, and TRN.
• Also, include the recipient’s name, address, and TRN if they’re a registrant.
• Use a unique or sequential invoice number.
• Mention the date of the invoice and the date of supply if they’re different.
• Describe the goods or services.
• Show the unit price, quantity, or volume of what’s supplied, the tax rate, and the amount to be paid in AED (that’s the local currency).
• If you’re giving any discounts, state their value.
• Display the gross amount to be paid in AED.
• Don’t forget to show the tax amount you owe in AED.
• And if the reverse charge applies to your situation, make sure you mention that too.

Simplified Tax Invoice Format

Simplified Tax Invoice UAE

(source: Tally)

You can see that a Simplified Tax Invoice is a simpler version of a regular one. They both start with ‘Tax Invoice,’ but the big difference is that the simplified version doesn’t need the recipient’s details.

So, making a simplified version of this is easier than a regular tax or VAT invoice.

But for retail businesses and those selling things worth less than AED 10,000 to registered folks, it’s crucial to use Simplified Tax Invoices for taxable goods or services.

Just like a regular VAT invoice, these Simplified ones prove that taxable stuff was sold, and they’re used for tax returns and input tax credit claims.

If your business needs to use Simplified Tax Invoices, it’s a smart move to use VAT software.

It’ll do the hard work for you, creating these invoices automatically based on the transaction type, filling in the necessary details, and keeping them safe for future reference.

Tax Invoice Under VAT In Foreign Currencies

When dealing with tax invoices issued in foreign currencies, there are specific requirements you must follow:

• Tax Amount in AED: The tax amount you need to pay should be expressed in AED (United Arab Emirates Dirhams). This ensures uniformity and simplifies the tax calculation process.
• Exchange Rate: The exchange rate you should use for conversion must align with the rates published by the United Arab Emirates Central Bank on the date of the supply. This means that you need to stay up to date with these rates to ensure accurate invoicing.

Now, let’s delve deeper into the concept of rounding on tax or VAT invoices.

Estimation of Values in Tax Invoices:

When you need to issue a VAT invoice, and the calculated tax on a supply ends up as a fraction of a Fils, you have the option to round it to the nearest Fils. This rounding process is based on standard mathematical rounding principles, making it easier for both businesses and tax authorities to manage fractional amounts.

It’s essential to highlight that this rounding should be applied to each line item on a full tax invoice. This practice ensures that rounding is carried out consistently across all the products or services you’re invoicing for.

By doing this on a line-by-line basis, you maintain accuracy and transparency in your invoicing process.

In summary, ensuring that your invoices meet these requirements and follow proper rounding practices is crucial for tax compliance and clarity in financial transactions.

It’s a process that helps businesses and tax authorities alike in ensuring that tax calculations are accurate and transparent, even when dealing with foreign currencies and fractional amounts.

Conclusion

This article talks extensively, so it might not have all the answers for your unique situation. Whether you should follow the advice in this article depends on the specifics of your situation. We strongly suggest you reach out to a professional for guidance before you make any decisions based on what you read here.

It’s crucial to consult with an expert or leverage powerful accounting software that can offer tailored guidance to ensure your actions align with your unique circumstances.

ProfitBooks is just the right software for creating your tax invoice in the UAE or anywhere in the world, as it is a cloud accounting software. Get your 100% FREE account now, and start creating invoices for your small business!

Also Read:

VAT In UAE: A Comprehensive Guide

UAE VAT Return Filing – Comprehensive Guide

UAE Corporate Tax: What It Is & How It Works

How To Calculate UAE Corporate Tax?

The 11 Types Of Company Formations In The UAE | Dubai

The post Tax Invoice Under VAT In UAE appeared first on ProfitBooks.net.

If you’re a business owner in the UAE, it’s crucial to know how to calculate your UAE corporate tax to ensure you’re on the right side of the law and your finances are in order.

So, in today’s detailed guide, we’ll take you on a step-by-step journey through the UAE corporate tax calculation process, demystifying the complexities and making it a breeze for you to manage your tax obligations.

Let’s get started!

A Brief On What UAE Corporate Tax Is

Starting June 1, 2023, the UAE will introduce a 9% corporate tax for businesses with fiscal years beginning on or after that date, aligning with international tax standards to boost its global appeal. This new development requires businesses to quickly grasp the implications of UAE corporate tax.

Scope of UAE Corporate Tax

The UAE’s new national tax system applies to all businesses and commercial activities, with exceptions:

1. Resource extraction companies follow emirate-specific tax regulations.
2. Individuals with non-business income won’t be taxed, except for licensed business activities.
3. Businesses in Free Trade Zones can avoid this tax if they meet the specified criteria.

Foreign banks will transition to the UAE’s national tax law, necessitating adaptation to the new UAE corporate tax regulations.

UAE Corporate Tax Calculation

How Taxable Income Is Determined

In the CT regime, we start by using a business’s accounting net profit (or loss) as reported in its financial statements as the initial figure for calculating taxable income. We then make necessary adjustments to arrive at the final taxable income.

• For corporate tax in the UAE, the calculation is as follows:
• Corporate tax is assessed on a business’s annual taxable income.
• If the taxable income is AED 375,000 or less, the corporate tax rate is 0%.
• For taxable income exceeding AED 375,000, the UAE corporate tax rate is 9%.

It’s important to note that any foreign taxes paid can be subtracted from the profit reported in the financial statements.

Additionally, in the UAE, financial statements are typically prepared following the International Financial Reporting Standard (IFRS).

IFRS UAE Jurisdiction Homepage

Deductible Expenses

Entertainment Expenses – 50% Allowable

When it comes to expenses related to entertaining clients, shareholders, suppliers, and other business associates, like covering the costs of meals, accommodations, transportation, admission fees, and the use of facilities or equipment for entertainment, you’re allowed to deduct up to 50% of the total amount spent. This includes any other expenses specified by a decision from the Cabinet.

Interest Expenses – 30% of EBITDA Allowed

You can deduct net interest expenses (referred to as NIE) up to 30% of your EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). If, under the interest capping rules, there are interest expenses that you couldn’t deduct, you have the option to carry them forward and apply them as deductions in the ten subsequent tax periods.

In addition to the general interest limitation rule mentioned above, there will be no allowance for interest deductions if the loan was obtained, either directly or indirectly, from a related party for the following transactions with those related parties:

• Dividends or profit distribution.
• Redemption, repurchase, reduction, or return of share capital.
• Capital contributions.
• Acquiring ownership interest in a legal entity, who is or becomes a related party after the acquisition.

100% Non-Deductible Expenses

• Income that is exempt from taxation.
• Expenses of a capital nature. (Expenses that don’t fall under a capital nature and are incurred solely and exclusively for your business’s purposes are generally eligible for tax deductions).
• Fines and penalties, excluding compensation for damages due to a breach of contract.
• Dividends or profits distributed.
• Illicit payments, including bribes.
• Donations made (except when they are directed to a Qualified Public Benefit Entity).
• Recoverable input VAT.
• Non-business expenses, such as personal expenses.
• Any other expenses that may be specified by the Cabinet Minister.
• Taxes imposed outside the UAE.

In summary, this information outlines the deductibility and non-deductibility of various types of business expenditures, including entertainment and interest expenses, while highlighting specific categories of non-deductible expenses. Businesses must be aware of these rules and guidelines when managing their financial affairs.

Tax Losses Offset in the UAE Corporate Tax Context

In the UAE corporate tax landscape, businesses can set off tax losses against their taxable income for subsequent tax periods. However, there are some specific rules to bear in mind.

Utilization Limits: When calculating the taxable income for a particular period, businesses can offset their tax losses. However, this offset cannot exceed 75% of the taxable income for that particular period. If there’s still a portion of tax losses left, don’t worry – you can carry them forward indefinitely to offset against future taxable income.

Group Entities: The UAE Corporate Tax Law allows for the transfer of tax losses between entities within the same group, under certain conditions:

• There should be 75% or more common ownership.
• Other conditions include having the same financial year and using the same accounting standards, while not being classified as an exempt person or a qualifying free zone person.

Conditions for Carrying Forward Tax Losses: To carry forward and use tax losses, a Taxable Person must meet these conditions:

• The same shareholder(s) must hold at least 50% of the share capital from the beginning of the period in which a loss is incurred until the end of the period in which the loss is offset against taxable income.
• If there’s a change in ownership of more than 50%, you can still carry forward tax losses as long as the new owners are engaged in the same or similar business.

Exceptions: Keep in mind that tax loss relief is not available for the following losses:

1. Losses incurred before the effective date of Corporate Tax.
2. Losses incurred before a person becomes a taxpayer for Corporate Tax purposes.
3. Losses from activities or assets that generate income exempt from Corporate Tax.
4. Losses incurred by a Free Zone Person that is not attributable to a Permanent Establishment (PE) in the mainland.

Unrealized Gains or Losses

Unrealized gains or losses happen when the value of an asset or liability that a business holds changes, but no actual buying or selling transaction has occurred.

For instance, if a business owns a property that increases in value, but the property hasn’t been sold, the profit is considered unrealized. These gains or losses can be documented for accounting purposes, even though they haven’t been realized as actual cash or losses yet.

Now, let’s talk about how this relates to the CT Law (Corporate Tax Law). A business subject to CT Law can choose how they want to handle these unrealized gains and losses for tax purposes:

(a) Realization Basis for All: The first option is to recognize gains and losses only when they become real, meaning you wouldn’t pay taxes on unrealized gains, and you couldn’t deduct unrealized losses until you make a transaction.

(b) Realization Basis for Capital Assets: The second option is to use the realization basis, but only for assets and liabilities that are considered capital assets. This means that you’d defer taxation on unrealized gains and losses related to capital assets until they are realized.

It’s important to note that unrealized gains and losses from assets and liabilities classified as revenue accounts will still be included in your taxable income on a current basis. In other words, if these gains or losses are part of your day-to-day operations, they’ll be taxed as they happen.

Exempt Income

In the UAE, resident companies are liable for Corporate Tax (CT) on their global income, including capital gains. However, to prevent double taxation, certain types of income are exempt from CT under the following categories:

Participation Exemption

• If a UAE corporate shareholder owns a participating interest of at least 5% in a foreign entity, they won’t be subject to UAE corporate tax on dividends and other profits received from that entity.
• Various income types, such as foreign exchange gains, impairment, and capital gains and losses, received from either residents or non-residents will be exempt from UAE corporate tax if the participating interest criteria are met.

For a participation to qualify, the following conditions must be met:

(i) The ownership interest should be at least 5%;
(ii) The shareholder must hold the interest for a continuous 12 months (or intend to do so);
(iii) The participation must be subject to a tax rate in its home country of residence that’s no lower than 9%;
(iv) No more than 50% of the participation’s assets can consist of interests that wouldn’t qualify for a CT exemption if held directly by the taxable person;
(v) Any conditions specified by the Minister must be satisfied.

A participation is considered to meet the subject-to-tax requirement if:

• Its primary objective and activity involve acquiring and holding qualifying shares or interests;
• Most of the income during the relevant tax period comes from participating interests.

However, the participation exemption is not applicable for 2 years if the participation interest was acquired in a way that didn’t meet the participation interest conditions or was part of a group or restructuring relief.

Foreign Permanent Establishment Exemption

A resident entity might establish a permanent establishment (PE) in another country according to that country’s tax laws, and the income attributed to this foreign PE will be taxed in that country.

The UAE CT Law offers a choice to the resident entity to exempt this income in the UAE under the following options:

(a) Opt for an exemption of foreign branch profits.
To qualify for this exemption, the Foreign PE must be subject to UAE corporate tax or similar taxes at a rate not lower than 9% in the foreign jurisdiction. If this option is selected, the resident entity cannot consider losses, income, expenses, or foreign tax credits related to the Foreign PE in the UAE.

(b) Claim a foreign tax credit for taxes paid in the foreign branch country.
The maximum Foreign Tax Credit available is the lower of the foreign tax paid or the UAE corporate tax payable on the foreign-sourced income.

International Transportation Exemption
Income generated from leasing or operating aircraft or ships is not subject to UAE corporate tax as long as the following conditions are met:

• The income is earned by a non-resident.
• The leased aircraft, ship, or associated equipment is used for international transportation and there is a reciprocal arrangement with the foreign jurisdiction.

Group UAE Corporate Tax Benefits

Intra-Group Asset and Liability Transfers

In the realm of corporate taxation, the UAE Corporate Tax Law extends certain fiscal privileges for the exchange of assets or obligations between affiliated entities within what we call a “Qualifying Group.”

Now, let’s define a Qualifying Group: This category encompasses legal entities residing in the UAE or non-resident entities with a permanent presence in the UAE. To qualify, either one entity must own 75% or more of the other, or a third party should possess a 75% or higher stake in both entities.

Notably, neither entity can be an Exempt Person or a Qualifying Free Zone Person, and both entities must follow the same accounting standards and share the same fiscal year.

The core benefit here is that when assets or liabilities are transferred between two Taxable Persons within the same Qualifying Group, there will be no tax implications in terms of gains or losses.

However, it’s essential to be aware of a two-year clawback period if there’s a subsequent transfer outside the permitted group or if either the transferor or transferee ceases to be a member of the permitted group.

Business Restructuring Tax Relief

The UAE Corporate Tax Law also offers tax relief for situations involving business reorganization, such as mergers, spin-offs, or other corporate restructuring activities where a portion or the entirety of a business is transferred in exchange for shares or other ownership interests.

This benefit comes into play when certain criteria are met:

• The transfer must comply with UAE regulations.
• All involved Taxable Persons must be either Resident Persons or Non-Resident Persons with a Permanent Establishment in the UAE.
• None of the Persons can qualify as an Exempt Person or a Qualifying Free Zone Person.
• The entities must share the same fiscal year and adhere to identical accounting standards.
• The transfer must be justified by valid commercial or economic reasons.

In the case of transferring shares or ownership interests of UAE corporate tax, between two Taxable Persons during a business restructuring, there will be no taxable gains or losses stemming from this exchange. But, similar to intra-group transfers, a two-year clawback period is relevant.

If there’s a subsequent transfer to a third party or if the shares or ownership interests received are transferred or disposed of, any gains or losses from the initial transfer will be accounted for in the period when the subsequent transfer occurs to the third party.

Bonus: Small Business Relief For UAE Corporate Tax

Small Business Relief is a UAE corporate tax benefit available to individuals or businesses residing in the UAE, provided their revenue in the current tax period and previous ones fall below 3 million AED for each tax period.

However, Small Business Relief cannot be claimed by:

• Individuals or businesses operating in qualifying free zones.
• Companies that are part of multinational enterprise (MNE) groups with combined group revenues exceeding 3.15 billion AED.

If you’re eligible for Small Business Relief, you can carry forward UAE corporate tax losses and excess net interest expenditure to future tax periods where you do not choose to apply for this relief.

It’s important to note that anti-abuse provisions will be enforced if there’s an artificial separation of businesses to exploit the Small Business Relief, so be cautious about that.

Conclusion: An Accounting Software Makes This Easier

Tax management or accounting software is crucial, especially for businesses in the UAE.

This software is essential because it uses your declared net profit from financial statements to calculate corporate taxes. It’s the key to generating accurate financial and business reports.

Having precise financial statements is vital to paying the correct corporate tax. Errors in your business data or financial statements can result in overpaying taxes, hurting your business, or facing fines.

The best part?

You save time, effort, and money while staying compliant.

ProfitBooks – 100% FREE Accounting Software

ProfitBooks accounting software does exactly this, on the cloud, so your business can travel with you. Manage your UAE corporate tax or UAE VAT, using our easy-to-use software that enables you to be compliant.

The best part is that it is 100% free to use. So, get your FREE account now!

Also Read:

UAE Corporate Tax: What It Is & How It Works

VAT In UAE: A Comprehensive Guide

UAE VAT Return Filing – Comprehensive Guide

Top 5 Accounting Software In UAE (Pros & Cons)

The 11 Types Of Company Formations In The UAE | Dubai

The post How To Calculate UAE Corporate Tax? appeared first on ProfitBooks.net.

This decision is seen as a well-thought-out move aimed at broadening the UAE’s sources of income beyond its reliance on oil revenues, all the while ensuring its continued prominence as a major commercial hub in the region.

This article will dive into how UAE corporate tax was introduced, what are the rates, and how it operates within the country.

So let’s start with what corporate tax is in general, and then we’ll see how UAE corporate tax is defined.

What Is Corporate Tax?

Corporate tax is a type of tax that businesses, like companies and corporations, pay on their profits.

Just like how you pay income tax on the money you earn from your job, companies pay corporate tax on the money they make from their business activities.

This tax money helps the government fund important things like schools, hospitals, and infrastructure.

It’s an essential part of how countries manage their finances, and it ensures that even big companies contribute to the well-being of the society they operate in.

What Is UAE Corporate Tax & How’d It Start?

The folks in the UAE have some news to share. They’re starting corporate tax from June 1, 2023. What this means is that if you’re running a business, you’ll need to pay 9% of your profits in taxes, but only if your business year begins on or after that date.

This news has stirred up a lot of excitement among businesses and tax experts. With this move, the UAE is now the fourth country in the GCC (Gulf Cooperation Council) to have a national corporate tax.

The goal behind bringing in this federal corporate tax is to make the UAE an even stronger global hotspot for businesses and investments. It also helps the country meet international tax standards and prevents any tricky tax tricks.

Since this corporate tax is brand new in the UAE, businesses must wrap their heads around the concept.

The scope of UAE corporate tax

The UAE has brought in a new national tax system that applies to all businesses and commercial activities across its seven emirates. However, there are some exceptions:

1. Companies involved in getting stuff from the ground, like oil or minerals, will still follow the tax rules set by their specific emirate.
2. Regular folks making money in their capacity, like from their job or investments, won’t be taxed unless it’s a business activity that needs a license.
3. Businesses located in Free Trade Zones can avoid this new tax as long as they follow all the rules and don’t do business with the rest of the UAE.

Here’s the interesting part: Foreign banks used to follow their emirate’s bank tax rules, but now they’ll have to follow the UAE’s national tax law. How this change affects them and local banks will be explained later.

It’s a big deal because they’ll all need to adapt to these new UAE corporate tax rules.

Brief On UAE Corporate Tax Rates

The new tax rules in the UAE work like this: They have three different rates based on how much money a company makes.

1. If a company’s annual profits are less than AED 375,000, they don’t pay any tax.
2. If a company’s annual profits are more than AED 375,000, they pay a 9% tax on the extra money they make.
3. Big multinational companies, the ones covered by international tax rules called Pillar 2 of BEPS 2.0, pay taxes based on those global rules if they make more than AED 3.15 billion.

This tax is applied to the money a company makes after making some adjustments to its accounting profits.

Are there any exemptions?

In simple terms, some types of income won’t be taxed in the UAE. These include:

1. Money a UAE company makes from shares it owns in certain other companies (the specific rules will be in the law).
2. Profits from selling assets like property or investments.
3. Profits when companies within the same group reorganize.
4. Profits from transactions between companies in the same group.

Also, there won’t be a tax when you send money within the UAE or to other countries.

Because of these income exemptions, it’s expected that the law will have rules like those used in other countries. Businesses will need to check if they meet these rules to get the tax exemptions.

Wrapping Up: Common Questions Regarding UAE Corporate Tax

As the UAE corporate tax is newly introduced, many common questions are being asked by the UAE citizens and people conducting business in the country.

We’ve listed some of them for you below:

Q1. Who has to pay UAE corporate tax?

A1. If a company makes more than 375,000 AED in profit, it has to deal with corporate tax. They’ll have to give a portion of their profit as tax to the government.

Q2. What’s the UAE corporate tax rate?

A2. The corporate tax rate is 9% of the money businesses earn as profit. But here’s some good news for small businesses and start-ups: If your profit is less than 375,000 AED, you won’t have to pay any corporate tax at all. It’s like a special break to help out the little guys and those just getting started.

Q3. When can we get our hands on the corporate tax law from the government?

A3. They put out the corporate tax law on December 9, 2020. You can find the UAE corporate tax info on their official website under ‘Federal Decree-Law no. 47 of 2022. If you want to download it, just head over to the Ministry of Finance website.

Q4. What businesses or incomes are outside the scope of UAE corporate tax?

A4. If a business in the UAE makes more than 375,000 AED in profit, they have to pay corporate tax. But, there are some exceptions. Here’s a list of things and people that don’t have to pay corporate tax:

• If you’re an individual and your money comes from things like your job, real estate, or investments, you’re in the clear. It’s only business-related income that gets taxed.
• Foreign investors who aren’t running a business in the UAE don’t have to worry about corporate tax.
• If you’re a business in a free zone and you’re following all the rules, you might get some tax benefits.
• Any money a UAE business makes from selling shares or getting dividends from certain investments won’t be taxed.
• If you’re moving money around between different parts of the same company or doing a major business overhaul, you won’t be hit with corporate tax either.

Q5. How do you calculate UAE corporate tax?

A5. In the UAE, they figure out how much a company has to pay in corporate tax in a specific way. They take 9% of the profit that the company shows in its financial documents. But here’s the catch – they only start taxing when the profit goes beyond 375,000 AED. Anything less than that is tax-free.

So, let’s say a company makes 475,000 AED in profit. They’d only pay tax on the extra 100,000 AED (475,000 – 375,000). To calculate that tax, you’d multiply the extra profit (100,000 AED) by 9% (which is the tax rate), and that gives you 9,000 AED. So, in this example, they’d pay 9,000 AED in corporate tax.

It’s like you have to pay taxes on your income, but only on the part that’s above a certain amount. This system helps businesses and encourages them to grow while contributing to the country’s finances.

In the world of compliance, having good tax accounting software is essential for businesses. You need to choose software that will make the transition to the new VAT rules smooth, simplify your VAT accounting, and streamline the process of filing returns.

ProfitBooks is exactly the right tool for this. The best part? It’s a FREE-to-use accounting software with customer support that answers within the same business day!

Get your FREE account now!

Also Read:

VAT In UAE: A Comprehensive Guide

UAE VAT Return Filing – Comprehensive Guide

The 11 Types Of Company Formations In The UAE | Dubai

Top 5 Accounting Software In UAE (Pros & Cons)

The post UAE Corporate Tax: What It Is & How It Works appeared first on ProfitBooks.net.

This article is all about how to file returns for UAE VAT. The UAE government has special provisions, under which UAE VAT returns can be filed and businesses can save a lot of money.

So let’s get started with what UAE VAT is all about, and how to file returns for it.

What Is UAE VAT?

We have talked about UAE VAT in its entirety in our comprehensive guide on UAE VAT. It is recommended that you check our first if you’re unaware of the legalities surrounding UAE VAT.

Value Added Tax, often called VAT, is like an undercover tax that sneaks into most of the things you buy.

Here’s the lowdown on how VAT plays the money game.

You, the customer, ultimately foot the bill, but businesses play middlemen by collecting and sending that tax money to the government. So, businesses are like tax superheroes for the government.

These businesses not only pay what they collect but can sometimes get a tax refund from the government for what they pay to their suppliers. So, it’s all about the “value add” as it moves through the supply chain. To make it crystal clear, check out this simple example (assuming a 5% VAT in UAE rate):

What Is Value Added Tax (VAT) In The UAE?

(source: Ministry of Finance, UAE)

What Is VAT Return In UAE?

In simple terms, a tax return is like a report that lists all the stuff you bought and sold during a specific period for tax purposes.

It covers things like the stuff you imported, exported, or didn’t have to pay tax on, and it also shows how much tax you paid or collected on those transactions. To create this report, you use your invoices and send them through the FTA e-portal, which is like an online tax platform.

Now, if you’re a registered taxpayer in the UAE, you’ve got to make one of these tax reports for each tax period. That period could be a whole month or three months, depending on what the FTA says in your VAT certificate.

So, it’s a routine task for businesses in the UAE to keep track of their financial activities and report them to the tax authorities.

What Are The Filing Dates?

When it comes to submitting your VAT returns, whether you do it every month or every quarter, you’ve got to do it by the 28th day of the month after the end of that VAT period.

So, for example, if you’re dealing with a quarterly VAT return for February to April, you need to file it by May 28th.

One important thing to remember is that the first VAT period for a business in 2018 can differ depending on instructions from the tax authority. If your first period is from January 1st to January 31st, 2018, you should file your VAT return by February 28, 2018, or the next business day if February 28th is a weekend or a holiday.

In some cases, a business’s first VAT period can be longer than three months. For instance, if your first period is from January 1st to April 30th, 2018, you’d need to file your VAT return by May 28, 2018, or the next business day if May 28th is on a weekend or a holiday.

Detailed UAE VAT Return Filing Process

The VAT Return form you need to complete and submit is called ‘VAT 201.’ This form is split into 7 main sections, and here’s what they cover:

1. Your details as a taxpayer.
2. The specific period for your VAT Return.
3. How much VAT do you collect from sales and other sources?
4. How much VAT do you pay for expenses and other inputs?
5. The net amount of VAT you owe or are owed.
6. Any extra information you need to report?
7. Your declaration and authorized signature.

In each of these sections, there are various boxes where you’ll need to provide the necessary information to finish your VAT Tax return filing. We’ll go over each of these sections and what you need to fill in the relevant boxes of VAT Return Form 201 in the following discussion.

Step-by-Step UAE VAT Filing Procedure Using VAT Return Form 201

If you want to fill out your VAT Return Form 201, just hop onto the FTA e-Services portal with your username and password. Once you’re in, go to the Form Navigation menu, select ‘VAT,’ then click on ‘VAT 201 – VAT Return,’ and finally hit ‘VAT 201 – New VAT Return’ to start the process of filing your VAT return.

When you click on ‘VAT 201 – New VAT Return’ as you see in the picture above, different parts of the VAT return form will pop up. Now, let’s go through how to file your VAT Tax return step by step and talk about what details you need to provide in each of these sections.

Details of the taxable individual

In the section above, we’re going to grab some important info from taxpayers, like their “TRN” (Tax Registration Number), name, and address. It’ll fill in automatically.

If a tax agent is doing the VAT return for a taxpayer, we’ll also put in the agent’s “TAAN” (Tax Agent Approval Number), the related “TAN” (Tax Agency Number), and the names of the agent and their agency right at the top of the VAT Return form.

Understanding the Significance of Tax Year-End and UAE VAT Returns

The information in the previous section, including the VAT return period you’re currently reporting for, the end of the tax year, the reference number for your VAT return period, and the due date for your VAT return, will be automatically filled in for you.

The tax year end is important for businesses that can’t reclaim all of their input VAT and need to make an annual adjustment for their input tax. You can only make this adjustment in the first return after the tax year ends. The VAT return period reference number tells you which VAT return period falls within that tax year.

If your VAT return period reference is 1, businesses affected by this rule should include their input tax adjustment in that VAT return. But don’t stress about it right now, because this rule applies after the first year of VAT returns, starting from January 1, 2019.

VAT on sales in the UAE

In the part just mentioned, you should provide information about things like regular taxable stuff in the Emirates, tax-free stuff, things that don’t get taxed, and stuff where the tax is paid by the buyer.

It’s all about different types of supplies and their details.

What to Include in Your UAE VAT Report

UAE VAT on expenses and all other inputs

In this section, make sure to provide information about the stuff you bought or the money you spent, which had a 5% VAT, and the supplies which you pay the tax later. Also, include any recoverable tax that you can get back.

Understanding Your VAT Payment and Refund

In simpler terms, this section is all about your UAE VAT, the tax you pay on goods and services. Here’s the breakdown:

1. Box 12 – Total Due Tax: This shows the total VAT you need to pay for this tax return period. It’s based on what you’ve earned from sales and other outputs. So, it’s the sum of the VAT you’ve charged on your sales.
2. Box 13 – Total Recoverable Tax: This is the VAT you can get back. It’s based on what you’ve spent on expenses and other inputs. Think of it as the VAT you’ve paid on stuff you needed for your business.
3. Box 14 – Payable Tax: This is the key number. It’s the difference between what you owe (Box 12) and what you can get back (Box 13). If Box 12 is bigger, you owe that extra amount. If Box 13 is larger, you can either get a refund or use it in the next tax period.

So, in a nutshell, if you make more in VAT than you spend (Box 12 > Box 13), you pay the extra. But if you spend more (Box 12 < Box 13), you can either get a refund or save it for later.

Profit Margin Scheme Reporting for Eligible Businesses

Additional reporting requirements in UAE VAT

Only businesses that have used the Profit Margin Scheme during this time need to pay attention to this part. If you haven’t used it, simply check ‘No’ and move on to the next section. This is just an extra bit of info you’re sharing, and it won’t affect your VAT Return financially.

The final step towards filing UAE VAT returns

Declaration and authorized signatory

In the section above, make sure to enter the details of the person authorized to sign, and then check the box in the declaration section to send in your VAT Return. You also have the option to save your progress as a draft if you’re not ready to submit it right away.

But here’s the important part: Before you hit that submit button, be sure to double-check all the information.

Only when you’re 100% confident that everything is correct should you click the submit button. Once your VAT Return is successfully filed, you’ll get an email from FTA confirming that they’ve received it.

Note that you can file UAE VAT in its entirety by logging on to the EMARATAX portal and following the detailed instructions we have provided you. The process is pretty straightforward and does not require any accountant assistance.

EMARATAX portal login page

However, it is still recommended that you consult a professional before you take any steps towards finances, especially related to tax.

You should also refer to the official UAE VAT return filing guide by the UAE’s Federal Tax Authority, or even the UAE Government Portal’s detailed video guides will work wonders in clearing your doubts regarding UAE VAT return filing.

UAE Federal Tax Authority Infographic on VAT return-filing

Conclusion

When it comes to filing your UAE VAT returns, you need to provide a summary of your sales, purchases, output VAT, and input VAT.

This summary should follow the format set by the Federal Tax Authority (FTA). However, it’s not just about putting all your sales and expenses together. Some parts require you to give more detailed information, especially if you’re eligible to recover input VAT.

For instance, if you have standard-rated sales at the Emirates level, you should only report the expenses or purchases for which you can recover input VAT. Trying to collect and organize all this information manually can be tough, and it might cause you to miss deadlines, which leads to non-compliance.

That’s why businesses must use the right tax accounting software such as ProfitBooks. This software not only helps you keep track of your UAE VAT transactions but also makes it easy to create the correct UAE VAT Return in the required format.

With the right software, you can do this with minimal effort and avoid hefty penalties, which can range from AED 1,000 to 3,000 for not filing or filing incorrectly.

In the world of compliance, having good tax accounting software is essential for businesses. You need to choose software that will make the transition to the new VAT rules smooth, simplify your VAT accounting, and streamline the process of filing returns.

ProfitBooks is exactly the right tool for this. The best part? It’s a FREE-to-use accounting software with customer support that answers within the same business day!

Get your FREE account now!

Also Read:

VAT In UAE: A Comprehensive Guide

The 11 Types Of Company Formations In The UAE | Dubai

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You’ve landed in the right place, as VAT in UAE involves a learning curve to understand fully. This is a comprehensive blog on what VAT is and how it operates in the UAE. We also discuss VAT in UAE from a federal perspective and discuss the rates.

Overall, this guide covers the 5% VAT in UAE, introduced in January 2018, how it affects finances, and how it impacts individuals and small businesses.

But before we start reading up on the Valur Added Tax in the United Arab Emirates, let’s first understand how tax is treated here and the two types of taxes that the Emirates government collects.

What Is Tax In The UAE?

Taxation is the method governments use to generate funds for public services, including hospitals, schools, and defense.
There are two main tax types:

1. Direct Tax: The government collects it directly from individuals or businesses, such as income tax or corporate tax.
2. Indirect Tax: Collected by intermediaries (e.g., retail stores) on behalf of the government, with the end consumer ultimately paying it, as in the case of VAT or Sales Tax.

Now let’s quickly get into the depths of VAT in UAE.

What Is VAT In UAE & How Does It Work?

Value Added Tax, often called VAT, is like an undercover tax that sneaks into most of the things you buy. It’s kind of like a worldwide trend, with more than 150 countries jumping on the VAT bandwagon.

Places like the European Union, Canada, New Zealand, Australia, Singapore, and Malaysia all have their versions.

Now, here’s the lowdown on how VAT plays the money game. It’s like a relay race where the tax baton gets passed along.

You, the customer, ultimately foot the bill, but businesses play middlemen by collecting and sending that tax money to the government. So, businesses are like tax superheroes for the government.

These businesses not only pay what they collect but can sometimes get a tax refund from the government for what they pay to their suppliers. So, it’s all about the “value add” as it moves through the supply chain. To make it crystal clear, check out this simple example (assuming a 5% VAT in UAE rate):

What Is Value Added Tax (VAT) In The UAE?

(source: Ministry of Finance, UAE)

Why Was It Introduced In The United Arab Emirates?

The United Arab Emirates (UAE) introduced Value Added Tax (VAT) in 2018 to diversify its revenue sources and reduce its reliance on oil income.

Before VAT, the UAE heavily depended on oil for its income. When oil prices fluctuate, it could create financial rollercoasters for the country. So, they decided to follow the global trend of implementing VAT to smooth things out.

VAT in the UAE is a small tax on the value added to goods and services at each step of the supply chain. It’s like a teamwork tax where everyone chips in a bit. Businesses collect the VAT and pass it on to the government.

This new tax system helps the UAE fund public services like healthcare, education, and infrastructure. Plus, it’s a smart move to save for the future when oil might not be the golden goose it once was.

So, while VAT may have been a new concept for the UAE, it’s all about creating financial stability, supporting public services, and ensuring a prosperous future for the country. It’s like a financial makeover that’s here to stay.

How Is Value Added Tax Different From Sales Tax?

VAT vs Sales Tax

A sales tax is kinda like VAT, which is also a consumption tax. To most folks, they might seem pretty similar, but there are some key distinctions.

In a lot of places, sales taxes only apply to stuff you buy, and they only kick in at the final sale to you, the customer. That’s not the case with VAT—it covers both goods and services and gets tacked on at every step of the supply chain, even when you’re the one making the purchase.

VAT also applies to stuff brought in from abroad, leveling the playing field for local businesses.

For various reasons, many countries prefer VAT over sales taxes.

One big deal is that VAT is seen as a smarter way to tax because it gets businesses to help the government collect the cash and reduces sneaky reporting and tax dodging.

Registering For VAT In UAE

If your business in the UAE makes more than AED 375,000 from taxable sales or imports in a year, you must register for VAT. You can also choose to register if your sales, imports, or spending total more than AED 187,500.

To get your business registered for VAT, you’ll want to visit the FTA website and head over to the eServices section. But before you do that, make sure you’ve set up an account.

Different Types of VAT in UAE

In the UAE, there are different types of VAT based on what you’re selling or providing:

1. Standard-rated supplies: These include most goods and services, and they’re subject to a 5% VAT.
2. Zero-rated supplies: These are things like certain education and healthcare services, exports, precious metals (like gold and silver), and international transportation. They have a 0% VAT rate, and you can claim back input tax.
3. Exempt supplies: Some supplies are entirely exempt from VAT, such as residential properties, undeveloped lands, public transport, life insurance, and specific financial services. You can’t recover input tax for these.
4. Deemed supplies: These are a bit unique. They aren’t considered regular supplies, but businesses still need to charge VAT on them. This includes selling business assets for free, transferring assets between UAE and other GCC Implementing States, and using goods for non-business purposes while claiming input tax.
5. Out-of-scope supplies: The FTA doesn’t apply VAT to these supplies under the law.

VAT Rates In The Emirates

Let’s break down how taxes work simply when a mobile phone goes from the manufacturer to your hands. In the UAE, the government charges a 5% VAT on most stuff you buy.

So, first, the manufacturer makes the phone and sells it to a wholesaler. The wholesaler makes some money on top and sells it to a retailer. Then, the retailer also adds a profit and sells the phone to you, the end consumer.

Now, let’s use some numbers to get a clearer picture of how this all fits together.

In this case, you’re looking at a situation where VAT gets added at each step of the sale, and the seller who’s officially registered gets a tax credit or a refund for the VAT they paid when buying stuff.

Exemptions From Value Added Tax

VAT in UAE is exempted from certain sectors.

Most goods and services are subject to a 5% VAT rate, but there are exceptions where you either pay 0% tax or no VAT at all:

Zero VAT (0% VAT)

• Certain education and healthcare supplies.
• Things shipped outside the GCC.
• International transportation.
• Some high-quality precious metals, like super pure gold and silver.
• Brand-new residential properties sold within 3 years of being built.

When it comes to VAT-exempt items, there’s no VAT involved. These include residential properties, public transport, undeveloped land, life insurance, and certain financial services.

Penalties For Not Paying VAT In UAE

The FTA can slap taxpayers with penalties and fines if they break the VAT rules. Federal Law No. (7) of 2017 on Tax Procedures outlines the consequences of messing with UAE’s VAT law and trying to evade taxes.

Here’s a table that breaks down what kind of trouble you can get into and the penalties that come with it:

In conclusion, understanding the VAT offense penalties in the UAE is crucial for businesses. Adhering to tax regulations is essential to avoid potential financial repercussions.

Major VAT Insights For Businesses

We sourced UAE’s Ministry of Finance website and boiled down some information on VAT for UAE businesses. This information is detailed and is catered towards business owners in the UAE who would like to know the ins and outs of the VAT system in the country.

Registering as a business for VAT in UAE

If your business in the UAE is making taxable supplies and imports that go beyond AED 375,000, you’ve got to register for VAT. That’s mandatory.

But if your business doesn’t quite hit that limit, there’s still an option to voluntarily register for VAT. If your expenses add up to AED 187,500 or more, you can choose to register. This is handy for new startups with no sales yet.

VAT-Related tasks for businesses

All businesses here need to keep good financial records. Even if you don’t hit the registration thresholds, it’s a good idea to keep your financial records up to date, just in case.

Now, if your business is VAT-registered:

1. You’ve got to charge VAT on the stuff you sell.
2. You can get back the VAT you paid on business expenses.
3. Keep your business records in order because the government might want to check.

When you’re VAT-registered, you also have to report the VAT you’ve charged and paid to the government regularly. Usually, this happens online. If you’ve charged more VAT than you’ve paid, you pay the extra to the government. If you’ve paid more VAT than you’ve charged, you can get a refund.

VAT in the real estate industry

The rules for VAT in real estate depend on the type of property:

1. Commercial properties have a standard VAT rate of 5% when you buy, lease, or sell them.
2. Residential properties are generally VAT-exempt to make sure it’s not an extra cost for homebuyers. To help developers recover VAT on residential construction, the first sale within three years of completion is zero-rated at the time VAT starts.

The wrap-up on VAT in UAE

By reading till the end of this comprehensive guide, you must now have a pretty good idea of what VAT in UAE is and how it works, including the rates of VAT in UAE.

So, to wrap things up, navigating VAT in UAE might seem complex, but it’s all about ensuring a stable future for the country. Introducing the system of VAT in UAE aims to diversify its income sources beyond relying solely on oil.

Remember, even though VAT can appear challenging, it’s a step toward a brighter and more financially secure future for the UAE.

If you’re a UAE business looking to manage your VAT efficiently and with little to no accounting, ProfitBooks is the best solution for you!

ProftBooks’ cloud accounting software is easy-to-use and feature-packed. The best part is that it’s absolutely free to use.

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In this article, we will discuss all the 11 business structures and the three jurisdiction-based company formations in the UAE. We will also discuss the tax rates and how the companies can operate.

So let’s get started!

What Is A Company Formation?

Company formation refers to the process of legally creating a new company or business entity. It involves registering the company with the appropriate government authorities, defining its structure, and fulfilling any necessary legal requirements.

This typically includes choosing a business name, specifying the company’s purpose, outlining its ownership structure, and often filing important documents like articles of incorporation.

For example, let’s say you and a friend want to start a small tech company called “TechSavvy Innovations.” The process of company formation would involve selecting a suitable business structure, such as a limited liability company (LLC) or a corporation.

You’d then register the company with the relevant government agency, choose a unique name, outline how ownership and profits will be divided, and complete any required paperwork.

Once these steps are completed, “TechSavvy Innovations” will officially exist as a legal business entity, ready to conduct operations and transactions in compliance with the law.

Types of Business Licenses In UAE For Company Formations

In the UAE, they hand out different kinds of business licenses, which give you the green light to do specific types of business activities. There are four main types: professional, commercial, industrial, and tourism.

The professional license is for people like doctors, artists, or craftsmen offering their specialized services.

The commercial license is all about businesses that want to make money through trading and buying/selling stuff.

The industrial license is for companies that make things, like factories and manufacturers.

Lastly, the tourism license covers anything in the hospitality and tourism industry.

Which license you need depends on what your business does. So, it’s kind of like picking the right outfit for the occasion, but for your business!

Jurisdiction-Based Company Formations & Types In The UAE

In the UAE, you can set up a company in one of three areas: Mainland, Free Zone, or Offshore.

Each place has its authority responsible for giving you the necessary licenses. In the Mainland, it’s the Department of Economic Development in the specific emirate. In Free Zones, it’s the Free Zone Authority for that area. And for Offshore companies, it’s the Offshore Authority that handles the licenses. So, depending on where you want to start your business, you’ll deal with the appropriate authority to get the legal permissions you need.

Mainland Company

A mainland company in the UAE is an onshore business, and you get official permission to set it up from the Department of Economic Development (DED) in the specific emirate where you want to operate. The cool thing about mainland companies is that they can do business not only locally within the UAE but also internationally without any restrictions.

To decide if this is the right move for you as an entrepreneur, it’s important to understand what “Mainland” means according to DED.

Now, when it comes to mainland companies, there are various types of licenses you can get:

• Professional license
• Commercial license
• Industrial license
• Tourism license

What’s neat is that expats can own 100% of the shares in these companies. This is a recent change and a result of a new decree.

Here are some important things to know about mainland companies in the UAE:

1. They’re governed by Federal Law No. 2 of 2015, which became effective on July 1, 2015.
2. Expats can now fully own shares in commercial limited liability companies (LLCs) on the mainland.
3. GCC nationals can also own 100% of the shares in any company.
4. GCC companies or individual GCC nationals can partner with UAE nationals.
5. Some specific business activities require UAE nationals to own 100% of the shares, as per the law.
6. For certain professional activities, expats can own 100% of the shares, but they need UAE nationals as service agents.

In a nutshell, mainland companies are like the onshore version of businesses in the UAE.

Freezone Company

Starting a business in one of the UAE’s Free Trade Zones (FTZs) can be a great choice for foreign investors.

The UAE has more than 35 FTZs, with over 20 in Dubai. One of the main perks of setting up shop in a free zone is that you don’t need a UAE national to hold shares in your company. All UAE free zones offer some pretty cool benefits:

1. You can own your business 100% as a foreigner.
2. No taxes on imports or exports.
3. You can take all your profits home.
4. No pesky currency restrictions.
5. You get a 15-year break from corporate taxes, which can be extended for another 15 years.
6. No personal income taxes.

But, here’s the catch: Free Zone companies are usually limited to operating within the free zone and only doing the stuff allowed by their licenses. You also need to rent some office space in the Free Zone, either a small one for a few employees or a larger dedicated space.

And hey, you can get UAE residence visas for you, your company’s shareholders, and employees through the Free Zone where you’re registered.

Offshore Company

Setting up an offshore company in the UAE is a highly favored way to do business in the Middle East. The UAE provides three offshore options in Dubai; Jebel Ali Offshore Company, Ras Al Khaimah, and Ajman.

Each of these options offers similar services but caters to distinct strategic objectives for offshore company registration. The Jebel Ali Offshore Company is recognized as an International Business Crown and is the sole offshore entity permitted to own real estate in Dubai, operating within the JAFZA Free Zone.

On the other hand, the RAK Offshore and RAK International Company (RAKICC) are International Business Companies. They present a flexible and trustworthy choice for foreign investors looking to register an offshore company in the UAE without needing a physical presence. Notably, RAKICC is also allowed to own freehold property in Dubai.

Benefits of registering an offshore business:

• No Corporate tax
• Full foreign ownership
• Complete capital and profit repatriation
• Access to a UAE bank account
• International invoicing capabilities
• Limited liability structure
• Absence of TIEAs (Tax Information Exchange Agreements)
• Total privacy and confidentiality
• Ability to maintain multi-currency bank accounts in the UAE
• Availability of virtual office facilities in the UAE

The 11 Business Structures or Company Formations In UAE

In the UAE, all the technicalities are very similar to international trade, however, we do have to talk about the technicalities in the LLC, civil, and branch offices areas.

You will notice that five branch offices are mentioned here, which we’ll discuss in a later part of this section.

Read up on the basics of each type of company formation and then let’s get into the explanations of the three business structures I mentioned above.

1. Sole Proprietorship: A sole proprietorship in the UAE is a straightforward setup where a single individual owns and manages the entire business. It’s like a one-person show, and the owner assumes full responsibility for the business’s operations, profits, and liabilities. While it’s a simple way to start a business, it means that your assets are at risk if the business faces financial troubles.
2. Civil Company: A civil company is a specialized form of partnership in the UAE. It’s primarily meant for professionals, like lawyers, engineers, or consultants, who want to join forces and offer their services together. This structure adheres to regulations specific to these professions, ensuring that professional standards are maintained.
3. Limited Liability Company (LLC): An LLC in the UAE is a versatile choice for businesses. It’s a bit like having the best of both worlds. On one hand, it allows multiple owners to share in the business’s profits and management. On the other, it provides a critical benefit: limiting your liability. This means your assets are shielded from any financial issues the company might face.
4. Partnership: A partnership in the UAE is when two or more individuals or entities come together to run a business. They share the profits, losses, and responsibilities. It’s a cooperative approach that can be ideal for businesses where collaboration is key. The specific rules and regulations can vary, depending on the type of partnership you choose.
5. Private Share Holding Company: In this structure, a select group of people or entities can own shares in the company. It’s often used when you want to maintain a high level of control over who can invest in your business, keeping it relatively exclusive.
6. Public Share Holding Company: A public shareholding company is a big player in the business world. It’s a publicly traded company with shares listed on a stock exchange. This means that anyone can buy and sell shares of the company. It’s a significant step that often involves more regulatory requirements and public reporting.
7. Branch of Foreign Companies/Representative Office: Foreign companies can establish branches or representative offices in the UAE for various purposes, like market research or liaising with clients. They can’t usually engage in commercial activities directly from these branches but can explore business opportunities in the UAE market.
8. Branch of GCC Companies: Companies from other Gulf Cooperation Council (GCC) countries can set up branches in the UAE. This allows for seamless expansion within the GCC region. It’s an option for businesses looking to take their services or products across borders.
9. Branch of Free Zone Company: Free zone companies can spread their wings outside the free zone area by establishing branches within the broader UAE market. This offers the flexibility to tap into different markets while still enjoying the benefits and regulations of the free zone.
10. Branch of Dubai-Based Companies: Businesses based in Dubai can extend their reach by creating branches in other emirates of the UAE. It’s a strategic move to grow and serve a wider customer base while retaining a strong Dubai connection.
11. Branch of UAE-Based Companies: Companies operating within one emirate of the UAE can open branches in other emirates, becoming a larger, more geographically diverse organization. It’s a way to grow within the UAE’s national market while maintaining a unified legal structure.

What are the branch company formations?

A branch office in the UAE shares the same legal identity as its main company and operates using the parent company’s name. However, it can’t get involved in importing the parent company’s products, as that’s a job for local trade agents. Sometimes, foreign company branches need an extra license from the UAE Ministry of Economy.

On the flip side, a representative office has more limitations. It’s primarily here to promote the parent company’s activities by gathering information and seeking orders or projects to be handled by the parent company.

Both types of offices, whether it’s a branch or a representative office, must appoint a UAE national as a ‘service agent’ as part of the legal setup.

What are civil company formations?

A civil company is like a team-up for professionals such as doctors, lawyers, engineers, and accountants in the UAE. The professionals run the show, owning 100% of the company, except for engineering firms. Usually, you’d need a UAE National Local Service Agent in the mix. Surprisingly, even a foreign company can join the club, as long as they’re in the same line of work as the civil company. It’s all about professionals coming together, sharing ownership, and sometimes partnering with local expertise.

Technicalities of LLC company formations in the United Arab Emirates

A Limited Liability Company (LLC) is the go-to choice for setting up a business in the UAE, especially if you plan to do business within the country. It’s like the bread and butter of UAE business structures.

However, there’s a catch – you can’t have full foreign ownership. According to the UAE Commercial Companies Law, foreign investors can own up to 49% of the company, and at least 51% must belong to one or more UAE nationals.

Now, here’s the good news. You can form an LLC with as few as one shareholder (thanks to a 2015 law change), or up to a maximum of 50 shareholders.

The best part?

Your liability is limited to what you’ve invested in the company. And, you’re no longer tied to hefty minimum share capital requirements, which means you have more flexibility in deciding how much capital your LLC needs, allowing for a more tailored approach to your business.

Conclusion

In conclusion, navigating the company formations in the United Arab Emirates offers a range of possibilities and options. With a diverse array of business structures and company formations, entrepreneurs can tailor their endeavors to suit their unique goals and preferences.

The Emirates, with its Mainland, Free Zone, and Offshore opportunities, has positioned itself as a welcoming environment for both local and foreign investors.

The UAE’s dynamic business landscape is reflective of its commitment to welcoming entrepreneurs and fostering international trade. With updated laws and an ever-evolving economic environment, it presents an optimistic outlook for those looking to establish and grow their ventures in this vibrant and dynamic country.

Whatever may be your company type, you will need to manage finances efficiently if you’re looking to keep running your business. ProfitBooks is the best FREE solution to all accounting-related problems.

Manage taxes, invoices, books, and much more in any country and any currency using ProfitBooks.

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Quickbooks is a well-known software for accounting. Other software adheres to the needs of a particular business perfectly or is simply better. In this article, we will explore the Quickbooks alternatives in UAE and comment on their relevance to your business.

About Quickbooks

Quickbooks is not restricted to a particular range of business models or industries. It is utilized by every kind of company imaginable. They’ve done well by releasing several versions of their software to the demands of the industry.

The primary market for Quickbooks desktops is business and professional services. Professional service companies and independent freelancers are increasingly using Quickbooks online.

Contractors, manufacturers and distributors, lawyers, and even retail and restaurant enterprises are among the target markets for Quickbooks Enterprise. This means that QuickBooks appears to be effective and useful in nearly every industry.

Are Accounting Software Required For Businesses In The UAE?

Accounting software is of utmost importance in the UAE due to the stringent financial regulations that businesses must adhere to. These regulations necessitate thorough financial record-keeping, encompassing income, expenditures, and assets, with annual independent audits to ensure accuracy. Moreover, businesses are required to convene yearly meetings to review their financial standings.

Commencing in 2024, businesses may face profit taxes if they exceed specific income thresholds, with tax rates ranging from 0% to 9% depending on their earnings. Additionally, the UAE has implemented Value Added Tax (VAT) on various purchases since 2018.

Notably, the UAE government does not impose taxes on the profits shared among business owners. While there are no retirement benefits, health insurance coverage costing AED 1000 annually is mandatory for all UAE residents. Furthermore, customs duties are levied on certain imported goods.

Considering these stringent financial regulations, the use of robust accounting software becomes indispensable for UAE businesses. It ensures compliance with these rules and helps maintain financial accuracy. While Sage is a popular choice, it’s crucial to be aware of its limitations and explore alternative options like ProfitBooks, QuickBooks, and FreshBooks to ensure businesses can effectively manage their finances while staying compliant with UAE regulations.

Why Do We Need Quickbooks Alternatives In UAE?

What are the issues with Quickbooks? The downsides? What alternatives do we have? We’ll first list down the negatives for Quickbooks and then look at the Quickbooks alternatives in UAE.

Costly

QuickBooks offers three plans, ‘Simple Start’, ‘Essentials’, and the ‘Plus’ plan valued at $9/month, $13.50/month, and $19/month respectively. These are on the higher spectrum. The services vary significantly with a change in plan, making QuickBooks suitable only for large businesses and hence it becomes a negative considering the small and medium-sized businesses in the UAE.

Depleting Customer Service

Quickbooks answers queries and complaints only through mail which gets you a response in a day. That is a bit delayed compared to the standard practice in the industry. Many other software, for the sake of efficiency and gratitude to the clients, answer queries and complaints over phone calls, effectively providing immediate responses.

Improper Training

In comparison to Quickbooks alternatives, Quickbooks does not offer enough training for its software. It is a sizable piece of software with an array of features and options. It is going to be challenging for beginners in accounting to handle all financial matters alone using Quickbooks. Quickbooks alternatives in UAE should be looked for in this case.

Bugs

Numerous bugs have been found in Quickbooks, according to reports. The software occasionally lags as well. Probably as a result of subpar cloud services. This is a serious issue because it could delay crucial business transactions and result in unhappy clients.

Quickbooks Alternatives In The UAE

Let’s look at the choices that we have got for replacing Myob. We’ll look at their features and pricing, giving a general idea of what it will be like to use them.

1.ProfitBooks

4 Powerful QuickBooks Alternatives In The UAE: ProfitBooks Dashboard

ProfitBooks creates a pretty welcoming environment for businesses to thrive. What’s good about them is they’ve made it super user-friendly, so you don’t even need to hire an accountant. I mean, even if you’re clueless about accounting, you can handle it with ease.

Invoicing is good. They offer 25 invoices per month even on the FREE lifetime plan. The invoices are very professional yet simplistic to understand.

They’re not big on direct integrations with other platforms, but they’ve got a workaround using Excel to move data around if you ever need it. Profitbooks also has fantastic inventory management providing support for a well-maintained record of items. The inventory could also be secured by controlling its access.

One more thing that sets ProfitBooks apart is its simplicity. They don’t overwhelm you with super complicated reports. Instead, they keep it focused on what matters. It helps you concentrate on the essentials, which later leads to a more solid and non-negotiable analysis of crucial points, resulting in steady but significant growth.

They’re one of the very few accounting software providers worldwide that offer a lifetime FREE plan. It’s not some stripped-down version either; it’s quite valuable, especially for startups and small businesses. I’ve found it to be quite handy myself. It is probably the best QuickBooks alternative in the UAE.

PRICING:

They offer two plans; the full-time free plan labeled the ‘Startup’ plan and another plan called the ‘SMB’ plan worth $15/month. This is quite cheap compared to the counterparts with little to no compromise on services offered.

2. Xero

4 Powerful QuickBooks Alternatives In The UAE: Xero Dashboard

Xero has very good functionalities and it is confirmed by every decent source that I researched. It has a huge set of reports and analyses. Xero mingles well with other APIs and software. Large and medium-sized businesses could look forward to Xero as their accounting software.

Xero proves to be an upgrade on Quickbooks as an alternative but is still very pricey. Other QuickBooks alternatives mentioned in the article are not very expensive and offer enough services. Xero also seems to be an accountant’s software provided its complexity. It may lead to the necessity of an accountant.

Despite this Xero is recommended among the Quickbooks alternatives if you think your business needs a very robust and complexly functional software.

PRICING:

Xero currently offers four plans in the UAE. The starter plan at $29/month, the standard plan at $59/month, the premium 5 plan is $76/month, and the Ultimate 10 plan is $110/month.

3.FreshBooks

4 Powerful QuickBooks Alternatives In UAE: Freshbooks Dashboard

Over 24 million people use FreshBooks, a popular accounting program, across more than 160 countries. Both small and large businesses, as well as independent contractors, can use it. Invoicing, expense management, and time tracking are important features.

The platform provides easily navigable invoice templates that can be customized. However, the $15 to $50 monthly price range can be viewed as somewhat expensive. Although it offers seamless third-party app integration and support for international payments, some users complain that it lacks advanced accounting features.

There is no 24/7 hotline, but there is a Help Center, online chat, and phone support available at certain times.

Customizable invoices, expense management, project collaboration, custom estimates, accounting reports, mileage tracking, and multi-currency support are just a few of the accounting features available. It integrates with Gusto for payroll needs even though it doesn’t have internal payroll.

PRICING:

FreshBooks provides a range of pricing plans to suit various business needs. The “Lite” plan is available at USD 17.00 per month, offering essential features for invoicing. The “Plus” plan, priced at USD 30.00 per month, includes additional capabilities such as automatic expense tracking. For more advanced users, the “Premium” plan is offered at USD 55.00 per month, featuring enhanced customization. Additionally, FreshBooks offers a “Select” plan with personalized pricing.

4. Sage 

4 Powerful QuickBooks Alternatives In UAE: Sage Dashboard

Sage Accounting has its upsides and downsides. On the positive side, it offers useful financial reports like cash flow statements and balance sheets, helping businesses make smart decisions based on their financial performance. You can also organize and save these reports in different formats. However, when it comes to integrating with other software, Sage’s options are a bit limited, mainly because many integrations are with other Sage products. Pricing is decent in the UAE, but the basic ‘Start’ plan lacks some essential features like bank reconciliation.

One drawback is that Sage can be a bit tricky to use, especially compared to simpler options like ProfitBooks. Customer support is primarily through email, which can be slower than phone support. Sage also has some restrictions, like limited payroll features and extra charges for more users, which might not be great for small businesses. There have also been reports of software glitches.

So, while Sage has its strengths, its usability and limitations are things to consider carefully before choosing it for your accounting needs.

PRICING:

Cost-to-service ratio becomes a critical factor for any business and hence, how pricing affects features offered becomes an important part of our Sage review. Sage offers two plans in the UAE. The ‘Start’ plan is at USD 11/month and the ‘Standard’ plan is at USD 11/month.

How To Choose The Best Suitable Software For Your Accounting Needs?

Choosing the right accounting software for your company is a big decision. First things first, you’ve got to pick between desktop-based or cloud-based software. Cloud-based software is quite popular because it can sync your data, back it up automatically, and you can access it from anywhere with an internet connection. But if you’re in a place with shaky internet or need to do stuff in person super quickly, the offline option might be better.

Now, let’s talk security. Your data’s safety is a big deal. Make sure the software uses something called HTTPS for secure data transfer. And if they’re partnering with reliable cloud hosting companies like Amazon or Rackspace, that’s a good sign.

Next, figure out what you need the software to do. Do you need it for things like making invoices, tracking expenses, managing your inventory, or reconciling your bank statements? That’s important to know.

Think about the future, too. You want software that can grow with your business.

Also, make sure you can easily take your data with you if you ever decide to switch software. Watch out for any hidden fees, like extra charges for transactions or integration. And be clear on what the free trial version lets you do.

Don’t forget about support! It’s super important. Check if they have different ways to get help, respond quickly, have good knowledge, offer resources, and update the software.

Do not hesitate to change the software you are using if you find that it is not enough for your business. Look for alternatives as we did with this article accessing Quickbooks alternatives in UAE.

In the end, when you’re picking your accounting software, just remember these things and match them up with what your company needs and wants. One option to consider is ProfitBooks. It’s great for small and medium-sized businesses, with user-friendly features, room to grow, a reasonable price, excellent support, and clear expenses.

Conclusion

In conclusion, there are a number of important factors to take into account when selecting the best accounting software for your company in the UAE. With the benefits of cloud-based software, such as data synchronization and accessibility from anywhere, in mind, first decide whether a desktop-based or cloud-based solution is more appropriate.

Security must always come first, so check that the application partners with trustworthy cloud hosting providers and uses secure data transfer protocols like HTTPS.

Decide what accounting requirements you have, such as invoicing, expense tracking, inventory control, or bank statement reconciliation. Choose software that can meet your needs now and grow with your company in the future.

To prevent any unexpected costs, look out for any hidden fees and comprehend what the free trial version provides. Excellent customer service is crucial because it guarantees that you can get assistance when you need it and that the software is supported and updated.

Finally, if your current software is not meeting the changing needs of your company, be willing to switch. Alternatives like ProfitBooks, a user-friendly, affordable, and feature-rich option for small and medium-sized businesses in the UAE, should be taken into consideration.

In order to ensure smooth financial operations in compliance with UAE regulations, the ideal accounting software should be in line with your company’s present and future needs, offer strong security, and offer excellent customer support.

The post 4 Powerful QuickBooks Alternatives In The UAE appeared first on ProfitBooks.net.

Handling accounts after the birth of VAT has been a difficult task for businesses in the UAE.

What is the solution then? An accounting software.

Accounting software manages all of your needs in one place over a remote or cloud environment. They are easy to operate, always available, and generally procurable. This is why having software that is specifically designed to meet your demands is crucial.

SAGE has been known to have wonderful software used by various businesses in the UAE. Certain features of it though leave the customers disappointed. We’ll study all these factors effectively, explore SAGE alternatives in UAE, and try to understand what factors go into choosing software.

I have brought you this article which covers all the alternatives to SAGE specifically and features of accounting software generally.

Why Is Accounting Software A Necessity?

• Accounting software along with giving valuable insights also helps in the day-to-day tasks of your business. Here are a few significant benefits listed for you to examine:

• Saves your Money: Employing many accountants may not always be necessary for firms. These responsibilities can be successfully handled by accounting software, earning your trust.

• Helps your business grow: For smaller and medium-sized firms with few resources, accounting can be rather intimidating. You free up additional resources to support the expansion of your organization by using software to perform these duties.

• Insights into the numbers: Accounting software provides in-depth studies and reports on your company, including topics like payroll, inventory control, and unpaid invoices.

• Interstate Transaction Management: Most businesses in the UAE are required to have monetary transactions across borders. Most accounting software in the UAE offers support for such facility and hence the conversion from the UAE Dirham to other currencies becomes easy.

• Helps in Taxes: The introduction of VAT in the UAE in 2018 has been challenging for businesses to keep up with. Accounting statements need to be balanced perfectly. This might turn out to be difficult, especially for small and new businesses in the UAE.

• Data Privacy and Security: By using accounting software, you also put money into strong data security procedures. It guarantees that your financial data is protected from prying eyes and any breaches, providing you peace of mind and preserving the integrity of your company.

In essence, adopting accounting software can result in more productive operations, open the door for company growth, and offer priceless assistance in managing your money, and taxes, and protecting your sensitive data.

WHAT ARE THE ACCOUNTING REQUIREMENTS IN UAE?

In this article exploring Sage alternatives in the UAE, it is critical that we first understand the laws of the state of the UAE. Let us do that in this section before we move further listing Sage alternatives.

In the UAE, all companies have specific obligations:

• Accounting: Firms must maintain annual financial records following IFRS standards, including balance sheets, income statements, wage and asset records, and inventory statements.

• Annual Audit: An annual audit of accounts is mandatory to ensure accuracy, with the auditor’s report due within three months after the fiscal year-end.

• General Assembly: Every UAE company must hold an annual general meeting within four months of fiscal year-end, where financial reports and auditor’s findings are presented.

• Corporate Tax: Starting in 2023, a 9% tax applies to profits exceeding AED 375,000 for both Mainland and certain Free Zone companies with Mainland activity.

• VAT Registration: Mandatory VAT registration based on turnover.

• UBO Registry: Since 2021, companies must maintain a Register of Ultimate Beneficiaries internally (Mainland) or at the Registry (Free Zone).

• ESR Compliance: Economic Substance Regulation requires notifications and annual reports to the Registry.

The Value Added Tax, or VAT, has been in place with rates set at 0% and 5% since January 1, 2018. Second, in 2024, corporate tax—also referred to as profit tax—will be implemented, with rates of 0% and 9% being applied on yearly profits surpassing AED 375,000. Notably, neither domestically nor internationally in the UAE, there is no withholding tax on distributed profits. Additionally, social security fees are not levied in the UAE. However, there are no pension contributions or entitlements, and all inhabitants must now obtain local health insurance, which costs AED 1000 annually. Finally, there is a general rate for customs duties on imported items.

This then Makes it very evident that accounting software becomes necessary to manage your accounts in the UAE. Let us then understand the flaws in Sage and look for Sage alternatives.

WHERE DOES SAGE LACK?

There are a few points where Sage lacks. Once we understand these points, we’ll also understand which SAGE alternatives would suit what business.

DIFFICULT TO USE

Sage does not provide enough training for its software especially compared to its alternatives in the UAE like ProfitBooks. Hence, Sage is on the difficult side to navigate through and get to the required with minimal operations.

DEPLETING CUSTOMER SERVICE

Sage answers queries and complaints only through emails which gets you a response in a day. That is a bit delayed compared to the standard practice in the industry. Many other software, for the sake of efficiency and gratitude to the clients, answer queries and complaints over phone calls, effectively providing immediate responses.

LIMITED FACILITIES PROVIDED

SAGE faces some limitations in its services. The most significant one is in the area of payroll. The cheapest does not provide payroll support even for limited employees. Beyond that, SAGE charges a fee for each additional employee. You have also to pay for an extra user in the pricier plan.

The starter plan, often preferred by small businesses and startups, has limitations when it comes to the number of invoices and bills you can manage. Additionally, there have been recent reports of software bugs cropping up, which can be a concern.

What Are The Pros And Cons To Using Sage?

Pros

• Fair Cost
• A Mobile application available
• Supports multiple currencies

Cons

• Unsatisfactory Integrations
• The basic plan does not offer enough services
• Reports could be better

WHAT ARE THE SAGE ALTERNATIVES?

Let’s look at the choices that we have got for replacing Sage. We’ll look at their features and pricing, giving a general idea of what it will be like to use them.

1.QuickBooks

4 Trustworthy Sage Alternatives In The UAE: QuickBooks Dashboard

In the UAE bookkeeping community, QuickBooks is an acknowledged name that has been around for a while. It has the feature of being cloud-based, allowing you to work with it from almost anywhere. Numerous features are available, including managing payroll, and numerous user accounts (although this varies depending on the plan). Since they don’t offer much training, some people may find QuickBooks to be a little too comprehensive and a bit difficult to navigate.

On the plus side, adopting QuickBooks has a few genuine benefits. It generates some reliable, comprehensive reports and gets along well with banks and other apps.

Additionally, you have phone support for assistance needed. However, I’ve known a few user reports of bugs, which can be somewhat alarming. Overall, though, it appears that QuickBooks meets the needs of the majority of users and can be on the better half of the list of SAGE alternatives.

PRICING:

QuickBooks offers three plans, ‘Simple Start’, ‘Essentials’, and the ‘Plus’ plan valued at $9/month, $13.50/month, and $19/month respectively. These are on the higher spectrum. The services vary significantly with a change in plan, making QuickBooks suitable for large businesses.

2.ProfitBooks

4 Trustworthy Sage Alternatives In The UAE: ProfitBooks Dashboard

ProfitBooks creates a pretty welcoming environment for businesses to thrive. What’s good about them is they’ve made it super user-friendly, so you don’t even need to hire an accountant. I mean, even if you’re clueless about accounting, you can handle it with ease.

They’re not big on direct integrations with other platforms, but they’ve got a workaround using Excel to move data around if you ever need it.

One more thing that sets ProfitBooks apart is its simplicity. They don’t overwhelm you with super complicated reports. Instead, they keep it focused on what matters. It helps you concentrate on the essentials, which later leads to a more solid and non-negotiable analysis of crucial points, resulting in steady but significant growth.

They’re one of the very few accounting software providers worldwide that offer a lifetime FREE plan. It’s not some stripped-down version either; it’s quite valuable, especially for startups and small businesses. I’ve found it to be quite handy myself. It is probably the best in the list of Sage alternatives in the UAE.

PRICING:

They offer two plans; the full-time free plan labeled the ‘Startup’ plan and another plan called the ‘SMB’ plan worth $15/month. This is quite cheap compared to the counterparts with little to no compromise on services offered.

3.Xero

4 Trustworthy Sage Alternatives In The UAE: Xero Dashboard

Xero has very good functionalities and it is confirmed by every decent source that I researched. It has a huge set of reports and analyses. Xero mingles well with other APIs and software. Large and medium-sized businesses could look forward to Xero as their accounting software.

Xero proves to be an upgrade on SAGE as an alternative but is still very pricey. Other SAGE alternatives mentioned in the article are not very expensive and offer enough services. Xero also seems to be an accountant’s software provided its complexity. It may lead to the necessity of an accountant.

Despite this Xero is recommended as a SAGE alternative if you think your business needs a very robust and complexly functional software.

PRICING:

Xero currently offers three plans in the UAE. The starter plan at $24/month, the standard plan at $40/month, and the premium plan at $54/month. The starter plan has very less facilities and that is quite troubling for new businesses. Xero therefore is not the most opted among the Sage alternatives in the UAE.

4.FreshBooks

4 Trustworthy Sage Alternatives In The UAE: Freshbooks Dashboard

Over 24 million people use FreshBooks, a popular accounting program, across more than 160 countries. Both small and large businesses, as well as independent contractors, can use it. Invoicing, expense management, and time tracking are important features.

The platform provides easily navigable invoice templates that can be customized. However, the $15 to $50 monthly price range can be viewed as somewhat expensive. Although it offers seamless third-party app integration and support for international payments, some users complain that it lacks advanced accounting features.

There is no 24/7 hotline, but there is a Help Center, online chat, and phone support available at certain times.

Customizable invoices, expense management, project collaboration, custom estimates, accounting reports, mileage tracking, and multi-currency support are just a few of the accounting features available. It integrates with Gusto for payroll needs even though it doesn’t have internal payroll.

PRICING:

FreshBooks provides a range of pricing plans to suit various business needs. The “Lite” plan is available at USD 17.00 per month, offering essential features for invoicing. The “Plus” plan, priced at USD 30.00 per month, includes additional capabilities such as automatic expense tracking. For more advanced users, the “Premium” plan is offered at USD 55.00 per month, featuring enhanced customization. Additionally, FreshBooks offers a “Select” plan with personalized pricing.

HOW TO CHOOSE THE BEST SUITABLE SOFTWARE FOR YOUR ACCOUNTING NEEDS?

Choosing the right accounting software for your company is a big decision. First things first, you’ve got to pick between desktop-based or cloud-based software. Cloud-based software is quite popular because it can sync your data, back it up automatically, and you can access it from anywhere with an internet connection. But if you’re in a place with shaky internet or need to do stuff in person super quickly, the offline option might be better.

Now, let’s talk security. Your data’s safety is a big deal. Make sure the software uses something called HTTPS for secure data transfer. And if they’re partnering with reliable cloud hosting companies like Amazon or Rackspace, that’s a good sign.

Next, figure out what you need the software to do. Do you need it for things like making invoices, tracking expenses, managing your inventory, or reconciling your bank statements? That’s important to know.

Think about the future, too. You want software that can grow with your business.

Also, make sure you can easily take your data with you if you ever decide to switch software. Watch out for any hidden fees, like extra charges for transactions or integration. And be clear on what the free trial version lets you do.

Don’t forget about support! It’s super important. Check if they have different ways to get help, respond quickly, have good knowledge, offer resources, and update the software.

Do not hesitate to change the software you are using if you find that it is not enough for your business. Look for alternatives like we did with this article accessing SAGE alternatives in UAE.

In the end, when you’re picking your accounting software, just remember these things and match them up with what your company needs and wants. One option to consider is ProfitBooks. It’s great for small and medium-sized businesses, with user-friendly features, room to grow, a reasonable price, awesome support, and clear expenses.

CONCLUSION

So, there you have it, a thorough examination of SAGE alternatives in UAE and what elements to take into account when selecting the best accounting program for your company. It is evident that with the help of these software options, managing finances doesn’t have to be a difficult task.

Keep in mind that the right software can change the game by enabling you to cut costs, grow your company, and gain insightful information through thorough analysis. Additionally, it offers improved security for your financial data and guarantees that you are on top of taxes.

You can choose the option that best fits your business needs and budget by comparing the alternatives, including QuickBooks, ProfitBooks, Xero, and FreshBooks.

Flexibility and adaptability are essential in the constantly changing world of accounting. Don’t be afraid to experiment with new options, and if your current software isn’t cutting it, look for replacements that will enable your company to grow. Happy financial health and prosperous business endeavors!

The post 4 SAGE Alternatives In The UAE appeared first on ProfitBooks.net.

There are so many aspects of a business a business owner has to worry about, the most important aspect is none other than “accounting.”

In the land of flying cars, and floating hotels, keeping your business books sharp with top-of-the-market accounting software is a no-brainer.

Hence, here is a list of 5 accounting software for your business.

Why use accounting software?

Accounting is one of the most important aspects of any business, no matter the size of that business. 

Accounting software is a very versatile tool to have. You can not only maintain your financial transactions but also manage business workflow.
Have a list of account payables and receivables, manage your inventory and so much more. 

 Many businesses around the world use software to manage their books, here are the top 5 of them.

1) Zohobooks Accounting Software

Zoho Books is one of the most famous accounting softwares on the market. The software is tailor-made for its United Arab Emirates customers. It is one of the first software to do so as well.
The software is very user-friendly and comfortable to use. let’s see its pros and cons to better understand the software.

Pros 

Following are the pros of this software. 

1. Affordable:
   Running a business is no child’s play, there are a lot of things a business owner needs to pay for. Accounting software should not be another item on their list that costs an arm and a leg.
   This is why a lot of businesses prefer Zoho books as it’s very economical for even small and medium-size businesses.
2. User-friendly:
   The biggest merit of software is its useability. Zoho gets 100 points for its user-friendly interface. You don’t need to expect to work with this software, it’s one of the biggest reasons why this software is so beloved by business owners.
3. Integration with other Zoho products:
   Zoho as a brand offers all kinds of services for business owners. Including but not limited to Invoicing, HR, Payroll, etc.
   All the Zoho software is integrated with Zoho books. You can integrate different softwares with Zoho books to have more versatility to manage your workflow better.
4. Cloud-based:
   We all love the comfort of working anywhere in the world and still deliver quality work. With cloud-based software like Zoho Books, you can do so.
   Zoho Books allows you to manage all your accounting from anywhere your business takes you.
5. Customization:
   Zoho allows you to customize your software to a degree. This will help you make the software yours, with personalized branding and custom invoices.
   this will also help you in your covert marketing efforts and brand recollection.
6. Customer support:

Cons

1. Limited features:
   Compared to some other accounting software solutions, Zoho may have fewer advanced features, which could be a limitation for businesses with more complex accounting needs.
2. Reporting capabilities:
   While Zoho provides basic financial reports, some users find the reporting functionalities lacking in terms of customization and advanced analytics.
3. Scalability:
   As your business grows and your accounting needs become more complex, Zoho’s accounting software might not scale as well as some other enterprise-level solutions.
4. Third-party integrations:
   While Zoho integrates well with other Zoho products, it may not have the same level of integration with third-party apps and services compared to some other accounting software options.
5. Data export limitations:
   Some users have reported difficulties in exporting large amounts of data, which can be an issue if you want to migrate to a different accounting software platform.
6. Platform stability:
   In the past, there have been occasional reports of system outages and performance issues affecting Zoho’s accounting software

2) Tally

1. Simplicity and ease of use:
   Tally is known for its user-friendly interface, making it easy for businesses to manage their accounting and financial tasks, even for users without extensive accounting knowledge.
2. Comprehensive accounting features:
   Tally offers a wide range of accounting features, including financial reporting, invoicing, inventory management, payroll, tax management, and more, making it a complete accounting solution for many businesses.
3. Scalability:
   Tally is suitable for both small businesses and larger enterprises, and it can accommodate the growing needs of a business as it expands.
4. Data security:
   Tally provides robust data security measures, including user access controls and data encryption, to protect sensitive financial information.
5. Local language support:
   Tally supports multiple languages, which can be beneficial for businesses operating in regions with diverse language preferences.
6. Regular updates:
   Tally releases regular updates to improve features, fix bugs, and ensure compliance with changing tax regulations and accounting standards.

Cons of Tally:

1. Limited cloud capabilities:
   As of my last update, Tally’s cloud-based features were not as extensive as some other cloud-based accounting software solutions. However, Tally Prime (an updated version) might have addressed this limitation to some extent.
2. The learning curve for advanced features:
   While Tally’s basic functionalities are easy to grasp, mastering some of the more advanced features and customizations may require additional learning and training.
3. Limited third-party integrations:
   Compared to some other accounting software options, Tally might have fewer integrations with third-party applications, which could be a limitation if you rely on various specialized tools for your business operations.
4. Interface design:
   Some users may find Tally’s user interface to be slightly outdated compared to more modern accounting software interfaces.
5. Customer support:
   While Tally provides customer support, the quality and response times may vary, which can be frustrating for users experiencing critical issues.
6. Offline limitations:
   The primary mode of operation for Tally has traditionally been offline, which might not be ideal for businesses that require real-time cloud-based collaboration.

3) Quickbooks

1. User-friendly interface:
   QuickBooks is known for its intuitive and user-friendly interface, making it easy for business owners and accountants to manage their financial tasks efficiently.
2. Feature-rich:
   QuickBooks offers a wide range of features, including invoicing, financial reporting, expense tracking, inventory management, payroll processing, and more, making it a comprehensive accounting solution for many businesses.
3. Customization:
   QuickBooks allows users to customize invoices, reports, and other aspects of the software to suit their specific business needs.
4. Third-party integrations:
   QuickBooks integrates with numerous third-party applications, allowing businesses to connect their accounting software with other tools they use, such as CRM systems, e-commerce platforms, and payment gateways.
5. Cloud-based options:
   QuickBooks offers cloud-based versions, such as QuickBooks Online, which allow users to access their financial data from anywhere with an internet connection and collaborate with team members in real-time.
6. Strong customer support:
   Intuit, the company behind QuickBooks, provides reliable customer support, including online resources, community forums, and responsive customer service.

Cons of QuickBooks:

1. Cost: While QuickBooks offers various pricing plans, some users may find the software’s subscription costs to be relatively higher compared to some other accounting software options.
2. The learning curve for advanced features:
   While the basic functionalities are straightforward, some advanced features in QuickBooks may require additional training to use effectively.
3. Limited multi-currency support:
   As of my last update, QuickBooks had some limitations with multi-currency support, which might be a drawback for businesses dealing with international transactions.
4. Security concerns:
   While QuickBooks employs security measures to protect data, there have been occasional concerns regarding data breaches and security vulnerabilities, emphasizing the need for strong password practices and data protection protocols.
5. Bloatware:
   Some users have expressed concerns that QuickBooks can become “bloatware” over time as Intuit introduces new features and updates, potentially impacting the software’s performance.
6. Reporting customization limitations:
   While QuickBooks provides various pre-built reports, some users have mentioned limitations in customizing reports to their specific requirements.

4) Profitbooks 

1. User-friendly interface:
   ProfitBooks is known for its simple and user-friendly interface, making it easy for users with limited accounting knowledge to manage their finances effectively.
2. Cost-effective:
   ProfitBooks offers affordable pricing plans, making it an attractive option for small businesses with budget constraints.
3. Inventory management:
   ProfitBooks provides robust inventory management features, allowing businesses to track their stock levels, manage purchases, and handle sales efficiently.
4. Customizable invoices:
   Users can customize invoices with their branding, making them look professional and aligned with the company’s image.
5. Multi-user collaboration:
   ProfitBooks allows multiple users to access the software simultaneously, which can enhance collaboration within the finance and accounting teams.
6. Cloud-based:
   Being a cloud-based solution, ProfitBooks allows users to access their financial data from anywhere with an internet connection, offering flexibility and real-time insights.

Cons of ProfitBooks:

1. Limited scalability:
   While ProfitBooks is suitable for small and medium-sized businesses, it may lack some advanced features needed for larger enterprises with complex accounting requirements.
2. Reporting limitations:
   Users have reported that the reporting capabilities of ProfitBooks may be relatively basic compared to some other accounting software options, potentially restricting in-depth analysis.
3. Integrations:
   As of my last update, ProfitBooks had limited third-party integrations, which might be a limitation for businesses that rely on other tools and applications.
4. Customer support:
   Some users have mentioned concerns about the responsiveness of customer support, indicating that support resources may be limited.
5. Mobile app limitations:
   While ProfitBooks offers a mobile app for on-the-go access, some users have experienced limitations in terms of functionality and ease of use compared to the desktop version.
6. Currency support:
   ProfitBooks might have limitations regarding multi-currency support, which could be a drawback for businesses dealing with international transactions

5) Sage

1. Scalability:
   Sage provides accounting software solutions that cater to the needs of small businesses, medium-sized enterprises, and large corporations, allowing for easy scalability as your business grows.
2. Feature-rich:
   Sage accounting software typically offers a wide range of features, including financial reporting, invoicing, inventory management, payroll, tax management, and more, making it a comprehensive solution for many businesses.
3. Customization:
   Sage accounting software allows users to customize invoices, reports, and workflows to suit their specific business requirements and branding.
4. Security:
   Sage emphasizes data security and implements measures such as user access controls and data encryption to protect sensitive financial information.
5. Multi-currency support:
   Sage accounting software usually provides robust support for handling transactions in multiple currencies, making it suitable for businesses engaged in international trade.
6. Third-party integrations:
   Sage integrates with various third-party applications, enhancing its functionality and allowing businesses to connect with other tools they use, such as CRM systems and payment gateways.

Cons of Sage Accounting Software:

1. Learning curve:
   Sage accounting software may have a steeper learning curve, especially for users who are new to accounting software or those transitioning from other platforms.
2. Cost:
   Depending on the specific version and features you need, Sage accounting software might be relatively more expensive compared to some other accounting software options, which could be a drawback for smaller businesses with budget constraints.
3. User interface:
   Some users have found the user interface of certain Sage products to be less intuitive or visually appealing compared to other accounting software options.
4. Customer support:
   While Sage generally offers customer support, the quality and response times may vary, which could be a concern for users experiencing critical issues.
5. Software updates:
   Some users have reported occasional issues with software updates and compatibility, which could impact the user experience and cause temporary disruptions.
6. Performance:
   In some instances, users have experienced slower performance with certain Sage accounting software products, particularly when handling large datasets or running complex reports

 FAQs

Q1. What are the security features of accounting software?

Accounting software providers take security very seriously. They use a variety of security measures to protect your data, such as encryption, firewalls, and intrusion detection systems.

Q2. How can I integrate accounting software with other business applications?

Many accounting software providers offer integrations with other business applications, such as customer relationship management (CRM) software and inventory management software. This allows you to share data between different applications, which can save you time and improve efficiency.

Q3. What are the training and support options available for accounting software?

Most accounting software providers offer training and support options to help you get started and use the software effectively. This may include online tutorials, live chat support, or phone support

.

Q4. How do I migrate my data to a new accounting software?

If you decide to switch to a new accounting software, you will need to migrate your data. Most accounting software providers offer migration services to help you move your data from one system to another.

Q5. What are the future trends in accounting software?

The future of accounting software is likely to be cloud-based, mobile-friendly, and integrated with other business applications. Cloud-based accounting software is already becoming more popular, as it allows businesses to access their data from anywhere. Mobile-friendly accounting software is also becoming more popular, as businesses want to be able to access their data on their smartphones and tablets. And integrated accounting software is becoming more popular, as businesses want to be able to share data between different applications.

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