In an endeavor to provide regular updates to assist companies in Abu Dhabi Global Market (ADGM) Chhokar & Co provides useful tips and suggestions to help you keep on top of the regulatory requirements. This edition features the latest news and insight on imposing of financial Penalties. We’ve also included our handy Chhokar & Co Factsheet on Statutory requirement and Annual Accounts overview for business established and newly formed companies.
ADGM License Renewal
Accounting & Bookkeeping
FTA urges agents to ensure uninterrupted activity - "Professional Standards for Tax Agents",
The Federal Tax Authority (FTA) has called on tax agents to comply with the five professional standards for tax agents, published in a new guide on the subject, in all of their transactions to ensure uninterrupted activity.
Titled "Professional Standards for Tax Agents", the new guide was issued through the FTA's official website, offering a detailed explanation of the standards and conditions required for practicing the profession of tax agent in the UAE. In the new guide, the FTA offered a detailed explanation of the five professional standards that should be met by tax agents, noting that a system has been put in place to track and ensure compliance with these standards. The system relies on three methods, first of which is reviewing the timeliness and accuracy of the Taxable Persons' returns if they have appointed a tax agent. The second approach is monitoring requests for clarifications and other correspondence with the FTA sent by Tax Agents, in order to ensure that their professional and technical knowledge meets the level expected of them under the outlined professional standards.
The FTA has accredited 357 tax agents who meet the technical standards, conditions and qualifications required, and who have passed the exams set by the authority. The Federal Tax Authority explained that the Code of Ethics consists of five standards: integrity, objectivity, professional competence, confidentiality, and professional behavior. A person acting in their capacity as a tax agent is expected to uphold these standards, which ensure that they are committed to the Code of Ethics, developed by the FTA based on the common international standards expected from the tax profession generally, and in particular, required as part of the membership criteria of professional bodies governing standards in the tax profession. FTA director general, Khalid Ali Al Bustani, underlined the important role that tax agents play in strengthening the relationship between the authority and taxable persons, improving compliance rates, raising awareness around the principles of the tax system and its executive and control regulations, and introducing the services and facilities the FTA offers to help taxpayers comply with regulations. The FTA has drafted and published a series of guides and public clarifications covering all legislative and executive aspects of local tax systems, including guides on tax agents and agencies, which outline the procedures and conditions for a tax agent to register with the authority. Al Bustani called on all authorized tax agents to take advantage of these manuals and publications and study them extensively to improve their knowledge of this vital sector, and provide accurate information to their clients, helping promote a healthy tax culture among businesses in the UAE.
The authority outlined a third and final method for monitoring tax agents and ensuring compliance with the new standards; it consists of monitoring correspondence received from taxable persons, including any official complaints, requests for reconsideration, and requests for exemption from or reduction of administrative penalties, which clearly state that relying on a tax agent contributed to the error being made. Courtesy – Khaleej Times
Legal framework at ADGM boosts Abu Dhabi's competitiveness as a financial hub- The top four financial centres in the world rely on the common law, a system ADGM embraced upon its establishment Since the launch of ADGM in 2013, Abu Dhabi has moved up in a ranking of competitiveness for major global financial centres from number 39 to 26, according to the Global Financial Centres Index. Paris, by comparison, is number 27. There are many good reasons for this, not least the highly attractive legal regime that applies in ADGM. The top four financial centers in the world rely on the common law, a system ADGM embraced upon its establishment in 2013. This was a visionary step for a start-up financial center, enabling it to mature into its current position with over 10,000 people operating within it, along with over 1,200 businesses.
However, embracing the common law system was not the only daring step taken. ADGM and the Financial Services Regulatory Authority (FSRA), its regulator, have also subjected themselves to a level of oversight rarely matched even in longstanding jurisdictions. This occurs through "administrative law", a system subject to the ordinary jurisdiction of the courts, applying the same procedures and rules of evidence as for any other dispute.
Officials are not institutionally advantaged by such a system; they are simply treated like any defendant. By contrast, in many civil law systems, administrative law issues fall under the jurisdiction of special tribunals, with their own rules and sometimes even a separate supreme court. In a regional context, a robust administrative law route to challenge decisions of officials is not a given, as the concept simply does not exist in many states. To have one as sophisticated as that established in ADGM is a significant step.
The legal regime for ADGM does not impinge on sovereignty and the ability to control. It allows for ADGM and the FSRA to make new rules swiftly to correct any gaps or rectify any departures from preferred policy. The FSRA has extensive powers to ensure businesses are properly managed and behaviors are appropriate, just like any other international regulator. What is so unusual is having the confidence for the system to judge itself and be judged.
LICENSE RENEWAL PROCESS AND REQUIREMENTS
The ADGM Commercial License must be renewed annually prior to expiry of the existing license. Firms licensed to conduct retail activities in ADGM must also have in place relevant Abu Dhabi Government approvals, permits or no-objections, depending on the nature of the retail activities. Such permission(s) must be kept valid at all times. Evidence of the permission(s) will be required when applying to renew the ADGM commercial license.
License Renewal Fees
Payment by Electronic Funds Transfer ADGM accepts payment by credit card or electronic funds transfer. Note that credit card is preferred as funds transfers may cause delays.
Are you ready for your License Renewal? Do you need help?
Free no obligation Initial Consultation: E: firstname.lastname@example.org T: +971 42400333
Annual Return should not be confused with your company’s annual accounts filing the two are completely separate filing and will not usually be filed at the same time. The annual return confirms basic information about your company such as
The details of your registered office, directors, secretary and the address where you keep your records.
The Type & the business activities of the company
The company’s statement of capital and shareholder information if your company has shares.
When do the companies need to submit an annual return? The Registration Authority will send an email alert or reminder to your company’s authorized users when your annual return is due. The due date of submitting the annual return is the period beginning immediately after the anniversary of incorporation to which the last return was made up (or, in the case of the first return, with the incorporation of the company) and ending with the next anniversary of incorporation The Submission Time frame: Submitted to the Registration Authority within one month after the anniversary date
The foundations for Chhokar & Co Global were laid in 1994. Today it is a respected specialist Group headquartered in the United Kingdom and providing a range of Legal, Tax, Accounting, Auditing and Corporate Solutions to individuals and businesses all over the world.
Our continuing motivation remains developing and maintaining long lasting professional relationships by providing superlative client care based upon the utmost commitment to our client’s interests and exceptional attention to detail – and delivered through tireless and dedicated efforts.
Our multi-disciplinary, multi-lingual team of tax experts and accountants will understand your circumstances, advise on various options available and implement agreed strategies – at all times designed to maximize protection and security and minimize impact of taxes.
Every company must keep adequate accounting records
Accounts must be prepared in accordance with IAS
1st Accounting Reference Period is a period of more than six months but not more than eighteen months (from the date of incorporation to the Accounting Reference Date)
A company’s Directors to prepare directors report
Only public companies to lay accounts before a general meeting
Private companies to circulate a copy of accounts & reports to members when filing to Registrar
Company’s directors must deliver to the Registrar accounts & reports required each financial year (except RSCs and Foundations, branches of foreign companies, dormant subsidiaries)
Accounts to be filed:
Small companies: balance sheet
Medium / general companies: audited accounts and directors report
Companies qualify as small if
Turnover not more than USD 13.5M and
No. of employees not more than 35
The restricted scope companies will not be subject to filing the annual accounts to the registrar unless the registrar has given notice to deliver all required accounts. Duty to file accounts and reports with the Registrar:
ACCOUNTING AND BOOKKEEPING
Accounting and Bookkeeping are both very essential financial functions, and while they might be mistaken to be the same thing – they’re actually very different from one another. Let’s first understand what each one stands for.
Bookkeeping is the art of identifying and maintaining accounts and financial statements. Accounting is the process of summarizing, interpreting, and analyzing financial transactions which were classified in the records.
This stands to be the basic difference between Accounting and Bookkeeping. They’re very inter-dependent but they have their share of similarities and differences – and many accounting firms in Dubai can take you through the same process.
The major difference is that the management can never take crucial decisions based on bookkeeping records, they would need a thorough analysis which can be provided by tax firms, to be able to take important decisions in the business. Also, the next major difference would be the objective why both these functions are carried out – Bookkeeping is done to maintain records in one place and to be able to serve it as and when required, while the objective of Accounting is to understand the standing of your business. It helps you gather exactly where you stand in the financial world, and what needs to be taken care of. Also, another important thing to note is that bookkeeping is a direct process and doesn’t require specialist skills whereas Accounting requires a specialist to make important and relevant inferences and help the management take decisions.
Drawing up a will in the UAE can come with a hefty bill - While drafting and registering your last testament in the UAE can be costly, legal experts says it’s a necessary expense
For expatriates in the UAE, the laws and procedures related to wills can be daunting and unclear. The country’s inheritance laws are based on Sharia which prescribes a fixed share allocation of assets. Previously, if non-Muslims preferred to circumvent this allocation, they had to request the law of their home country be applied in accordance with the UAE’s personal status law.
Now non-Muslims can draw up and register wills for their assets in the UAE that follow common law. This was made possible with developments such as the establishment of the DIFC Wills and Probate Registry (now called the DIFC Wills Service Centre) in 2015 and the Non-Muslim Wills & Probates Office at the Abu Dhabi Judicial Department (ADJD) in 2017.But the path is still not clear-cut. The cost to draft a will varies between Dh1,200 and Dh6,000, depending on whether it is online or with a professional legal firm. The cost to notarize or register a will starts from as little as Dh950 at the ADJD to as much as Dh15,000 at DIFC. There are different types of wills, too, from guardianship wills to full wills. Registering a will There are three ways for non-Muslims to register a will in the UAE. First, Dubai Courts have allowed wills to be attested by a notary public in Dubai since 2010. Second, at the DIFC Wills Service, which only covers assets in Dubai and Ras al Khaimah, wills are registered, and probate claims are handled through the DIFC Courts. The third option is at the ADJD, which allows non-Muslims from any emirate to register their wills and covers assets countrywide. The Dubai Courts and ADJD are essentially both notary services, allowing people to authenticate their wills. A single will costs Dh2,200 in Dubai and Dh950 in Abu Dhabi. The document must also be translated into Arabic, which adds translation costs. In Dubai, it is done at the Personal Status Court and involves certain paperwork, such as applying for a succession certificate. In Abu Dhabi, it involves even less paperwork, he adds. However, the outcome of these cases is ultimately up to the judge at the local courts, which means an individual’s wishes might not necessarily be upheld. Courtesy – The National
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Chhokar & Co is a business name of SSC Services DMCC Company is Registered and Licensed as a FREE ZONE Company under the Rules and Regulations of DMCCA. Registered office: Level 20, Office 20 B, Gold Tower, Cluster I, Jumeirah Lakes Towers, PO Box 376169, Dubai, UAE