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Ever wondered whether you need cash basis or accrual basis accounting in the UAE? First of all a Person accounting on a cash basis incurs expenditure when it is paid and a Person accounting on an accruals basis incurs expenditure when the obligation to pay arises. According to Ministerial Decision No. 114 of 2023 on the Accounting Standards and Methods for the Purposes of Federal DecreeLaw No. 47 of 2022 on the Taxation of Corporations and Businesses this is what you need to follow: Article (2) Preparing Financial Statements Using the Cash Basis of Accounting For the purposes of paragraph (a) of Clause (5) of Article (20) of the Corporate Tax Law, a Person may prepare Financial Statements using the Cash Basis of Accounting, in any of the following instances: 1. Where the Person derives Revenue that does not exceed AED 3,000,000 (three million United Arab Emirates dirhams). 2. In exceptional circumstances and pursuant to an application submitted by the Person to the Authority. If you need assistance with your corporate tax registration, VAT and/or bookkeeping in the UAE, even as a free zone company, drop me a message. There is more to it. #dubaitax #dubaibusiness #dubaifinance #taxes #bookkeeping #becompliant
