Setting up a business in Dubai could be one step closer to your dream. Even if it is a small business, with calculated steps and formulated business strategy, you can make it big one day. Income from tax is the main source for the financial stability of the UAE. Hence, federal laws are strict regarding tax assessments and tax collection. The Federal Tax Agency is authorised to institute tax audits, tax calculations and monitoring of tax collection.
The tax can be a big burden on you affecting the profit margin of your business. If you own a small business, it could be advantageous for you to save even a minimum amount in tax. There are measures and methods, which will help you in reducing the tax burden of your business. You may also outsource the same to tax accounting services in Dubai. A lot of professional accounting consultants provide VAT services in Dubai to guide people regarding saving on tax. They will also be able to brief the team in your organisation about the best methods to be followed.
The money saved could be utilised for the development of your small business, the opening of additional branches or the introduction of new products/services. The employees allocated with the task of tax calculation, filing the tax return and monitoring of expenditures need to be fully versed with the tax laws. The regulations and laws of tax are revised periodically. Hence, they have to be updated continuously about it. Missing out a new directive may result in your firm paying additional tax unnecessarily.
Calculate Write-Offs Correctly
You can keep detailed information regarding the expenses towards the purchase of furniture, costs for setting up of the business, travel charges, training expenses for staff, additional expenditures for supplements, payment for insurance of company and employees. This can be included in write-offs for claiming tax rebates. You can associate with professional tax consultation services in Dubai for keeping all the records and obtaining tax exemptions on the same.
As you can claim tax exemptions and rebates on certain types of purchases, you may schedule the purchases accordingly. Rather than buying all the items in the same fiscal, you may plan it to spread over different financial years. Thus, you can claim tax rebates accordingly.
Donations to Charity
Tax exemption could be claimed on donations to charity. The donations will give you tax savings as well as goodwill. Even if you don’t publicise the contributions, the news from charity firms can get you publicity.
You must keep all the documents, certificates and bills in original. The FTA officials may ask for the same during the tax audit. The FTA accepts only original bills and you need to submit those as and when directed.
Calculate and Follow Income/ Expenditure Ratio
You can follow a pre-formulated income-expenditure ratio. You can increase the expenditure during the final months of a fiscal and delay the income to the next fiscal. Thus, reducing the tax burden of your business on a particular financial year. Tax consultation services in Dubai can help you in planning it.
Retirement plans for employees
All the payments made to retirement plans are exempted from tax. You can start a retirement plan for your employees and remit an amount to it on a monthly basis. The transaction details of the money paid to retirement plans be kept for reflecting in tax exemptions.
This will help you in reducing the tax burden of your small business in Dubai. Besides, the positive action aimed at better post-retirement life will boost the morale of the employees. And their productivity will increase remarkably.
Organise business accordingly
The business structure matters a lot in tax calculations. A perfectly structured business can reduce the tax burden effectively. It will be better if you contact professional tax accounting services during setting up of business. They will be able to guide you regarding the business structure.
Keep a tab on all expenses
Keep the documents, bills and certificate related to all expenses properly. This may be required during final tax calculation or for presenting to the FTA officials. It will help you in ensuring that nothing is missed out during the final calculation.
It may also happen that certain expenses are protracted over the years. A properly maintained documentation will be essential to monitor those. A dedicated team may be assigned with the task of maintaining, monitoring and calculating tax. An outsourced professional agency also will be of great help.
The above-mentioned tips can help in reducing the tax burden on small businesses. Every penny saved will add to the development of your small business in Dubai. A wisely managed business will grow amply in a short period of the operation itself.
There are also professional tax consulting agencies who can help you in tax management and VAT services in Dubai. They will have professionals with exceptional experience in the field. And will be able to suggest more methods to reduce the tax burden.