Corporate Tax: what it changes in your bookkeeping
Corporate Tax gives your financial statements a direct consequence. Here is what that means for how records are kept during the year.
5 min readUpdated
For many UAE businesses, financial statements used to be something produced for the bank or a shareholder. Under Corporate Tax they became the starting point for a tax computation, which raises the bar on how they are prepared.
Your accounts become the foundation of the filing
The taxable income calculation starts from accounting profit and then applies adjustments. If the accounting profit is unreliable — expenses in the wrong period, missing accruals, personal costs mixed in — every number after it inherits the problem.
Practical changes worth making
- Keep owner and personal transactions strictly separate from company ones
- Document related party transactions properly, including what the arrangement is and on what terms
- Record expenses in the period they relate to, not the period they were paid
- Maintain a fixed asset register with a consistent depreciation policy
- Keep contracts and agreements filed alongside the accounting entries they support
The goal is that any figure in your financial statements can be traced back to a document without a hunt.
Why the year-round approach matters
A tax position assembled at year end from incomplete records takes longer, costs more and is harder to defend. The same position built on books that were maintained month by month is mostly a matter of running the computation.
Registration requirements, rates, thresholds and filing dates are set by the Federal Tax Authority and depend on your specific circumstances. Confirm them with the FTA or ask us to review your position.
This guide is general information, not individualised tax or legal advice. Rates, thresholds and filing dates are set by the Federal Tax Authority and depend on your circumstances.