The UAE’s banking system is one of the robust banking systems in the world and the Indian chartered accountants in Dubai have been playing significant role in strengthening the UAE’s banking industry, said experts at ‘The Banking Summit’ organized by ICAI (Dubai) Chapter.

Sunder Nurani, chairman, ICAI (Dubai) Chapter, reminded the members that as guardians of public trust, the chartered accountants should always ensure that their actions as CFOs, financial controllers, accountants and auditors should support the banking system positively as they are involved extensively compiling and auditing of financial statements — one of the criteria for the credit evaluations by the banks.

Nurani also spoke about the brief history of banking sector in the UAE and how the banking sector has evolved over the years with latest series of bank mergers. He briefly touched upon the recent profitable results published by the major banks which portrays continuous recovery of UAE economy from the pandemic.

The guest of honors, who addressed the chartered accountants in the summit include, Ibrahim Al Mheiri, head of Islamic Banking, Mashreq Bank; Mohamed Al Ali, managing director and head of cash management-advisory and solutions corporate institutional banking, FAB; and Nishant Ranjan, chief executive, GCC operations of Bank of Baroda. The guest speakers, who shared their insights and views include, Dhiraj Kunwar, managing director, business banking, RAK Bank; and Kumar Muthiah, divisional head, ADCB Bank Group.

Ibrahim Al Mheiri shared his experience on how the banking sector has changed over years especially after the Covid-19 pandemic. He said the current trends in banking sector are into investing in the technology and how to improve customer experience.

He emphasised that technology continues to find space in the banking sector resulting in continuous shift in the way banks work. He elaborated that SME sector is the backbone of UAE economy and thus is an important sector for the banks.

Mohamed Al Ali shared how the pandemic transformed the way banking works from traditional mode of physical banking to digital era. He congratulated Chartered Accountants for playing an important role in contributing to the UAE economy.

Nishant Ranjan said the EXPO 2020 has started, it’s more appropriate even for banking sector to replicate the theme of the Expo i.e. opportunity, sustainability and mobility which is espoused by the visionary leaders of UAE. He elaborated how banks are focusing on contactless payment solutions, upgrading the ATMs, introducing new customer engagement channels, finding ways of cost optimisation through paperless transactions by using digital footfalls and leveraging the rise in adoption of fintech and digital payments during this pandemic.

The event was also graced by other senior bankers in UAE such as Dhiraj Kunwar who engrossed the audience by sharing how SME banking is going through a transformation in terms of product, technology and risk management. Kumar Muthiah also graced the occasion and lucidly elaborated on how corporates need to conduct banking business and the importance of how smooth conduct of business can move the Bankers to lend against character than collateral.

Anurag Chaturvedi, vice-chairman, ICAI (Dubai) Chapter, mentioned that banking is critical element in unicorn making and credit with financial institutions developed through diligent business with sound and timely financial decision making. Businesses understanding the compliance requirements from banks to avail finances.

Harikishan Rankawat, secretary, ICAI (Dubai) Chapter, highlighted the importance of getting timely banking support for the SME sector in UAE which will enable this segment to reach the next level.

Source:https://www.khaleejtimes.com/finance/indian-cas-play-key-role-in-supporting-the-uaes-banking-industry

Organisations across the UAE which fail to comply with the rules in place regarding the tax audits conducted by the Federal Tax Authority (FTA) will be liable to pay hefty fines, experts warned at a webinar on Wednesday.

Presented by Khaleej Times & MBG Corporate Services, the event sought to bring clarity to some of the key issues regarding tax audits, and brought together key experts in the field to share their insights.

Vipin Ahuja, director – Tax, MBG Corporate Services, started the event with a presentation on why the Federal Tax Authority is conducting tax audits. He explained that the provisions of the federal law on taxation have mandated the FTA with the legal right to perform a tax audit on any person to determine their compliance with the provisions of the relevant laws. FTA authorities will check the returns and other documents like sales invoices, purchase invoices, Customs & VAT documents related to the import and export of goods and services. The FTA can conduct these for any reason, or whenever they want, as per a set of criteria. It is advisable for all business entities in the UAE to prepare themselves for these tax audits in a timely manner as the FTA allows only five days for responding to their queries.

Under the Self-Assessment System of VAT returns filing, the onus is clearly placed on taxpayers and businesses have to interpret and apply the tax legislation correctly to comply with their respective tax obligations, he explained.

Ahuja also shared probable factors for tax audit selection. “The first has to do with if your company is in a VAT refundable position. Ever audit starts with your risk profile and how your company holds up against the FTA risk profile parameters. If you are in this position, then you will definitely be on the FTA’s radar. Another factor is if you are a large-scale business with high volumes.”

Other reasons include a history of late Return submissions, the occurrence of incorrect filings, a non-reconciliation with Customs Records, delay of payment of Taxes/Penalities, and negative adjustments to imports

Laila Aziki, tax agent, MBG Corporate Services, then revealed that there are several penalties for non-compliance with tax audits. One of the heftiest is a Dh20,000 fine that will be charged for failure to facilitate the work of the tax auditor.

“The submission of an incorrect tax return will result in a penalty of Dh3,000 for the first time, and Dh5,000 for repetition and five per cent, 30 per cent, and 50 per cent based on the time of correction,” she said. “Non-maintenance of any financial records will result in a Dh10,000 penalty; and failure to settle the amount payable as sated in the return will result in a one per cent daily penalty up to 300 per cent when unpaid for one calendar month. This is increased to four per cent due on the seventh day and two per cent due tax immediately.”

Ahuja noted that companies can start their journey towards VAT compliance by ensuring accurate and complete data capture into the system; reconciliation of VAT Returns with Books of Accounts & Custom Records; and the maintenance of all the relevant supporting documents.

Source:https://www.khaleejtimes.com/business/local/failure-to-comply-with-tax-audit-to-result-in-hefty-fines-tax-experts-warn