Established in 2002, with the aim of positioning Dubai as the gateway for commodities trading and enterprise, DMCC has become one of the most important economic pillars in the emirate, representing 15 per cent of total FDI. Moreover, it is recognised as the number one free zone for 9 consecutive years, and it's where the world does business. With more than 26,000 companies operating across 900+ activities, the accounting needs of a DMCC business can vary considerably, depending on how it operates. 

To back its financial position, DMCC companies need to have proper accounting records, such as transaction details and supporting documents. This helps prepare audited financial statements that are usually submitted within six months of their financial year-end. Where the books have been well-maintained, the audit does not have to be a frantic search for missing information. Our accountants in DMCC keep accounting records organised, so that the financial year can come to a close with a few loose ends.

What accounting records should a DMCC company have?

A DMCC company should maintain accounting records that provide an accurate representation of its financial position and transactions. All of them must be prepared in accordance with IFRS (International Financial Reporting Standards) and kept for a minimum of 5 years.

The company should have: 

• Financial Statements, like a balance sheet, income statement, cash flow statement, and accompanying notes.
• Bookkeeping Ledgers, such as trial balance sheets, inventory lists, and fixed assets records
• Commercial Documents, including Sales/purchase invoices, contracts, and payroll records. 
• Banking Records like Bank statements, monthly reconciliations, and deposits; 
• Tax and Corporate Records, such as VAT/excise tax returns and trade license documents.

Corporate Tax and Accounting Need to Work Together

Corporate Tax has made the quality of financial records even more critical for DMCC companies. The accounting information becomes supporting evidence for tax return, and companies that claim Qualifying Free Zone Person status should also meet additional requirements. Correct classification of records is helpful during the review of the tax position. Such data must be evaluated within the context of the company’s financial and operational positions. Accounting records can help identify the nature of revenue and related-party transactions, as well as other financial information relevant to the assessment.

To qualify for 0% corporate tax, a DMCC company has to meet the following requirements to be qualified as a Qualifying Free Zone Person:

• Real Substance: The company must have real offices and assets and employ personnel within the free zone.
• Qualifying Revenue: At least 95% of revenue should come from qualifying activities, with non-qualifying revenue within 5% or AED 5 million.
• Compliance: The company must have audited financial statements and ensure related-party transactions follow the arm’s length principle.

DMCC Accounting Services That Keep Pace with Business

A DMCC company can begin with a few transactions that can grow exponentially over time. New staff, more customers or changes in the business model can quickly put pressure on a finance process that was designed for the initial stage. Our accounting services in DMCC can scale with these pressures without creating unnecessary complexity in the finance function.

More From The Numbers

Accounting should tell management more than just what has happened. By having current records, business owners can understand where money is going and track outstanding balances to make the next financial move. Excellence provides accounting services in DMCC to ensure that this information is available throughout the year.