THE IMPACT OF CORPORATE TAX IMPLEMENTATION ON ACCOUNTING PRACTICES AND BUSINESS COMPLIANCE IN THE UNITED ARAB EMIRATES

Abstract

This research paper has the objective to assess the ultimate influence of the Corporate Tax system in the United Arab Emirates, which had its formal opening in June 2023, on accounting and business compliance practices. The study only uses resources that are recognized as the best such as the Federal Tax Authority, KPMG, PwC, and IFRS Foundation, and it also investigates the new CT legislation's impact on various areas of financial reporting, internal controls, tax documentation, and compliance processes. The examination reveals that the Corporate Tax has imposed considerable technical requirements on entities that are preparing their financial statements under both the IFRS and the IFRS for SMEs, mainly with respect to the computation of the taxable income, the application of the realization-based principles, and the reconciliation of the accounting profit with the tax profit. Besides, companies are to secure new governance systems, super documentation, and updated accounting policies in order to conform to FTA's demands. This paper concludes that a Corporate Tax policy is a drastic change in the United Arab Emirates' regulatory environment, one that promotes transparency and conformity with international tax requirements but also imposes new compliance obligations on companies.