Understanding VAT in the UAE 2019

Value-Added Tax or VAT is a tax on the consumption or use of goods and services levied at the point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world. All OECD countries except for the US have VAT (or a variation). While it feels exactly the same as a general sales tax to end-consumers, VAT is a more sophisticated tax and overcomes many challenges that affect the general sales tax.

VAT is charged at each step of the ‘supply chain’. End consumers generally bear the VAT cost while registered businesses collect and account for the tax, in a way acting as a tax collector on behalf of the Federal Tax Authority.

NEED TO MAINTAIN RECORDS

VAT registered businesses will need to charge and account for VAT however, all businesses are required to maintain their business records and other information as specified in Tax Procedures Law and the Tax Law.

The fine for failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law is AED 10,000 the first time and AED 50,000 if repeated.

Administrative penalties for violations have been issued by Cabinet Decision No. (40) of 2017 and can be found under the Legislation section on the FTA website.

EXECUTIVE REGULATION

As per Article 2 of the Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures Accounting Records and Commercial Books shall include the following:

accounting books in relation to that business, which include records of payments and receipts, purchases and sales, revenues and expenditures, and any business, and any matters as required under any Tax Law or any other applicable law, including:

1) Balance sheet and profit and loss accounts.
2) Records of wages and salaries.
3) Records of fixed assets.
4) Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.

BRITISH ACCOUNTANTS IN DUBAI

Profits Plus Accountants are British accountants based in Dubai. We deploy the most advanced software in the World in order to make sure that you remain 100% compliant and we leave no room for error when it comes to your accounting records.

Mubashir Malik the Managing Partner can be reached on +971529834145 and welcomes meeting in person to discuss how he can help your business or email us on [email protected]

www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping consultancy registered with Dubai Economy, Trade License No. 796316 and trading with the name Profits Plus Accountants.

 

Updating your details on the FTA portal to avoid AED 15,000 Penalty

keep up to date

AED 15,000 The failure of the Registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to his tax record kept by Authority

FTA in Dubai state that if you fail to inform them of changes in any circumstances you will incur a penalty of AED 5,000 initially and AED 15,000 for repeating it.

The main items that go out of date are as follows:

  • Trade License
  • Emirates ID
  • Possible Passport Copy

The above are basic items that should always be updated when they are renewed, however the problems arise when you are updating the items.

The portal has been updated to make mandatory the need to include your bank account and power of authority, these items were not mandatory when many companies registered for their TRN number in 2017.

Also for some companies the FTA require them to provide a financial statement to confirm the sales and expense for the last 12 months. I would really urge business owners to consult a tax advisor when doing this as many companies are incorrectly registered for VAT and providing such financial statements could cause the FTA to request other information eventually leading to a penalty of either AED 10,000 for failing to deregister or AED 3000++ for submitting and incorrect return.

To be honest this is all it takes to keep your FTA portal up-to-date and in addition to the above the basics such as contact details can only be updated through an email to the FTA and not through the portal.

Ali Afzal is the Managing Director and VAT Consultant for Profits Plus Accountants registered as Profits Accounting and Bookkeeping a British Owner Managed Accounting Firm in Dubai. We manage over 100 clients vat submissions and cater for clients from around the World. We are registered with Xero Cloud Accounting as a Silver Tier Partner and our fees start from AED 850 per month. Contact me on [email protected] for more information.

4 Quick Facts About Registering for VAT in the UAE

Must Know Facts About VAT in the UAE

Registering for VAT in Dubai should not be taken lightly and certainly not considered part of the process of operating in Dubai, you only need to register if you qualify or if you exceed a threshold. Failing to adhere to the Federal Tax Authorities in Dubai is a serious offence and can incur heavy penalties. Below are 7 facts that you must understand before registering for VAT in Dubai.

1. Individual Responsibility
When you register for VAT you are registering the person that is operating a business, not the business itself. Ultimately it is the individual who will be responsible the vat and the responsibilities that come with registering for VAT with the FTA. This responsibility must not be taken lightly and it is ultimately connected back to your Emirates ID.

A person can only hold one TRN for VAT purposes at any one time. It is your responsibility to ensure that duplicate applications are not submitted.

2. When do I need to register for VAT?
There is no need to register for VAT with the FTA when starting your trade license. There is so much incorrect advice on this matter. The principles requirements of VAT are fixed and therefore it is not a choice to register when setting up a company.

Mandatory Registration – if you meet the following criteria then you must register immediately:
• Your turnover was more than AED 375,000 in the last 12 months; or
• You expect that your turnover will be more than AED 375,000 in the next 30 days.

Voluntary Registration – if you meet the following criteria then it is your choice however your next 12 months will play an important factor on whether you should register voluntarily or not:
• Either your turnover or expenses (which will be subject to VAT) were more than AED 187,500 in the last 12 months; or
• You expect that either your turnover or expenses (which will be subject to VAT) will be more than AED 187,500 in the next 30 days.

3. Applying for exemption from VAT
If you have a trade license in the UAE (LLC or Freezone) and do not operate in Dubai and receive all income from outside UAE then you may qualify for exemption from VAT but you still MUST apply for this through the FTA. Banks will request this and may hold payments as a result. This is also known as zero-rated supplies.

4. Branches are not separate legal entities
Only the entity of which they are branches should apply for registration where that entity meets the relevant criteria. Even if you are operating via branches in more than one Emirate, only one VAT registration is required.

The guaranteed way to raise money for your small business

Business loans used to be the responsibility of the banks, but that is no longer the situation. Banks want to lend to companies that carry a low risk or have enough assets to secure against the loan amount.

Business loans in Dubai are even more difficult, especially since 80% of the population is made up of Expats that could exit anytime their situation changes either in Dubai or in their hometown. Not that they would leave without paying their debts………..

Small businesses are the lifeline of a any country but most small businesses struggle with cashflow and this can significantly hinder growth. Lack of funding is also required when a business ends up having to write off bad debt and lack of access to timely funding can cripple a business if that was to happen.

So how can a small business owner access funding in such a global market when they are competing not only with local competition but with a freelancer living on the other side of the World with less than half the overheads.

Good Practice for Business Owners

Investors, individuals or institutional, look for a number of things when making a decision to lend:

1. Owner – the individual behind the company is the most important, so become a likeable person and professional in your business endeavours. If you arrange a meeting, keep to it, if you need to make a payment do it straight away, if you make a promise, make sure to deliver on it. Your reputation will spread quickly within the business community and amongst your peers. These are the same individuals who could be contacted or approached for lending in future.

2. Accounts – maintain good accounts from the day you start and not when you need a loan. Maintaining accurate books is so important and should not be ignored. Try to use a cloud accounting software that gives you access to real-time management accounts.

3. Processes – create solid workflow in your business, get organised, paperwork goes in files not draws. Keep records well organised, maintain a CRM system if possible.
These are just the basics of any company and without these you will struggle to raise even the smallest loan.

Personal Loans

When borrowing for your small business it may be easier to borrow personally, especially if you are on an employee visa within your own company. Banks and Credit Cards (not recommended) will lend to employees with 3-6 months of salary proof.

The following are links to platforms that would be a good start to personal lending:
• SouqMal: This is a great place to start for personal lending. Applying through SouqMal will help you access hundreds of lenders in the UAE with just one application.
• MyMoneySouq: Another great platform to access hundreds of personal lending options with just one application. Review the lending rates and the terms all online before speaking to anyone.
• Friends & Family: Always the best and cheapest option, hence the reason to be a nice person 😊.

Business Loans

Banks are the last place we recommend for Business Loans, there are many small business friendly options and we analyse some of these below:

1. Friends and family. At the top of the list is friends and family. Consider approaching those who are employed rather than entrepreneurs. People who work have less time to consider creative investment options and usually end of storing their money in savings accounts paying less than 3% per annum. If you can offer them a return of over 5%-10% per annum then you could be a better option for most people who simply work and save.

2. Beehive.ae, consider going to people but through a platform. Beehive is a peer-to-peer lending platform that connects small business owners with investors without the need for a conventional intermediary. Its focus is on finance from AED 100k on repayment terms from 6-36 months. Check it out on www.beehive.ae

3. Eureeca.com, an amazing platform for those wanting to raise more than $200k. Launched in 2013 the team at Eureeca have helped many high growth businesses raise significant amounts. Check them out on www.eureeca.com

4. Dubizzle, What the…? I hear you ask, Dubizzle, Really? Well, Yes. Dubizzle is amazing platform in Dubai and posting in their business section for an investor, with as much detail as possible, does actually work. Just be careful to select the right person.

Although there are many other options I personally believe these are a great place to start, but remember to ensure the following information in place:

1. Access to a good set of accounts. We can help with that www.profitsplus.ae
2. Good processes, softwares, and CRM. Check out Zoho CRM
3. Try to keep the business in the blue by lowering overheads and increasing your fees. Only grow when it is justified.
4. Solid website will also help and a good positive online presence.

Good Luck with your fund raising exercise and do message me if you need any help. If you want to speak to an advisor to help you with VAT, Funding or Accounting then contact me, Ali Afzal, on +971585442030 or email me on [email protected]

Zero-Rated VAT for Companies in the UAE

Zero-rated vat companies based in the UAE should review their original VAT application.

We have many clients who are based in the UAE and deal in zero-rated supplies. The question this creates is whether or not this client should be registered for VAT or not.

Firstly we have had many clients join Profits Tax Consultants where they registered for VAT last year in 2017 assuming they had to be registered or else they would have banking issues. In fact we have even had clients claim they were forced to register by their bank account managers because they had large amounts of money going through their account.

So, what is the right approach?

Well we asked the FTA and this is the reply we got;

‘If you only make zero-rated supplies, you may apply to be excepted from registering for VAT.
You must still complete a VAT registration application, but you should answer “Yes” to the question: “Are you applying for an exception from VAT registration?” (Please refer to the additional instructions provided in the Authorized Signatory section in the application).’

So what does this mean, well firstly if you have a company based in the UAE making zero-rated supplies then you still have to register with the FTA BUT that the Vat application must be done correctly.

To put is into perspective till date every one of our xero-rated clients have made their vat application incorrectly and have not made it clear that they are applying for ‘an exception’.

This causes major problems and as such some of our clients have experienced AED 20,000 penalties as a result of requesting amendments incorrectly. Amendments must be made within 20 days of ‘realising’ the error.

Going forward, please check that your initial vat application was made correctly, we expect the FTA to start asking companies to explain why they are not making AED 2m to AED 6m sales when it was clearly stated on the application.

Note: zero-rated must not be confused with exempt of vat which we will discuss in our next post.

Let Profits Tax Consultants with over 20 years of VAT experience and dealing with UK tax inspectors deal with your VAT matters email us on [email protected]

ABC of Changing your Accountant in Dubai

Recently we had clients approach our firm wanting to know how they can change accountants and if it will cause problems. I therefore decided to write this article to explain the ABC of changing your accountant.

WHEN TO CHANGE ACCOUNTANTS

Have you found yourself asking the following questions;

  • Am I getting value for money – assuming you know the value you want?
  • Does my accountant fully understand my business needs and what the plans are to grow the business in the future.
  • Is the service satisfactory and are returns filed in good order and on time?
  • Could I get better service elsewhere?
  • Has my business outgrown my accountant?
  • Is my business treated like just another number to a large firm of accountants?

Changing your accounting partner is not something that many companies do lightly, but there are some reasons situations that make it inevitable;

  1. When your accountant fails to submit your VAT Return on time, provided you shared all information required. Failure to submit your VAT Return on time incurs AED 1000 penalty. Firms that fail to notify their clients of their VAT deadlines or fail to promptly follow-up are basically not using any form of practice manager or CRM to manage their client base. This will definitely lead to bigger problems in the near future.
  2. When you don’t get management reports regularly or when requested within a reasonable time-frame. Try asking your accountant to provide you the last VAT Report breakdown, or your latest Profit and Loss or Balance Sheet. If the the firm is unable to provide this information, then the same situation can cost AED 10,000 fine when requested by the FTA. We will typically provide ANY of these reports within 24hrs to ANY of our clients.
  3. When you must wait more than 30-60 days to have the last months accounts closed. If they are unable to close your accounts within 7-10 days of receiving all the data, then you know that they are either under staffed, or disorganized and this is a problem waiting to go from bad to worse.
  4. When the accountant is unable to answer technical VAT questions immediately then you must consider that they either lack the knowledge or experience to deal with VAT and this can prove to be costly later down the line. Imagine if they do not understand VAT or lack the experience then the amount of errors that they are accumulating will be very costly to you when the FTA do their investigation.

HOW TO CHANGE ACCOUNTANTS

The process of joining Profits Tax Consultants involves:

  1. Select a changeover date that is going to cause the least disruption in your business. Typically the end of a VAT Return period is ideal.
  2. Ensure all financial responsibilities to your accountant are discharged i.e. all outstanding bills paid.
  3. Inform your current accountant that you are planning to change and they have permission to converse with your new accountant for the purpose of handover of paperwork and information. Of course, if you want to avoid the possible awkward call or email to say you are leaving them, we can draft a letter for you to sign and send it on your behalf.
  4. Your new accountant will write to the outgoing accountant asking for professional clearance along with any relevant paperwork. In this letter, we will ask your old accountant if there is any reason why we cannot take you on as a client. This is a professional formality and does not normally present any problems. The information collected will include previous year’s accounts & tax returns, reconciliations and any bookkeeping work they may have done on your behalf. Your old accountant should provide the information within a “reasonable time” for which there may or may not be a fee. It should not be more than an hour charged.
  5. Before joining us we will usually send our new client application form to capture your personal and company information. A ‘Scope of Works’ sets out the expectations and requirements between the client and the accountant which needs to be agreed and signed. Usually there are standard terms of business and a separate fee letter. Make sure this is signed and returned to us otherwise it is assumed to be agreed after 31 days from the date issue.
  6. After a few weeks, assuming there are no hold ups, all your accounting information should have been transferred and you will be safely on board with us.

CONTACT US

Profits Tax Consultants are happy to meet with people for a no-obligation discussion on what we can offer you & your business, and what you would require from us. Price alone is never the determining factor. Call us on +971585442030 or email on [email protected]

 

 

 

Submitting a VAT correction? This is a must read!

Considering submitting a correction to your previously submitted vat calculations?

If you become aware that a VAT Return that you have submitted previously contains errors that resulted in a calculation of payable tax being less than required by not more than AED 10,000, then you can correct this error in the current VAT Return in which you have discovered the error. Under the “VAT Amount” column, you should only declare the VAT amount of the correction.

If the error has resulted in a calculation of payable tax being less than required by more than AED 10,000, you should make a Voluntary Disclosure. We would urge you to review the FTA publication named Voluntary Disclosure – User Guide https://www.tax.gov.ae/pdf/Voluntary-Disclosure-user-guideEnglish.pdf

To avoid doing this incorrectly contact the experts: Profits Tax Consultants on [email protected]

Profit Margin Tax Scheme [Used Car Sales]

Profit margin tax is a value added tax (VAT) scheme created by the FTA for the benefit of the used goods industry.

The scheme allows VAT to be applied only to the profit portion of the goods sold, provided full VAT has been charged on the goods previously (and not claimed back).

Working Example

Ahmed buys a brand new car from a dealer in Dubai. He pays AED 100,000 plus 5% VAT. Regardless of how he purchases the car i.e full cash or on finance VAT of 5% has been paid on the total value of the car. Now since he is a consumer and not a VAT registered business he will NOT be able to claim the VAT back.

6 months later Ahmed decides to sell the Car to Khaled (a used car dealer) based in Dubai. After agreeing on the price of AED 80,000 Khaled pays Ahmed in cash. Ahmed then sells the car through his showroom for a price of AED 85,000.

Lets calculate his VAT liability

Purchase Price AED 80,000
Selling Price AED 85,000
Profit AED 5,000
VAT Liability (5% of AED 5,000) AED 250

Common Mistakes

  1. Deducting expenses before calculating the Profit; there is no provision in any FTA publications that allows for the deduction of expenses on the used car before calculating the Profit element on which the VAT is applied. Therefore you cannot deduct car polishing, car repairs, and other expenses before calculating the Profit on which VAT is applicable.
  2. Charging Profit Margin Tax to used cars 2017 or earlier; Profit Margin Scheme can only be used for cars where the FULL VAT has been previously applied, therefore since cars previous to 2017 or earlier have not had the full vat applied it is not possible to apply the Profit Margin Scheme to these cars.

NOTE: Profit Margin Tax  can still be applied to cars 2017 or earlier but only if the full vat was applied by a used car dealer in the chain of events.

To learn more about the FTA and read their publications please visit: Ministry of Finance (click here)

Profits Tax Consultants are a British Accounting and Tax Consultancy in Dubai. We look after many used car dealers and offer digital software to help you manage your used car showroom. Contact Ali Afzal on 0585442030 to arrange a free consultation or contact us here (click here)

Cloud Accounting [Xero] v’s Traditional Accounting [Tally]

The Evolution of Cloud Accounting 

In the past few years, we have witnessed the birth and rapid evolution of cloud computing, with more and more traditional services being replaced by their far more efficient, affordable and secure cloud alternatives. Accounting is no different and thanks to the hectic pace technology is moving at, the question is no longer whether you should move to cloud accounting but rather, when.

Problems with traditional accounting software

The drawbacks of traditional accounting software certainly play a role in the shift to cloud accounting. The data in the traditional accounting software system isn’t up to date and neither is the software. What’s more, the software only works on one computer – the data needs to be manually transferred between devices, usually by virtue of USB drives. This presents a myriad of other issues, mostly to do with security and reliability.

Traditional accounting software and services are outdated since they are rooted in the idea that only one person should have access to the data. This means that important people within your business may not have access to the financial and customer details, which impairs productivity and diminishes the level of customer service your organization can provide.

What’s more, traditional accounting software tends to be costly and updates and regular maintenance are expensive (often not included in the initial price), time-consuming and challenging especially if you’re not tech-savvy. Keeping backups is rarely one and even then, it may cost you more time and money than it’s worth.

When it comes to your company’s financial needs, you cannot afford to settle for outdated accounting services that charge you too much while bringing almost no value to the table. What you need is an experienced, qualified and pioneering accounting firm that will handle every single detail, provide you with cutting-edge accounting tools and allow you to focus on your company’s future growth instead of book-keeping.

What is cloud accounting

Cloud accounting is the alternative to traditional accounting software, whether it’s on-premises or self-install. The only difference is that cloud accounting is hosted on remote servers, similar to the Software as Service business model: data is sent to the cloud where it can be processed and returned to the user.

This means that all functions are performed off-site, rather than on your desktop which minimizes issues related to reliability and security. All you need to take advantage of cloud computing is a reliable connection to the Internet or another network via a cloud application service provider. Because of that, cloud accounting is far more flexible than traditional software – the accounting data can be accessed from any point around the world and from any device that has an Internet connection. What’s more, cloud accounting software like the one Profits Tax Consultants use can update your financial information automatically and provide you with real-time financial reporting.

Profits Tax Consultants is a cloud-based accounting firm based in Dubai that will go above and beyond to ensure that your company is provided with CFO-level accounting services and support your company’s growth and expansion. Our state-of-the-art cloud-based software is run by experienced British accountants who have spent more than 20 years of working with British companies and VAT.

Xero Cloud Accounting Software

One of the key players in the shift towards cloud accounting is Xero, a New-Zealand-based software company that develops cloud-based software for small and medium-sized businesses. Their software lets companies share access to the latest business numbers with their teams, accountants and bookkeepers so everyone – including team members around the world – are kept in the loop and up to speed.

This means that you can easily log into any Xero file you want by simply using your Internet connection. You can share access with your accountant who in turn can not only open the file but make adjustments, prepare and lodge BAS and tax returns, and provide real-time assistance if needed. This saves up time and money as the accountant doesn’t necessarily have to send the data back and forth, either digitally or physically.

We at Profits Tax Consultants truly believe Xero has transformed the modern world of accounting. Instead of having a monthly meeting with your accountant where you pile mountains and mountains of paper files, you can easily manage your accounting information in real-time. This helps you make faster and more effective decisions. Unsurprisingly, in the past 12 months alone, Xero has shipped more than 1,2000 features and product updates, most of them designed to provide accountants with back time and helping them migrate to methods of value-priced billing while increasing their workload at the same time.

Profits Tax Consultants is a 100% cloud-based accounting service, which means that you will be able to take advantage of the flexibility, convenience, and practicality of a cloud service based on the Xero Cloud Accounting Software. In addition, we will integrate accounting systems inside your company, offer you book-keeping as well as expense management services that will enable you to monitor your company’s growth, expenses and earnings.

Benefits

In a nutshell, cloud accounting software like Xero enables professionals to save time, and businesses to enjoy greater flexibility, reliability, and security when it comes to financial operations. Xero certified accountants can create a lot of efficiencies going beyond that of manual data entry: using the cloud service, they can finally have time to analyze the work and truly help small businesses remain cash flow-positive.

Some of the benefits associated with using cloud accounting software are increased accessibility, productivity, organizational reporting and improved back-up and recovery. Cloud accounting can improve the productivity within your organization by saving you enough time to focus on actually running your business rather than spending valuable resources on bookkeeping and accounting.

What’s more, a Xero certified accountant can access your accounting and financial information from any point around the world. This makes it the ideal option for businesses that have remote employees or work with accountants from abroad. This also frees you from having to install and maintain software on individual desktop computers (so you can save money on your IT infrastructure and training expenses). With cloud accounting, you can also improve the communication within your business as employees in other departments, branch offices or remote areas can access the same data and version of the software, and make changes if needed.

Xero also makes it easier for you to get real-time reporting and visibility throughout your organization. With cloud computing, subscription-based models are the most popular option – you can pay a subscription to receive updates as soon as they’re launched, without having to invest more money in additional software purchases.

Xero also provides you with better backup and recovery capabilities. Cloud accounting makes storing and recovering data more convenient and reliable than in-house servers. All these benefits also ensure cloud computing is one of the most, if not the most, cost-effective option on the market. If you’re looking for a Dubai accountant, working with someone who is Xero certified can save you a lot of time and expenses in terms of maintenance and management of data and servers.

What the future holds

Given the many benefits cloud accounting offers to small and medium businesses, it’s not surprising that experts believe that cloud accounting will become the new normal. What’s more, Xero and similar software may become even more important and relevant as AI and machine learning grows in popularity.

Since we are a 100% cloud-based firm, we are able to offer you high-value, low-cost accounting services by cutting down on conventional, obsolete and expensive hardware and software and passing those savings on to you and your brand. Our mission is to establish an honest, trusting and lasting relationship by going the extra mile and ensuring your satisfaction. Choosing Profits Tax Consultants means having a whole team of highly-experienced British accountants at your disposal 24/7.

If you’re looking for a Dubai accountant but have not yet made the switch to cloud accounting software, it may be a good idea to put a framework in place as soon as possible. Steadily working towards a plan is the key to enhancing what you already have and prepare for the future – and by the looks of it, the future of accounting is synonymous with cloud accounting.

This whitepaper was written by Ali Afzal, the Managing Director of Profits Tax Consultants and Accountants in Dubai. We provide cloud accounting services starting from AED 850 per month and you can learn more about the software on www.profitsplus.ae/software or visit us Xero on https://www.xero.com/uk/advisors/accountant/2017/profits-tax-consultants/ .

Tally ERP 9 [the ugly truth] by Profits Tax Consultants

Thinking of purchasing Tally ERP 9? Read this article before making that decision.

Just because Tally is an FTA registered software does not make it a good solution nor does it mean that you cannot choose any other software that is not FTA registered.

Disadvantages of Tally ERP 9

1. Not user-friendly at all. I have met many CEO’s and In-House Accountants who contact me soon after setting up Tally ERP 9 and ask me to provide them with our accounting services simply because they realize how complex it is to use Tally ERP 9. Unless you are a qualified accountant or have employee a qualified accountant with at least 2 years’ experience Tally ERP 9 is just not user friendly and thus not appropriate for small businesses with limited resources.

2. Single screen software. Tally ERP 9 does not allow you to work on more than one ledger at a time which makes it difficult to review work whilst making entries into the ledger. This is a very basic function and means that it really slows down the accounting process.

3. Useless paid upgrades. You have to purchase any upgrades and in fact there is little noticeable difference between Tally 4 and Tally 9 but the cost of upgrading is expensive as you require call out from Tally Partners and typically this will cost between AED 1000 and AED 2000 per installation.

4. Not ideal for multi-branch. The only way to operate tally from multi-sites is to use VPN and this is hardly practical today. To make it effective you have to invest in servers and LAN bundled with Tally.net and then don’t forget the consultancy and implementation costs.

5. No flexibility on Chart of Accounts. The default setting button is not provided and if you want to change the setting after configuration settings are done you will have to restart and delete all the ledgers and start again from the beginning. Once you have created the journal voucher it is not possible to make changes in it. This makes Tally 9 very rigid and difficult to use.

6. No central support. Tally 9 is not supported centrally by Tally itself and instead you have to rely on the partner network and the fees charged can vary significantly as well as the level of expertise, not always related.

7. Low Security. Do not lose your password as it is difficult to retrieve data without the password and very time consuming.

8. Loss of data. Since Tally ERP 9 is desktop or server based the risk of losing your data is huge should your machine crash or become infected by a virus.

9. No customization or module integration. It is not possible to custmise Tally 9 or integrate with any other software.

Still thinking of purchasing Tally ERP 9?

I didn’t think so.

As an alternative consider Xero Cloud Accounting Software. We are a xero certified silver partner in Dubai and provide the software free of charge as part of our vat accounting packages: https://profitsplus.ae/our-plans/

Profits Tax Consultants is a tax consultancy and accounting firm based in Dubai and licensed by the DED. We provide fixed fee accounting services to businesses all over Dubai and Sharjah. We provide free VAT compliant cloud-based accounting software and we are the only firm in the UAE to provide real-time accounting services through our unique cloud powered business model. Visit us on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants. Connect with me on Linkedin: https://www.linkedin.com/in/aafzal1/