Just like cryptocurrencies, NFTs seem to be gaining traction as well and their popularity is at an all-time high at the moment. It would only be appropriate to discuss how they are to be taxed. 

What are NFTs? 

An NFT is a unit of data that is stored on a blockchain which is a guarantee that the NFT is unique. This means the token is not interchangeable. NFTs run using the Ethereum Blockchain. Many experts claim that because of NFTs using Ethereum, the BTC crash of late did not particularly affect the trading rates of Ethereum Coin (ETH). Every token is quantifiable evidence of ownership of that specific digital asset. Although being a digital asset, it has been pushed as an asset to take ownership of assets in real life also. 

Types of NFTs 

There are many types of NFTs available on the market, let’s take a look at some of them: 

• Digital art 
• Games 
• Collectables  
• Music 

• Film 

Now that we have an idea about the types of NFTs and their nature, let’s see how they are taxed for individuals and corporations. We will also shed light on VAT rules regarding NFTs as well! 

NFT Tax Treatment for Individuals 

Although there has been little word on how NFTs ought to be taxed globally, there is a consensus to go the cryptocurrency route and how they are taxed. Now, under that assumption, income tax is subjective to whether the GCC (Gulf Cooperation Council) can classify NFTs as a trading activity. 

For CGT (Capital Gains Tax), cryptocurrencies are classed as an intangible asset therefore it is safe to assume that it will be the same case when it comes to NFTs. If that is the case then, if one purchases an NFT with the intent of investment and then afterwards is sold; any gain on the asset after conversion of the sale price and purchase price into the AED rate will be taxed under Capital Gains Tax. 

In contrast, a loss on sale of an NFT can be balanced out against gains from other sources of capital that will be taxed under Capital Gains Tax. 

NFT Tax Treatment Concerning Companies 

For corporations also, the NFTs will be taxed just like cryptocurrencies. Under that assumption, the profits from trade must be calculated using fair practices. Moreover, if a corporation buys an NFT for investment purposes, the value of that NFT must be presented on the Balance Sheet as an intangible asset. Any proceeds from the sale of the NFT asset will be taxed accordingly. 

NFT Tax Treatment Rules per VAT 

It is expected that VAT is duly paid normally on any services and goods sold in exchange for buying an NFT. When the transaction takes place, the value of the goods and services in question will be the AED price value of the NFTs. 

When an international transaction involving the sale of NFTs takes place, it is crucial to track which sales are subject to VAT and vice versa. 

Conclusively, we would like to state that this is just an overview of the most probable tax treatment for NFTs. We hope the GCC gives us more updates shortly. 

For now, if you or your business own cryptocurrencies and need help with VAT accounting or a tax consultant for crypto, head over to ProfitsPlus for all your accounting and taxation needs! 

The topic in question these days may be considered as a controversial one, that is, whether or not business analysts turn out to be good management consultants also. The main reasoning behind the controversy has something to do with the fact that there is no definitive answer to the question. But let’s shed some light and try to get to the bottom of this conundrum.

How do business analysts and management consultants differ?

Although there isn’t a perfect definition per se that can distinguish them as clear as night and day, first we must understand that in the practical world, jobs aren’t fundamentally supposed to abide by said definitions. An oversimplification perhaps but people in both roles are hired to solve a business problem with the pre-set aim of achieving something for the client.

Some people may not think that there is a clear distinction between the two roles. As consultants may also be made to do requirement planning, gathering and documentation. Which are the core functions associated with a business analyst.

Do business analysts make good management consultants?

If one were to describe the role of a business analyst according to a definition, then simply put, a business analyst is associated with IT in more than one way. In contrast, consultants, can potentially also work or perform their job in a non-IT related field of consultation as well. Though the lines which separate these roles are paper-thin, they are differences, nonetheless.

Again, before we rush and jump to any conclusions, it must be noted that this is entirely situational and not always the case. According to the CBAP handbook, consulting experience revolving around IT and tech does not fall under the umbrella of the CBAP experience criteria.

The book outlines what someone in this role is supposed to do.

– “Creating Project Plans and Identifying project risks, Weekly project status reporting, leading design workshops, creating project charter or system architecture, testing execution” etc.

In a way, the handbook forces you to be one-dimensional which isn’t always helpful. One should always try to learn more beyond the role, which can lend a massive hand in shaping a successful career. But CBAP excludes such work experience for good reason though. A major reason could be to differentiate between the PMP and CBAP certifications or any other certification related to the business field.

Fortunately, industry and firms are constantly in search of people with a broad skill set that extends further beyond their role. It is common knowledge that the roles of business analysts and consultants are never one dimensional. A firm would rarely decline a business analyst’s offer, or his wish to take more management responsibility upon their shoulders.

So do business analysts make good management consultants then?

As evident through the job market, business analysts can turn out to be exceptional consultants. Although in certain aspects analysts might have to overstretch to cover the fields of business processes or project management or even change management. If you are seeking to be an exceptional consultant, starting your journey through the business analyst route might be the best option and secret to success.

From a purely contextual point of view, business analysts may differ but in reality, they are sharing responsibilities, in a multitude of ways and different areas as well. Management consultancy can range from the process, strategy, operations, business analysts may fall victim to tunnel vision and limit themselves by only following the guidelines of the handbook.

Conclusively, let us not forget, certifications like CBAP or CMC are credentials that enable you to get a job. The practical experience gained in the field might differ a lot and keeping an open mind towards your opportunities might just do you some good as well.

If you’re a client looking for an accounting firm in Dubai for your consultancy needs and were confused between whether to hire a business analyst or a management consultant. We hope that Profits Plus has helped make your choice much easier, and if you’re still not sure, get in touch with our team. We are proud to provide the best management consultancy services by chartered accountants!

Nobody likes or wants to be deceived, especially by those they place their trust in or have expectations from them to do the right thing. Fraud and corruption can be a massive PR blow for most corporations and enterprises. It can also prove to be detrimental to the self-image of the internal hierarchy and a lapse in confidence in being able to counteract against a fraudulent scheme. The PR blow may lead to a tarnished public image, job destination, organisational morale stooping and losses as well.

But what can businesses, corporations do to deter such schemes? The answer is simple, internal auditing! In recent times, internal audit has increasingly gained ground and companies find it very valuable in its capabilities. In-house internal audit departments or internal audit outsourcing can be used to ensure a check and balance of systems and procedures, risk management, while also providing recommendations to overcome weak areas

The nature of work entails having internal auditing, as well as the sensitive information required, most companies prefer an in-house team that deals with the audit process, rather than outsourcing.

Developing an audit and assurance department is an exercise that should be thoroughly carried out to guarantee the efficiency and acceptability of the department by other stakeholders involved with the company. Often, managers and sometimes the entire workforce of an enterprise may harbour hard feelings for the audit team and under such circumstances, an in-house team might not be best suited.

Although that might only be the case when the auditing team can’t keep its findings or workings under wraps, if the critical information is kept under lock and key while fully implementing recommendations, internal audit can be the tool a company needs to bring in change.

Steps to be taken

How the department is set up and the process in which the team carries its tasks is most important. The following are key steps that can be taken to ensure a successful set up of an internal audit department:

1. Obtain and discuss expectations from the department with senior-level management including the board and audit committee, involving required listing standards for listed companies. Non-listed corporations should consider voluntary compliance.

2. Get the audit committee to develop and approve a charter.

3. Formulate a proper budget and staffing model on how you want to hire. Also, do review what your competitors in the industry are doing while keeping in mind your own company’s policies.

4. Also generate reporting lines and regulations, while also establishing responsibilities of the internal audit department.

5. Find areas in your company that require auditing

6. Make sure to carry out the initial risk assessment with the management and audit committee.

7. Consider the need to comply with various statutory requirements within your environment for instance compliance with Sarbanes-Oxley Act for companies in the USA.

8. Make an internal audit plan which is suited to the risk assessment

9. Outline whether staff for the department will be hired internally, or outsourced

10. Plan and implement audit work required for the audit plan, including a system to examine and follow up on audit recommendations.

11. Keep on updating the risk assessment for varying conditions during the year

12. Always improve and modify the internal audit work-frame to meet changing needs of the company and management alike.

Once the department has been set up, the head of the department should ensure that the objectives of the department are reviewed and evaluated from time to time. Often, the department will be driven by the risk assessment results to develop certain intervention policies on its own. The head of the department can use a risk assessment questionnaire which is distributed to all heads of auditable departments to evaluate their risk exposures in a given time frame.

If you’re a newly established enterprise lacking an internal audit department and are actively searching for internal audit services in Dubai, check our service of Internal Audit.