KKC Management Consultants LLC

🦚 Celebrating the Divine Spirit of Janmashtami 🦚

Janmashtami reminds us of the timeless wisdom of Lord Krishna - to act with purpose, remain steadfast in challenging times, lead with compassion and always uphold righteousness.

His teachings inspire us to look beyond immediate challenges, embrace every opportunity with courage and move forward with wisdom, integrity and resilience.

May the divine blessings of Lord Krishna bring peace to your heart, happiness to your home, prosperity to your life and success in all your endeavours.

On this auspicious occasion, KKC Management Consultants LLC wishes our clients, partners, colleagues and the wider community a joyous, peaceful and blessed Janmashtami.

Celebrating the Spirit of Onam 🌼

May the vibrant spirit of Onam bring joy, prosperity, peace, and new beginnings to you and your loved ones.

Onam reminds us of the values that truly matter - unity, gratitude, togetherness and abundance. As we celebrate this beautiful festival, may its spirit inspire us to build stronger relationships, embrace new opportunities and grow together.

KKC UAE wishes you and your family, a Happy & Prosperous Onam!

DubaiBusiness

🔍 KKC UAE Insight Pulse - Friday Trivia #33

The FTA has issued FTA Decision No. 13 of 2026, introducing mandatory verification measures that taxpayers must perform before claiming Input VAT recovery. The Decision comes into effect from 1 October 2026 and represents one of the most significant shifts in UAE VAT compliance since the introduction of VAT.

What's changing?
Historically, many businesses focused on ensuring they held:
- A valid Tax Invoice
- Proof of payment
- Evidence of receipt of goods or services

Under the new Decision, taxpayers must go further. The FTA now expects businesses to actively verify the supplier, the supply and the surrounding commercial circumstances before recovering Input VAT.

Supplier Verification Requirements
- Supplier identity and incorporation details
- Authorized representatives
- Actual place of business
- Commercial activity consistency
- Bank account existence (for larger transactions)
- Publicly available supplier information and risk indicators

Supply Verification Requirements
- The transaction has genuine commercial substance
- Pricing and margins are commercially reasonable
- Goods originate from legitimate sources
- The supplier has the right to sell those goods
- Payment arrangements make commercial sense
- The supplier's role is justified where intermediaries are involved

Practical repercussions for Businesses
From an operational perspective, businesses may need to:
- Strengthen vendor onboarding processes
- Introduce supplier verification controls
- Update procurement policies
- Maintain verification records and audit trails
- Assign formal ownership of VAT verification procedures
Failure to demonstrate appropriate checks may potentially put Input VAT recovery at risk during an FTA review.

Link to FTA decision - https://lnkd.in/g2CqVcue

💡 Insight Pulse Takeaway
FTA Decision No. 13 of 2026 signals a fundamental shift towards enhanced tax governance and commercial due diligence. The emphasis is no longer solely on documentation, but on demonstrating that VAT recovery is supported by genuine and verifiable business activity. Businesses that integrate these controls into procurement, finance and vendor management processes early will be better positioned to protect their VAT recovery profile and withstand future audit scrutiny.

Every VAT-registered business should review its vendor onboarding and procurement controls before 1 October 2026. The strongest VAT position will no longer be built only on invoices and payments. It will be built on evidence that reasonable verification was performed before the Input VAT claim was made.

Today, we celebrate the spirit of freedom, unity, and progress that continues to shape India's remarkable journey.

As we commemorate this special day, we extend our heartfelt wishes to the Indian community in the UAE and around the world.

May the values of perseverance, innovation, and excellence continue to inspire future generations and strengthen the bonds that connect people across borders.

Happy Independence Day, India. Jai Hind! 🇮🇳

🔍 KKC UAE Insight Pulse - Friday Trivia #32

The FTA has issued CTP012 – Corporate Tax treatment of payments made in respect of Additional Tier 1 (AT1) Instruments by banks, providing long-awaited clarity on the deductibility of payments made on regulatory capital instruments.

What has been clarified?
Banks often issue AT1 Instruments as part of their regulatory capital framework under Basel III and applicable banking regulations. These instruments are commonly classified as equity for accounting purposes and may carry discretionary dividend or coupon payments.

The FTA has now confirmed that where payments on AT1 Instruments are not included in Accounting Income, they are not deductible for Corporate Tax purposes.

The clarification is driven by a fundamental Corporate Tax principle: Taxable Income starts from Accounting Income prepared under IFRS, subject only to specific adjustments prescribed by law.

⚠️ Why does this matter?
For banks and regulated financial institutions, the clarification provides certainty on the interaction between:
- Regulatory capital requirements
- IFRS classification of AT1 instruments
- Corporate Tax deductibility of related payments

📄 Link to the clarification - https://lnkd.in/dXswiYZP

💡 Insight Pulse Takeaway
Rather than introducing a new restriction, the FTA has clarified how existing Corporate Tax rules interact with regulatory capital instruments commonly used by banks. The publication reduces uncertainty for financial institutions, enhances consistency between accounting and tax reporting, and provides greater predictability when assessing the tax implications of capital management and funding structures.

Banks and financial institutions should revisit the accounting classification of AT1 instruments and assess whether existing Corporate Tax positions are fully aligned with the principles confirmed in the clarification. Where capital instruments are a significant component of regulatory funding, early evaluation can help avoid unexpected tax adjustments and strengthen filing certainty.

🔍 KKC UAE Insight Pulse - Friday Trivia #31

The UAE has issued Ministerial Decision No. 131 of 2026, extending the availability of Small Business Relief (SBR) for eligible taxpayers.

Under the previous framework, the Small Business relief was available to taxable persons whose revenue was below AED 3 million upto tax periods ending on or before 31 December 2026.

The latest amendment now extends this relief for all eligible tax periods ending on or before 31 December 2029.

🔍 Why is this important?
For eligible resident taxable persons whose revenue does not exceed AED 3 million, the SBR election continues to provide a simplified Corporate Tax position by treating the taxpayer as having no taxable income for the relevant tax period.

⚠️ A common misconception
Many businesses assume that because they qualify for Small Business Relief, their compliance obligations disappear. They do not.

Eligible taxpayers must still:
- Register for Corporate Tax where required
- File Corporate Tax Returns
- Maintain supporting records
- Continue to monitor the AED 3 million revenue threshold

The relief reduces the tax burden - not the obligation to remain compliant.

💡 Insight Pulse Takeaway
It is a clear signal of the UAE's continued commitment to supporting entrepreneurship, start-ups, family-owned businesses and the broader SME ecosystem. By extending the AED 3 million threshold through 2029, the government has provided taxpayers with longer-term certainty and removed a potential compliance pressure point that many growing businesses were preparing for. At a time when businesses are still adapting to the UAE Corporate Tax regime, this measure reinforces a taxpayer-friendly approach that balances compliance with practicality. For many SMEs, the most valuable benefit is not merely the tax relief itself, but the additional time and certainty to focus on growth, investment and operational resilience while remaining within a simplified tax framework.

If your business revenue is approaching the AED 3 million threshold, now is the time to reassess your Corporate Tax strategy, forecasting models and future eligibility for Small Business Relief.

The extension provides welcome relief but it also creates an opportunity to plan ahead rather than react later.

♟️ Smart businesses don't wait for deadlines. They stay several moves ahead.

Corporate Tax compliance is not a last-minute game. The most successful businesses prepare early, review their records in advance and file with confidence.

If your business has a tax period ending 31 December 2025, now is the right time to start preparing your Corporate Tax Return.

✅ Avoid last-minute pressure
✅ Resolve issues before filing
✅ Ensure accurate reporting
✅ Stay compliant with confidence
✅ Benefit from expert guidance throughout the process

Think strategically. Plan early. File seamlessly.

Let KKC UAE handle the complexities while you focus on growing your business.

📢 Corporate Tax compliance should never be a last-minute exercise.

If your business has a tax period ending on 31 December 2025, now is the ideal time to begin preparing your Corporate Tax Return.

Early preparation can help you:

✅ Avoid deadline pressure
✅ Address issues before filing
✅ Ensure accurate reporting
✅ Streamline documentation
✅ File with confidence

At KKC UAE, our experienced tax professionals support businesses through every stage of the Corporate Tax Return process, from review and preparation to final filing.

📞 Contact KKC UAE today and make tax compliance simple, organised, and stress-free.

📢 Don't wait until the last minute to file your Corporate Tax Return.

Businesses with a tax period ending 31 December 2025 should start preparing now to ensure a smooth and hassle-free filing process.

Early preparation helps you:
✅ Avoid deadline pressure
✅ Identify and resolve issues early
✅ Ensure accurate reporting
✅ Stay compliant with confidence

At KKC UAE, our tax specialists can support you through every stage of the Corporate Tax Return filing process.

📞 Book your Corporate Tax review today and stay one step ahead.