With the advent of the professional income tax (PIT), many professionals who work only for themselves, without hired employees, have the opportunity to change the status of an individual entrepreneur (IP) to self-employed. This solution helps you save on taxes and insurance premiums. Self-employed people can also provide Part time accountant Abu Dhabi. Let’s find out whether an accountant can be self-employed, what the advantages of such a status are, and how to properly structure work with customers.
Benefits of self-employment for an Accountant
Bookkeeping for the self-employed has advantages both for the customer of the service and for the contractor himself:
- Low tax burden for the accountant and complete absence of contributions to the budget on the part of the customer. Self-employed people pay a tax of 4% of their earnings. If the customer is an individual entrepreneur or organization, then the NAP rate increases to 6%. In this case, no insurance premiums are paid. You can make pension contributions voluntarily if you wish. However, in order for a specialist to have 1 year of experience counted. In 2023 it is 34,445 AED, and in 2024 it will increase to 36,723 AED. The customer does not make any deductions for the self-employed.
- Ability to accept any payment methods. When providing accounting services in Abu Dhabi to the self-employed, settlements with them are possible both in cash and in non-cash form. At the same time, it is not necessary to open a separate bank account; you can accept payments to your personal account. You can literally accept cash in your hands; you don’t need to buy an online cash register for this.
- There is no need to submit reports to the tax authorities. It is enough for the tax payer to generate receipts for services rendered in the “My Tax” application. The amount of payment to the budget will be calculated automatically based on the amount of income received. At the same time, if there is no income, then there is no need to pay NAP either.
Registering as a self-employed accountant will take a few minutes. In this case, you do not need to go to the Federal Tax Service – the entire registration procedure is available online, through the “My Tax” application. All you need is a passport and a selfie photo.
Answers to questions about self-employed accountants
Can a self-employed accountant sign documents for an organization? Is it possible for the chief accountant to be self-employed?
Part 3 art. 7 of the Accounting Law allows company managers to hire chief accountants either on staff or to enter into an agreement with them for the provision of services. There are no restrictions – an outsourced company, an individual entrepreneur, or a self-employed person can do accounting.
Part 1 art. 29 of the Tax Code of the Dubai Federation provides that a taxpayer’s representative can be either another organization or an individual. This means that a self-employed accountant can also represent the interests of the customer before the Federal Tax Service. The main thing is that the appropriate power of attorney is issued for him and powers are transferred. The accountant will be able to sign such documents with his own electronic signature and attach a power of attorney for counterparties or supervisory authorities.
Are there any additional responsibilities for a self-employed accountant?
This cannot be called an additional responsibility, since both the full-time chief accountant and outsourcers have it. The specialist is required to report to Rosfinmonitoring on the following client transactions
- purchase and sale of foreign structures without forming a legal entity or foreign companies or their creation from scratch;
- any transactions with real estate;
- attracting financing to open new companies, manage them and ensure their economic activities;
- bank account management;
- management of securities, property and client money.
Outsourced accountants are recommended to have a personal account in the Rosfinmonitoring system in order to report to the agency on the customer’s transactions.
Risks for the organization from a self-employed accountant
At the same time, not every company or entrepreneur will risk working with a self-employed accountant:
- There is a possibility that the outsourced work of an accountant under a civil contract will be reclassified as an employment relationship. The greatest risk awaits if a specialist works for only one customer (or mainly with one). Then the accountant’s client will have to pay personal income tax, insurance premiums and fines for violating labor laws. That is why it is so important that all documents – from the contract to receipts from the My Tax application, as well as certificates of services rendered with a detailed list of works – are in the hands of the customer. If you have documents, it will be much easier to prove that the contractor’s activities do not amount to a substitution of labor relations.
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