A Complete Guide to E-commerce Accounting in the UAE -AM Audit | Audit Accounting Firm in Dubai
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2022/07/19

A Complete Guide to E-commerce Accounting in the UAE

The sustenance of your business depends on how financially aware you are. To determine this,
you have to keep track of your financial transactions; simply put; you have to account.
E-commerce is the new form of commerce and a response to how much people have grown with
technology. E-commerce is using the internet as a medium for buying and selling.
Recently, there has been an explosion in e-commerce, and the pandemic played a role in that.
Safety measures required people to evolve and invest in other means of selling and buying. Like
every other business in the UAE, accounting essentials remain the same for e-commerce. So,
sellers must abide by these accounting requirements.

However, some challenges are involved, so AM Audits have written this guide to E-commerce
accounting in the UAE. This is necessary, so you won’t offend the mandatory requirements of
maintaining books of account in the UAE

What is E-commerce Accounting?

E-commerce is not a fad that will pass away. People have discovered the comfort of getting
products or services over the phone or any other device. This alternative to traditional
commerce has shown an upward trend, with a whopping sum of $4.2 trillion being the total
amount made with e-commerce in 2021.

E-commerce accounting is the collection, analysis, and reporting of the financial transactions
relating to your e-commerce business. Also, it includes abiding by the relevant financial
compliance regulations which the government set. The information you obtain from this
e-commerce accounting process is crucial to the sustenance and planning of your business.
Without e-commerce accounting, you might not be able to get a clearer picture of the position of
your business. In addition, you will be offending UAE laws.

What Makes E-commerce Challenging in the UAE?

As we have mentioned earlier, as it is compulsory for physical stores, e-commerce stores must
also maintain books of accounts. With physical stores, customers come in and purchase
products or services. So, maintaining books of account looks easier as you receive the cash
directly and can put a face to said cash.
For e-commerce, the situation is tricky simply because when customers purchase your products
or services online, the money comes in through different payment channels. For sellers, this can

be confusing, and when confusion arises, keeping the mandatory book of accounts that the
UAE requires become difficult. This is one of the reasons you need AM-Audit. AM Audits has
experts that help manage finances.
Despite the difficulty in tracking where the money comes in, UAE’s requirements are
unequivocal. As an e-commerce store owner, you must abide by it. You still have to gather,
organize and analyse financial data.

Getting Financial Data

Again, we reemphasize the need for a professional as keeping inventory which forms part of
financial data, is tricky. The inventory issue adds to the existing problem of tracking the money
entering your business via different channels. The inventory issue arises from tracking which of
your stores ‘sold’ the product as your products could be shipped from different stores.

E-commerce Transaction and the VAT

UAE requires that goods sold domestically or domestic sales have a 5% VAT on them. This
looks simple, doesn’t it? Sadly it isn’t as due to the nature of e-commerce, the seller doesn’t sell
all the goods locally. There are some there the seller sells to people in other countries. The
challenge for the merchant is to determine which of their products sold does the 5% VAT apply
to.

How AM-Audit Will Help

AM-Audit has experts who will help you keep inventory, maintain your books, and organize the products you have to pay the 5% VAT. These seasoned professionals have outstanding professional qualifications, have been in the finance industry for quite a while, and understand finances to its core.

Don’t have problems with UAE Authorities. Book AM-Audit now to keep your e-commerce business afloat.

Expert Team

  • Ali Chamas

  • Audit Manager
  • Adel Farag

  • Taxation Manager
  • Farah

  • Accounting and tax Associate
  • Sohaib Basharat

  • Financial Auditor & Tax Manager

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