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UAE audit, VAT, and Corporate Tax requirements are continually evolving. The FAQs below outline key compliance considerations to help businesses understand their obligations and manage regulatory risk effectively.

FAQ

UAE Audit Requirements
VAT Compliance
Corporate Tax Compliance
UAE Audit Requirements

Is an audit mandatory for UAE companies?

Audit requirements depend on the company’s legal form, MOA, and licensing authority. Under UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021), companies must maintain proper accounting records and appoint auditors where required by law or regulators.

Which businesses usually require an audit?

Audits are commonly required for mainland LLCs, free zone companies, branches of foreign companies, and entities with banking or shareholder reporting obligations.

Who can conduct a statutory audit in the UAE?

Only auditors licensed by the UAE Ministry of Economy, and where applicable approved by the relevant free zone authority.

What standards are used for audits?

Financial statements are prepared in accordance with IFRS and audited under International Standards on Auditing (ISA).

When must audited financial statements be submitted?

Typically within 3–6 months after the financial year-end, depending on the licensing authority or free zone requirements.

Are audited accounts required for Corporate Tax or VAT?

Audited financial statements are not mandatory for all taxpayers, but may be required under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and are commonly requested during FTA audits or VAT refund claims.

VAT Compliance

Who is required to register for VAT in the UAE?

Businesses must register for VAT if taxable supplies exceed AED 375,000 in a 12-month period. Voluntary registration is available from AED 187,500, in accordance with UAE VAT Law (Federal Decree-Law No. 8 of 2017).

Do businesses need to maintain accounting records even if not VAT registered?

Yes. Under UAE Commercial Companies Law and VAT regulations, all businesses must maintain proper accounting and bookkeeping records, regardless of VAT registration status. This is necessary to monitor thresholds, support deregistration, and meet regulatory requirements.

When is VAT deregistration required?

A business must apply for VAT deregistration if it ceases making taxable supplies or if its taxable turnover falls below the mandatory registration threshold, subject to FTA conditions. Deregistration applications must be submitted within the timeframe prescribed by the FTA.

What is the VAT rate in the UAE?

The standard VAT rate is 5%. Certain supplies may be zero-rated or exempt, depending on the nature of the transaction and compliance with VAT regulations.

What are the penalties for VAT non-compliance?

Penalties may apply for Late VAT registration or deregistration, Failure to submit VAT returns on time, Late payment of VAT due, Incorrect VAT filings or understatements, Failure to maintain proper accounting and VAT records. Penalties are imposed in accordance with UAE VAT and tax procedures legislation.

When must VAT returns be filed?

VAT returns are usually filed quarterly, although some businesses may be assigned monthly filing periods by the Federal Tax Authority (FTA).

Are VAT audits conducted by the FTA?

Yes. The FTA may conduct VAT audits at any time and requires businesses to retain VAT and accounting records for at least 5 years (longer in specific cases such as real estate).

Corporate Tax Compliance

Who is required to register for Corporate Tax in the UAE?

All UAE resident companies, branches of foreign companies, and other taxable persons are required to register with the Federal Tax Authority (FTA) under UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022). This includes dormant or non-trading companies, which are still required to register and file Corporate Tax returns.

When must a business register or deregister for Corporate Tax?

Businesses must register and apply for deregistration within the timelines prescribed by the FTA. Deregistration is required where a business ceases operations or no longer qualifies as a taxable person, and a final Corporate Tax return must be filed.

Do businesses need bookkeeping even if there is no taxable income?

Yes. All businesses, including dormant companies, are required to maintain proper accounting and bookkeeping records, regardless of taxable income, in accordance with UAE Commercial Companies Law and Corporate Tax Law.

When must a business register or deregister for Corporate Tax?

Generally, expenses incurred wholly and exclusively for business purposes are deductible. Certain expenses may be restricted or disallowed, including non-business expenses, specific entertainment costs, and items not supported by proper documentation, as prescribed under Corporate Tax regulations.

When must a business register or deregister for Corporate Tax?

  • 0% on taxable income up to AED 375,000

  • 9% on taxable income exceeding AED 375,000
    Special rules apply to qualifying free zone entities and exempt persons.

What are the key Corporate Tax deadlines, documentation, and penalties?

Generally, expenses incurred wholly and exclusively for business purposes are deductible. Certain expenses may be restricted or disallowed, including non-business expenses, specific entertainment costs, and items not supported by proper documentation, as prescribed under Corporate Tax regulations.

Disclaimer:
The information provided above is for general guidance only and does not constitute legal, tax, or professional advice. Compliance requirements may vary based on the company’s legal structure, licensing authority, and applicable regulations. Professional advice should be sought before taking any action.