Shuraa Tax Blog

Author: Ritish Sharma

  • Payroll Process in UAE for Businesses

    Payroll Process in UAE for Businesses

    Payroll is an essential function for businesses around the world, including those in the UAE. It involves the calculation and distribution of employee salaries, taxes, and other benefits. Ensuring an accurate and timely payroll process in UAE is crucial for maintaining employee satisfaction and compliance with labor regulations.

    The payroll process in the UAE holds even more significance due to the Wage Protection System (WPS) implemented by the government. The WPS is designed to protect the rights of employees by ensuring that their salaries are paid on time and in full. This system has streamlined the payroll process for businesses in the UAE, making it easier to track and monitor payments to employees.

    Let’s understand deeper into the payroll process in the UAE, the importance of compliance with the WPS, and key considerations for businesses operating in UAE.

    Key Elements of Payroll in the UAE

    Payroll in the UAE refers to the system used by companies to pay their employees. It involves calculating and distributing salaries and benefits while adhering to UAE labor laws and regulations.

    Here’s a breakdown of the key components:

    • Employee Gross Salary: The total amount paid to the employee before deductions.
    • Employee Deductions: These can include taxes (social security contributions for most employees), insurance premiums, and any other agreed-upon deductions.
    • Net Salary: The amount remaining after all deductions are subtracted from the gross salary.
    • Benefits: These can include health insurance, allowances (housing, transportation), and paid leave.

    Legal Framework:

    The UAE has a strict legal framework governing payroll, including:

    • UAE Labor Law: This law sets out the basic rights and obligations of employers and employees regarding salaries, benefits, working hours, overtime, and leave.
    • Wage Protection System (WPS): This government initiative ensures timely salary payments and mandates electronic salary transfers through the WPS system.

    Employee Rights & Employer Obligations:

    Employees have the right to:

    • Receive their salaries on time and in accordance with their employment contracts.
    • Be informed about all deductions from their salary.
    • Receive benefits as outlined in their contracts. 

    Employers are obligated to:

    • Comply with the Wage Protection System (WPS) for timely salary payments.
    • Maintain accurate employee records and salary information files.
    • Withhold and remit social security contributions.
    • Provide mandated benefits as per the law and employment contracts. 

    Wages Protection System (WPS)

    The WPS is an electronic salary transfer system designed to safeguard employee rights in the UAE. WPS ensures timely and accurate salary payments to employees in the UAE. It minimizes disputes and protects workers from unfair practices like delayed wages or incorrect amounts.

    All companies registered with the Ministry of Human Resources and Emiratization (MOHRE) must use WPS for salary payments. Salaries must be paid through WPS according to the agreed-upon schedule in the employment contract. Employers must submit electronic Salary Information Files (SIF) to MOHRE for approval before transferring wages.

    How to register for WPS in the UAE?

    1. Companies need to register with a WPS service provider (approved bank or financial institution).
    2. The service provider will guide you through the online registration process on the MOHRE website.
    3. Companies need to provide business and employee information.
    4. Once approved, companies can start using WPS for salary transfers.

    The Step-by-Step Payroll Process in UAE

    Managing payroll in the UAE involves following specific steps to ensure accurate and timely payments to your employees, while complying with local regulations.

    1. Setting Up Your Payroll System

    The first step is choosing how you’ll manage your payroll. Here are the main options:

    In-House Payroll: This involves handling payroll calculations and submissions yourself using spreadsheets or accounting software. It’s suitable for smaller businesses with few employees but can be time-consuming and prone to errors.

    Outsourced Payroll: Partnering with a professional payroll service provider takes the burden off your shoulders. They handle calculations, filings, and ensure compliance. This option is ideal for businesses with a larger workforce or complex payroll needs.

    Payroll Software: Cloud-based payroll software offers a user-friendly interface for managing payroll in-house. It automates calculations, deductions, and WPS filings, reducing manual work and the risk of errors.

    2. Employee Onboarding and Data Collection

    During employee onboarding, gather accurate and complete information for payroll purposes. This typically includes:

    • Basic employee details (name, nationality, ID number)
    • Bank account information for salary transfers (important for WPS)
    • Contractual details (base salary, allowances, benefits)
    • Tax information (if applicable)
    • Emergency contact details

    3. Calculating Employee Earnings

    This step involves determining the total amount each employee gets paid. Here’s a breakdown:

    Gross Salary: This is the base salary as agreed upon in the employment contract.

    Overtime Pay: If employees work beyond the standard working hours (typically 48 hours per week), they are entitled to overtime pay, which is usually calculated at a higher rate (often 1.5 times the base rate).

    Allowances: Many companies in the UAE offer allowances to cover employee expenses, such as housing, transportation, or communication. These allowances are added to the gross salary.

    4. Understanding and Applying Deductions

    Before finalizing the net pay, certain deductions need to be applied:

    Mandatory Deductions:

    • Social Security: A small percentage of an employee’s salary is deducted for social security contributions.
    • Tax (if applicable): While there is no personal income tax in most of the UAE, some employees in specific industries or free zones may be subject to income tax.

    Optional Deductions:

    • Employee contributions to health insurance plans (if offered)
    • Salary advances or loans provided to employees

    5. Payslips and Salary Statements

    Payslips are essential documents provided to employees, detailing their earnings and deductions for each pay period. A payslip typically includes:

    • Employee information (name, ID)
    • Gross salary, allowances, and overtime pay
    • Breakdown of deductions
    • Net salary (amount paid to the employee)

    Salary statements might be more comprehensive, containing additional information like leave records and year-to-date earnings.

    6. WPS Reporting and Salary Payment

    The Wage Protection System (WPS) is a mandatory electronic system for paying salaries in the UAE. Here’s how it works:

    • WPS Registration: Register your company with the Ministry of Human Resources and Emiratization (MOHRE).
    • WPS Salary Transfer File: Prepare a WPS file containing employee salary details for each pay cycle.
    • Salary Payment: Submit the WPS file and transfer salaries electronically to employees’ bank accounts linked to the WPS system.

    7. Maintaining Payroll Records

    Keeping accurate and up-to-date payroll records is crucial for audits and employee reference purposes. Maintain records such as: 

    • Employee attendance records
    • Timesheets (if applicable)
    • Payslips and salary statements
    • Payroll reports
    • Documentation for deductions

    Some free zones in the UAE may have slightly different payroll regulations. Specific details and requirements might vary depending on your company size, industry, and location within the UAE.

    We always recommended to consult with experts at Shuraa Tax who can provide you professional guidance or accounting services to ensure compliance with local regulations.

    UAE Employment Law

    Federal Decree-Law No. 33 of 2021 is the primary legislation governing employment relationships in the private sector. It is a comprehensive set of regulations governing the relationship between employers and employees in the private sector. It outlines the rights and obligations of both parties to ensure fair and balanced working conditions.

    Here are some key aspects of UAE employment law regarding leaves, working weeks, and minimum wage:

    Leaves:

    • Annual Leave: Employees are entitled to at least 30 calendar days of paid annual leave per year. This leave can be accumulated for a maximum of two years.
    • Sick Leave: Employees are entitled to paid sick leave for a short period (typically 15 days) based on a medical certificate. Longer sick leave may require additional approvals.
    • Maternity Leave: Female employees are entitled to paid maternity leave for a minimum of 60 days (45 days full pay, 15 days half pay). Additional unpaid leave can be granted under certain circumstances.
    • Paternity Leave: Fathers are entitled to 5 days of paid paternity leave. 
    • Compassionate Leave: Employees may be granted paid leave for emergencies or the death of a close family member (duration typically depends on the company’s policy).
    • Other Leaves: UAE Labor Law also provides for unpaid leave for specific reasons like Hajj pilgrimage or national service.

    Working Week:

    • The standard working week in the UAE is 48 hours, distributed over a maximum of six days.
    • Fridays are no longer mandatory rest days. Employers must provide at least one rest day per week, which can be any day of the week.
    • Maximum working hours per day are eight hours, with a possibility of overtime up to two hours per day, subject to regulations.

    There is currently no federally mandated minimum wage in the UAE. However, some emirates have implemented their own minimum wage requirements. For example, Dubai has a minimum wage for specific sectors like cleaning and security.

    Get Expert Assistance!

    Managing payroll process in the UAE can be complicated, but it’s crucial to get it right. Key points to remember including understanding the local labour laws, accurately calculating wages and deductions, ensuring timely salary payments through the Wages Protection System (WPS), and keeping detailed records for compliance.

    To make things easier and avoid mistakes, it’s always good to get professional help. At Shuraa Tax, our team of experts is ready to handle all your tax and accounting needs to make sure your business follows all the local rules & regulations.

    Our tax consultants in Dubai can review your current finances and help plan your taxes and bookkeeping. Let Shuraa Tax take care of your business legalities, so you can focus on running your business. Get in touch today at +971508912062 or info@shuraatax.com.

    Frequently Asked Questions

    1. Is there payroll tax in the UAE?

    There is generally no personal income tax for employees in the UAE. However, UAE nationals are required to contribute to social security programs like the General Pension and Social Security Authority (GPSSA) or the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF).

    2. What is the Wage Protection System (WPS) and how does it work?

    The WPS is a mandatory electronic system for paying salaries in the UAE. It ensures timely and secure salary transfers directly to employees’ bank accounts linked to the system. Businesses need to register with MOHRE and submit WPS salary transfer files for each pay cycle.

    3. Is there a minimum wage requirement in the UAE?

    There is currently no federally mandated minimum wage in the UAE. However, some emirates have implemented their own minimum wage requirements for specific sectors.

    4. What documents do I need to keep for payroll records in the UAE?

    Here are some essential documents to maintain for UAE payroll records:

    • Employee contracts
    • Timesheets (tracking attendance and overtime)
    • Payslips and salary statements
    • WPS submission records
    • Tax documents (if applicable)
  • ESR Notification and Reporting in UAE

    ESR Notification and Reporting in UAE

    In recent years, the UAE has implemented Economic Substance Regulations (ESR) to ensure that businesses operating in the country are conducting genuine economic activities. These regulations are aimed at preventing harmful tax practices and ensuring that businesses have a substantial presence in the UAE.

    Compliance with ESR is crucial for businesses operating in the UAE to avoid penalties and ensure transparency in their operations. Failure to comply with ESR can result in fines, suspension of licenses, or even the deregistration of the company. By understanding and adhering to ESR requirements, businesses can maintain their legal status and reputation in the UAE market.

    Therefore, we will guide you to understand ESR notification and reporting requirements. We’ll break down who needs to comply, what information needs to be submitted, and the deadlines involved.

    What is ESR (Economic Substance Regulations) in UAE?

    UAE implemented Economic Substance Regulations (ESR) to ensure businesses operating there have real economic activity. The ESR applies to companies registered in the UAE, including those in free zones, that conduct any of the designated “relevant activities.”

    ESR aims to prevent businesses from setting up shop in the UAE just to take advantage of its tax benefits without any substantial economic presence.

    Who Needs to Comply with ESR?

    Any business operating in the UAE that conducts any of the following “Relevant Activities” needs to comply with ESR:

    • Banking
    • Insurance
    • Lease-Finance
    • Investment Funds Management
    • Headquarters Activities
    • Shipping
    • Holding Companies

    There are also exemptions for certain types of businesses, so it’s important to check if your specific company falls under the ESR requirements.

    Companies engaged in these activities are required to submit an annual Notification to the authorities, including details about their activities.

    What is ESR Notification?

    An ESR Notification in the UAE is the first step for businesses complying with the Economic Substance Regulations (ESR). It’s essentially an initial form submitted to the authorities informing them of your activities.

    Purpose of the Notification:

    Informs Authorities: The notification acts as a flag to the UAE Ministry of Finance that you exist and are potentially engaged in relevant activities.

    Provides Basic Information: The notification allows you to submit preliminary details about your business operations, including the nature of your activities.

    Who Needs to Submit ESR Notifications?

    1. Relevant Activities

    Any UAE-based business, including those in free zones, that conducts one or more of the ESR-defined Relevant Activities is required to submit a notification. (These activities include banking, insurance, shipping, etc.)

    2. Regardless of Income

    Even if your Relevant Activity hasn’t generated income during a financial period, you still need to submit a notification.

    3. Exempt Entities

    There might be exemptions for specific circumstances or license types. It’s advisable to consult the official ESR guidance or a qualified professional for confirmation if you believe your case might be exempt.

    Information Required in the ESR Notification

    The ESR Notification in the UAE requires you to submit some basic information about your company and its activities. Here’s a general outline:

    1. Company Details:

    • Company Name and Commercial Registration Number
    • Legal Structure (e.g., Limited Liability Company)
    • Registered Address in the UAE
    • Contact Information (email and phone number)

    2. Financial Year

    This specifies the period covered by the notification.

    3. Relevant Activities

    You’ll need to identify which Relevant Activities (as defined by the ESR) your company undertakes. These can include banking, insurance, investment fund management, and others.

    4. Exemption Claim (if applicable)

    If your company believes it qualifies for an exemption from filing an Economic Substance Report, you can indicate that here. However, you still need to submit a Notification even if claiming exemption.

    Deadlines for submitting the ESR notification

    The ESR Notification needs to be submitted electronically on the Ministry of Finance (MoF) ESR portal. There’s no specific deadline mentioned, but it’s generally 6 months from financial year-end.

    It is recommended to file it as soon as possible after the end of your company’s financial year. This ensures you’re compliant and avoids any potential delays.

    What is ESR Reporting? What to Expect

    ESR reporting and notification are two separate steps in the UAE’s ESR process. ESR is a more detailed process that involves filing a full report demonstrating your company’s economic substance in the UAE. It goes beyond simply stating your activities.

    You’ll need to provide evidence that you have adequate employees, qualified personnel, physical office space, and incur expenses in the UAE to support the Relevant Activities you claim.

    ESR reporting is only mandatory for companies that generate income from their Relevant Activities.

    So, if your company falls under both these categories (Relevant Activity + Income), then you’ll need to file a full ESR report, along with the initial notification. Companies with no income from Relevant Activities still need to submit a Notification, but not a full report. 

    Economic Substance Test

    This is the core concept behind ESR reporting. It essentially assesses if your company has real economic value in the UAE and isn’t just using it as a shell for tax purposes. The report should demonstrate you’re conducting genuine business activities in the UAE, not just artificially shifting profits there. 

    Deadline for submitting an ESR report in the UAE 

    The deadline for submitting an ESR report in the UAE is within 12 months from the end of your company’s financial year. 

    Content of the ESR Report (Demonstrating Economic Substance) 

    The ESR report goes beyond just listing your activities. It’s your chance to prove you have a genuine business presence in the UAE for the Relevant Activities you undertake.  

    Here are some potential elements the report might require:

    1. Details of qualified personnel

    This demonstrates you have dedicated employees in the UAE managing the Relevant Activities.

    2. Physical office space

    Evidence of a physical office in the UAE where the activities are conducted is crucial. 

    3. Operating expenditure

    Demonstrating you incur expenses in the UAE related to the Relevant Activities.

    4. Nature and value of your core functions

    Explaining the specific activities performed in the UAE and their value creation.

    5. Details of any outsourced activities

    If you outsource part of the Relevant Activities, information about the service providers is needed.

    Shuraa Tax Guides Your Way 

    Ensuring compliance with ESR regulations in the UAE is crucial for businesses to avoid penalties and maintain good standing with authorities. It is essential to stay updated on ESR notification and reporting requirements to avoid any legal issues. For complex ESR matters, it is advisable to seek professional help from experts like Shuraa Tax. 

    At Shuraa Tax, our team of experienced accountants, auditors, and tax advisors in Dubai are here to help. For all your ESR and broader taxation needs, Shuraa Tax is your trusted partner. Contact us today at +971508912062 or info@shuraatax.com.

  • What is ICV Certification in UAE and How to get it?

    What is ICV Certification in UAE and How to get it?

    In today’s competitive business landscape, it is essential for companies to differentiate themselves and showcase their commitment to the local economy. One way to do this is by obtaining ICV (In-Country Value) certification in Dubai.

    ICV certificate in Dubai, UAE is a measure of the value that a company brings to the local economy through its operations and investments. By obtaining ICV certification, businesses can demonstrate their contribution to the development of the UAE and showcase their commitment to supporting local industries and businesses.

    The benefits of obtaining ICV certification are numerous. Not only does it provide a competitive edge in the market, but it also helps businesses build stronger relationships with local partners and stakeholders.

    So, let’s understand more about what ICV certification is, its purpose, and how businesses can obtain it.

    What is ICV Certification in the UAE?

    ICV (In-Country Value) Certification in the UAE is a program implemented by the Ministry of Industry and Advanced Technology (MoIAT) to assess a company’s contribution to the UAE economy. It essentially measures how much of a company’s operations benefit the UAE.

    In-Country Value (ICV) refers to the value a company creates within the UAE. This includes factors like:

    • Local spending on manufacturing and services
    • Use of locally produced goods
    • Investments within the UAE
    • Hiring and training Emirati employees

    Goals of the National ICV Program in the UAE

    The National ICV Program has several goals:

    1. Boost economic growth and diversification

    By encouraging companies to invest and operate locally, the program aims to stimulate the UAE’s economy and reduce reliance on specific sectors.

    2. Promote technology transfer and knowledge sharing

    The program incentivizes companies to bring their expertise and technologies to the UAE, which can benefit local businesses and the workforce.

    3. Create job opportunities for UAE nationals

    By prioritizing the hiring and training of Emirati citizens, the program aims to increase employment opportunities for UAE nationals.

    4. Support the development of local industries

    The program encourages companies to source goods and services from local suppliers, strengthening domestic industries.

    5. Attract foreign direct investment that contributes to in-country value

    The program seeks to attract foreign investment that benefits the UAE economy, not just the investing company.

    Who Needs ICV Certificate in the UAE?

    ICV Certification in the UAE isn’t mandatory for all businesses, but it’s highly recommended for specific sectors and situations.

    Mandatory:

    • All suppliers and contractors directly working with the Abu Dhabi National Oil Company (ADNOC) and its subsidiaries.

    Highly Recommended:

    • Businesses aiming to participate in government tenders and contracts, especially in sectors like oil & gas, construction, transportation, and healthcare.
    • Companies looking to establish a reputation for supporting the local economy and creating jobs in the UAE.

    What is an ICV Scores

    It’s a metric used to assess a company’s contribution to the UAE’s economy. The higher the score, the greater the perceived benefit the company brings to the country.

    Tiers and ICV Scores

    Tier 1 Suppliers: These are companies directly providing goods or services to government entities or program partners. Tier 1 suppliers typically need to declare their ICV score as a key part of the tender evaluation process.

    Tier 2 and Below: While not always mandatory, obtaining an ICV certificate in Dubai can be beneficial for these suppliers (companies supplying to Tier 1) to improve their competitiveness in tenders.

    During government tenders, companies submit bids. The ICV score becomes a factor considered alongside other bid criteria like price and technical expertise. A higher ICV score indicates a greater contribution to the UAE’s economy, making the bid more attractive and potentially increasing the chances of winning the tender.

    Factors That Contribute to ICV Score

    The ICV score in the UAE is a combination of several factors that reflect a company’s contribution to the local economy. Here are some of the key contributors:

    1. Manufactured Goods (for companies with an industrial license)

    The cost of goods manufactured within the UAE is a major factor. Local production creates jobs and boosts industrial development.

    2. Third-party spending (for companies without an industrial license)

    This refers to the company’s spending on goods and services procured from local suppliers. Prioritizing local vendors strengthens the domestic supply chain.

    3. Emiratization

    Hiring and training Emirati nationals is a significant contributor. The program aims to empower the local workforce and reduce dependence on expatriate labor.

    4. Expatriate Contributions

    While Emiratization is a focus, the overall size of the expatriate workforce is also considered.

    5. Investments in the UAE

    The net book value of a company’s assets in the UAE, like property, plant, and equipment, is a factor. This reflects the company’s long-term commitment to the country.

    6. Revenue from Outside the UAE 

    Earning revenue through exports demonstrates the company’s contribution to the UAE’s overall economic activity.

    How to Get an ICV Certificate in UAE? Step-by-Step Process

    Here’s a step-by-step process for obtaining an ICV Certificate in Dubai, UAE:

    1. Check Eligibility

    Verify if ICV Certification is mandatory for your sector or if you’re aiming for tenders that emphasize ICV scores. It’s generally recommended for businesses in government contracting, oil & gas, construction, transportation, and healthcare.

    2. Prepare Required Documents 

    Gather essential documents as per MoIAT guidelines, which may include:

    • Audited financial statements compliant with International Financial Reporting Standards (IFRS) – not older than 2 years.
    • Management accounts for new companies (less than 10 months old) – not older than 9 months.
    • Proof of local spending on goods and services procured from UAE suppliers.
    • Employee details highlighting the number of Emirati personnel.
    • Details on any investments within the UAE (property, plant, equipment).

    3. Select an ICV Certifying Body

    Choose an accredited ICV certifying body approved by MoIAT. They will handle the evaluation and certificate issuance.

    4. Complete the ICV Template

    Download the ICV Template from the MoIAT website and fill it out based on your company’s data and the provided guidelines. Ensure figures align with your financial statements.

    5. Submit for Evaluation

    Submit the completed ICV template and all supporting documents to the chosen certifying body. They will assess your company’s ICV score based on MoIAT criteria.

    6. Issuing the ICV Certificate

    Upon successful evaluation, the certifying body will issue your official ICV Certificate in Dubai. This typically takes a few weeks.

    Related Insights: How to Get ICV Certification in Qatar

    Benefits of Obtaining ICV Certification in the UAE

    Obtaining ICV Certification in the UAE offers several advantages for businesses, especially those looking to expand their operations or participate in government projects.

    1. Strong Advantage in Government Tenders

    Especially in sectors like oil & gas, construction, transportation, and healthcare, government tenders often prioritize companies with high ICV scores.

    2. Signals Commitment to UAE’s Development

    An ICV certificate showcases your company’s positive contribution to the UAE’s economic growth and diversification goals. This can attract potential business partners, investors, and clients.

    3. Long-Term Partnerships

    Building a strong ICV profile can lead to long-term partnerships and collaborations with government entities, major corporations, and other stakeholders in the UAE. 

    4. Improved Supply Chain Efficiency

    The focus on local sourcing encouraged by ICV can help companies optimize their supply chains and potentially reduce costs. 

    5. Potential Financial Incentives 

    The UAE government is also planning to introduce potential financial incentives like tax breaks or grants for companies with high ICV scores. An ICV certification positions you to benefit from such future programs.

    Get Expert Help with ICV Certification Today

    Now you know ICV certification is a crucial requirement for businesses in the UAE looking to participate in government contracts. It not only showcases a company’s commitment to supporting the local economy but also opens up opportunities for government contracts.

    While the application process may involve compiling documents and meeting specific criteria, seeking guidance from a qualified tax advisor can ensure a smooth and efficient experience. Shuraa Tax, a group of knowledgeable and qualified accountants, auditors, and tax advisors in Dubai, UAE, can assist you with understanding the ICV program, gathering the necessary documentation, and completing the application process successfully.

    Contact Shuraa Tax today at +971508912062 or info@shuraatax.com. to learn more about how ICV certification can benefit your business in the UAE.

    Frequently Asked Questions 

    1. How is the ICV Score Calculated for an ICV Certificate?

    Your ICV score is a combination of several factors that reflect your company’s contribution to the UAE economy. This generally includes: 

    • Economic Contribution
    • Workforce and Talent Development
    • Investment (property, plant & equipment)
    • Revenue from exports

    2. Is there an eligibility criterion to get ICV certification?

    ICV certification isn’t mandatory for all businesses. However, it’s mandatory for companies working directly with ADNOC (Abu Dhabi National Oil Company) and its subsidiaries must have ICV certification. Businesses aiming to participate in government tenders (especially in oil & gas, construction, transportation, and healthcare) are strongly encouraged to get certified.

    3. Can foreign companies obtain ICV Certification?

    Yes, foreign companies operating in the UAE can obtain ICV certification. The program encourages foreign companies to contribute to the local economy through local hiring, sourcing from UAE suppliers, and investing within the country.

    4. How long does the ICV certification process take?

    The processing time for ICV certification typically takes 7 to 14 working days, assuming you provide all the required information promptly to the certifying body.

    5. How long is an ICV certificate valid?

    The ICV certificate is valid for 14 months from the date your audited financial statements are issued. During this period, companies can apply for recertification with the same financial statements, but the validity remains 14 months from the initial issuance.

    6. What is the cost of obtaining ICV (In-Country Value) Certification in UAE?

    There isn’t a fixed price for obtaining ICV certification in the UAE. The cost typically varies depending on a few key factors such as company size, certifying body, and application complexity.

  • Dubai Import Tax: A Complete Guide for Businesses

    Dubai Import Tax: A Complete Guide for Businesses

    Dubai is one of the world’s top trade hubs, connecting businesses from all over the globe. Thanks to its strategic location, advanced ports, and strong infrastructure, Dubai plays a major role in international trade. In fact, Dubai’s total non-oil trade in 2023 was over AED 1.2 trillion, making it a prime destination for businesses looking to import goods.

    If you’re running a business in Dubai or planning to import goods into the city, understanding import taxes is essential. Dubai import tax system primarily revolves around two key components – Customs Duty & Value Added Tax (VAT). This essentially means the tax is applied to the total value of your goods, including their cost, insurance during transport, and freight charges.

    Taxes like customs duties and VAT (Value Added Tax) can affect your costs, pricing, and overall profitability. If you’re an importer or just starting out in the world of international trade, having a solid understanding of Dubai’s import tax regulations can help you understand the market more effectively and make informed decisions for your business.

    What is Dubai Import Tax?

    Import tax refers to the charges imposed by the government on goods brought into a country. Dubai import tax includes customs duties and Value Added Tax (VAT), which are levied on goods entering the emirate. These taxes are collected by Dubai Customs, the government agency responsible for regulating imports and ensuring compliance with trade laws.

    Types of Taxes Applicable to Imports in Dubai

    Dubai’s import tax system involves three main charges handled by the Dubai Customs department:

    1. Customs Duties

    Customs duties are taxes imposed on imported goods. In Dubai, the standard customs duty rate is 5% of the value of the goods, though rates can vary depending on the type of product. Certain goods, like alcohol or tobacco, may attract higher duties, while others may be exempt.

    2. VAT (Value Added Tax)

    VAT is a 5% tax applied to most goods and services in the UAE, including imported products. This tax is added to the value of the imported goods when they enter the country. Businesses importing goods must pay VAT at the point of entry but can reclaim the tax if they are VAT-registered and the goods are used for business purposes.

    3. Excise Tax

    In addition to customs duties and VAT, certain goods such as tobacco, sugary drinks, and energy drinks are subject to excise tax. This tax is meant to discourage the consumption of these products for health and environmental reasons and can significantly increase the cost of importing them.

    General Import Duty Rate in Dubai

    Customs duties, or import taxes, are fees levied by the government on goods imported into a country. The general import duty rate in Dubai is 5%. This is applied to the CIF value of the imported goods. CIF (Cost, Insurance, and Freight) value refers to the total landed cost of the imported goods. It includes three components:

    • Cost: The price you pay for the goods themselves to the seller.
    • Insurance: The cost of insuring the goods during transport from the seller to Dubai.
    • Freight: The cost of transporting the goods from the seller’s location to Dubai, including any loading and unloading charges.

    Essentially, the 5% import duty is calculated based on the total cost of acquiring and bringing the goods to Dubai, which takes into account the initial purchase price, insurance, and transportation expenses.

    How Import Duties are Calculated in Dubai?

    Here’s the formula to calculate the total Dubai import tax:

    Total Import Tax = Customs Duty + VAT

    Customs Duty = CIF value x Customs Duty Rate (e.g., 5%)

    VAT = (CIF value + Customs Duty) x VAT Rate (e.g., 5%)

    For example, you’re importing a shirt with a CIF value of AED 100 from a country that doesn’t have a special trade agreement with the UAE. Here’s how the import taxes would apply:

    Customs Duty: AED 5 (5% of AED 100)

    VAT: AED 5.25 (5% of AED 105, which includes the AED 5 customs duty)

    Total Import Tax: AED 10.25

    If the imported goods originate from a country with a free trade agreement with the UAE, a reduced or zero customs duty rate might apply.

    Dubai Import Tax Payment Process

    Paying import tax in Dubai involves a clear and structured process managed by Dubai Customs. Businesses must ensure that taxes are paid on time to avoid delays, penalties, or legal consequences. Here’s a step-by-step payment process:

    1. Register with Dubai Customs

    Businesses must first register with Dubai Customs and obtain a customs code. This is a mandatory requirement to import goods into Dubai. Registration can be completed online through the Dubai Trade Portal.

    2. Prepare and Submit Import Declaration

    Submit an import declaration for the goods through the Dubai Trade Portal or at customs offices. The declaration must include details such as the type of goods, their value, and relevant shipping information. Attach all required documents, including:

    • Commercial invoice
    • Packing list
    • Bill of lading/airway bill
    • Certificate of origin

    3. Calculation of Import Taxes and Duties

    Customs will review the import declaration and calculate the applicable customs duty (usually 5%) and VAT (5%) based on the declared value of the goods (Customs Value). If any exemptions apply, these must be documented and verified at this stage.

    4. Pay the Import Taxes

    After calculation, the business must pay the applicable taxes and duties. Payments can be made online through the Dubai Trade Portal or at Dubai Customs’ designated payment counters.

    5. Receive Clearance and Release of Goods

    Once payment is confirmed, customs clearance will be granted. The goods can then be collected or delivered to their destination.

    Exceptions to the General Import Duty Rate

    There are several exceptions to this general import duty rate in Dubai, including:

    1. Excise Goods

    These are specific products considered harmful or luxurious, and they are subject to a higher tax rate than the general rate. This additional tax is called excise tax, and it’s levied on top of any applicable customs duty and VAT. Here are some examples of excise goods and their typical excise tax rates:

    • Tobacco Products (including cigarettes): 100%
    • Energy Drinks: 50%

    It’s essential to note that these are just examples, and the specific excise tax rate can vary depending on the product category.

    2. Specific Goods with Different Duty Rates

    Certain goods have pre-defined customs duty rates that deviate from the general 5%. For example:

    • Alcohol: 50% customs duty rate.

    3. Free Trade Agreements (FTAs)

    Dubai has Free Trade Agreements with many countries. These agreements often involve reduced or eliminated customs duties in the UAE for goods originating from those partner countries. This promotes trade and strengthens economic ties between Dubai and its FTA partners.

    For instance, if you’re importing a garment from a country with a relevant FTA, the import duty might be lower than the general 5% rate, or even zero in some cases. 

    Import Tax Exemptions in Dubai

    Free Trade Agreements are the most significant way to achieve lower or zero import duties in the UAE. There might also be exemptions, or duty guarantees for specific situations like importing goods for exhibitions or re-export purposes. However, these typically involve procedures and guarantees to ensure the goods eventually leave the country.

    Dubai Customs allows exemptions for used personal effects and household items brought in by returning residents or newcomers. There are conditions to meet, such as proof of residency and quantities appropriate for furnishing a house.

    Most goods imported into Dubai’s Free Zones are exempt from customs duties, provided they are used within the Free Zone or re-exported to other markets. This exemption can significantly lower the cost of doing business for companies importing goods for storage, processing, or redistribution within the zone.

    Goods and Categories Exempt from Dubai Import Tax or VAT

    1. Basic Food Items

    Many basic food products, such as rice, bread, vegetables, fruits, and grains, are exempt from customs duties in Dubai. This is part of the government’s effort to ensure affordable access to essential goods for residents and businesses. However, there may be exceptions, so it is important to check the classification of specific items.

    2. Medicines and Medical Equipment

    Essential medicines and medical supplies are often exempt from both customs duties and VAT. These exemptions support Dubai’s healthcare system and facilitate the import of critical health-related goods. However, certain medical equipment may require specific certifications or approvals before being imported.

    3. Books, Educational Materials, and Publications

    Educational materials, such as books, scientific journals, and other publications, are generally exempt from VAT in Dubai. This exemption encourages the importation of educational resources and supports the growth of the education sector.

    4. Relief Supplies and Donations

    Goods that are imported for charitable or relief purposes are often exempt from taxes. This includes products sent by humanitarian organizations or in response to crises, such as food, clothing, and medical aid.

    How to Claim for Import Tax Exemption in Dubai, UAE?

    The procedure for claiming import tax exemption in Dubai depends on the reason for the exemption.

    1. Importing Personal Effects and Household Items

    This applies to nationals returning to Dubai or foreigners coming to reside in Dubai for the first time.

    You will need to submit the following documents at customs:

    • A packing list detailing the contents of the shipment
    • Proof of residence abroad for nationals
    • Proof of work and residency visa for foreigners

    2. Importing Industrial Inputs (Machinery, Equipment, and Raw Materials)

    This applies to businesses registered in the UAE. You will need to apply online through the Ministry of Industry and Advanced Technology (MoIAT) e-services platform. The process involves:

    • Registering or logging in to the platform
    • Completing the Customs Exemption Request Form
    • Paying any applicable fees
    • Downloading a copy of the application for your customs declaration

    In some cases, you can claim a refund or drawback on import duties in the UAE if they were overcharged due to errors in classification, valuation, or calculation of the duty. This typically involves a process of filing a claim with the customs authorities within a specific timeframe.

    Documents Required for Importing Goods to Dubai

    Proper documentation is essential for a smooth import process, avoiding delays, fines, or legal issues. Here are some key documents typically required for importing goods to Dubai:

    1. Commercial Invoice:

    • Description of the goods
    • Quantity and unit price
    • Total value of the shipment
    • Details of the buyer and seller

    2. Packing List:

    • Number of packages
    • Weight and dimensions of each package
    • Content descriptions

    3. Bill of Lading or Airway Bill:

    • Shipment details
    • Port of loading and discharge
    • Carrier information
    • Terms of transport

    4. Certificate of Origin:

    Issued by the exporter’s chamber of commerce, this certificate specifies the country of origin of the goods.

    5. Customs Code:

    All importers must register with Dubai Customs and obtain a customs code. This unique identification number is used for customs transactions and clearance.

    6. Insurance Certificate:

    This document proves that the shipment is insured during transit.

    7. Sales Agreement or Purchase Order:

    While not always mandatory, this document can help verify the transaction details between the importer and exporter, especially in cases of disputes.

    8. VAT Registration Certificate:

    If your business is VAT-registered, you may need to provide your VAT registration certificate to claim input tax credits on imported goods.

    Ensure all documents are translated into Arabic (if required) or accompanied by certified translations. Work with a professional at Shuraa Business Setup if you are unsure about compliance requirements.

    Let Shuraa Tax Be Your Guide!

    Importing goods into Dubai can be a great business opportunity, but understanding the Dubai import tax system is crucial for smooth operations and accurate cost calculations

    Shuraa Tax is here to simplify your UAE taxation journey. Our team of knowledgeable and qualified accountants, auditors, and tax advisors can provide comprehensive assistance with Dubai import tax, UAE VAT, tax management auditing, and accounting services across various Emirates.

    Contact Shuraa Tax today and let us handle the complexities, so you can focus on your business growth. Get in touch today at +971508912062. You can also drop us an email at info@shuraatax.com.

  • IFRS Advisory Services in UAE

    IFRS Advisory Services in UAE

    Following challenging accounting standards is critical when you increase your business abroad and manage significant transactions. The International Financial Reporting Standards (IFRS) are widely accepted rules for financial reporting included by many countries. Companies typically adopt these standards to guarantee compliance and maintain correct financial records.

    However, because these standards can change and cause confusion, it’s essential to have contact with IFRS Advisory Services. In this blog by Shuraa Tax, we explore the importance of these services and how Shuraa Tax can assist in guaranteeing compliance with IFRS regulations.

    What does IFRS Advisory mean?

    IFRS, or International Financial Reporting Standards, offers a fundamental framework for creating financial statements. These universal rules are used worldwide to guarantee financial statements are uniform, reliable, and can be compared easily. The International Accounting Standards Board (IASB) issues the IFRS framework. IFRS is a global language that fosters business transactions with credibility and transparency. Therefore, companies must adhere to IFRS guidelines to uphold effective and dependable financial reporting.

    Benefits of IFRS

    The following are the benefits of IFRS:

    • Improves transparency and comparability of financial information, assisting investors in making informed decisions.
    • Reinforces accountability by bridging the gap between capital providers and recipients.
    • Promotes economic efficiency by allowing global risk and opportunity recognition, enhancing capital allocation.
    • Increases reliability of financial statements through precise preparation and ethical practices.
    • Facilitates VAT compliance, particularly in jurisdictions like the UAE, where IFRS is mandatory for listed and LLC companies, ensuring credible VAT reporting.

    Key International Financial Reporting Standards

    Below are a few significant International Financial Reporting Standards (IFRS):

    IFRSs & IASs Objectives & Scopes
    IFRS 2 An organisation must recognise share-based payment transactions in its financial statements, such as granted shares, share options, or share appreciation rights.
    IFRS 3 Business Combinations cover accounting for when one company gains control of another through acquisition or merger.
    IFRS 5 This standard outline accounting for non-current assets designated for sale or distribution to owners.
    IFRS 6 Exploration and Evaluation of Mineral Resources standard permits entities new to the standard to use their existing accounting policies for exploration assets. It also changes how impairment testing is conducted for these assets.
    IFRS 9 Acknowledgement and Measurement categorise financial assets based on the business model in which they are held, and it is applicable across all industries.
    IFRS 10 Consolidated Financial Statements sets rules for preparing and presenting consolidated financial statements, mandating entities to include those they control.
    IFRS 14 Regulatory Deferral Accounts lets first-time adopters of IFRS continue accounting for ‘regulatory deferral account balances’ as per their previous GAAP, with slight adjustments.
    IFRS 15 Revenue from Contracts with Customers applies to all customer contracts.
    IAS 2 Inventories dictate how to account for various inventory types.
    IAS 16 Property, Plant, and Equipment govern the accounting for most types of such assets.

    Importance of IFRS

    Financial reporting standards are essential for global and international reporting as they provide consistent data, confirm economic efficiency, and aid investors in identifying opportunities and risks worldwide to improve capital allocation. IFRS provides general guidelines for preparing financial statements.

    It’s essential for the following reasons:

    1.     Starting consistent measures and recognition methods prevents manipulation, errors, and discrepancies in financial reporting.

    2.     With multinational corporations operating worldwide, a universal accounting standard improves the credibility of financial reports, facilitating international trade and economic growth.

    3.     IFRS ensures consistency in treating business activities, provides users of financial statements with clear explanations for item recognition, and enables accurate decision-making.

    Latest updates in the IFRS

    Stay updated on the latest developments in International Financial Reporting Standards.

    1.     IFRS 15 – Revenue from contracts with customers

    IFRS 15 centres on transferring control and identifying performance obligations. We evaluate how these obligations align with the requirements of IFRS 15, considering various revenue sources such as Trading, Construction, and Services. It offers a unified model for recognising revenue from all goods and services across diverse industries.

    Our IFRS advisory services will conduct an Impact assessment on IFRS 15, covering the following key areas:

    • Identifying customer contracts and performance obligations.
    • Evaluating whether obligations are fulfilled at a specific point or over time, based on IFRS 15 criteria.
    • Verifying contract cost recognition and transaction price allocation.
    • Determining the timing of revenue recognition.
    • Analyzing contract modifications for IFRS 15 compliance.
    • Assessing the need for significant estimate revisions.
    • Identifying areas requiring critical judgment and interpretation.
    • Recommending extensive disclosure requirements as per the new standard.

    IFRS 15 Substitutes 

    IAS 11 Construction contracts
    IAS 18 Revenue
    IFRIC 13 Customer loyalty programs
    IFRIC 15 Agreement for the construction of the real estate
    IFRIC 18 Transaction of assets from customers

    2.  IFRS 16- Leases 

    IFRS 16, issued by the International Accounting Standards Board, provides guidelines for lease accounting. Effective in January 2019, for most companies reporting under IFRS, it replaced the previous leasing standard, IAS 17, issued in January 2016.

    The impact of IFRS 16 standard:

    • Enhances transparency regarding companies’ lease obligations, assets, and liabilities.
    • Improves comparability between companies that lease and those that borrow to purchase assets.

    Our IFRS advisory services at Shuraa Tax for IFRS 16 – Leases will include:

    • Identifying lease contracts and assessing IFRS 16 applicability.
    • Reviewing any subleases.
    • Conducting lease accounting reviews as necessary.
    • Providing guidance on determining discount rates, lease terms, etc.
    • Assisting in preparing lease amortisation tables.
    • Offering guidance on transition methods.
    • Recommending changes to IT systems and processes to comply with IFRS 16 requirements.
    • Addressing disclosure requirements according to the standard.

    3. IFRS 9 – Finanqcial Instruments

    IFRS 9, issued by the International Accounting Standards Board (IASB), focuses on financial instrument accounting and replaces the IAS 39 Recognition and Measurement standard.

    The impact assessment for IFRS 9 will broadly include:

    • Categorising and measuring financial assets and liabilities.
    • Evaluating impairment of financial assets and liabilities using the three-stage damage model.
    • Applying IFRS 9 through practical expedients.
    • Addressing disclosure requirements as per the standard.

    Under IFRS 9—financial instruments, starting an impairment allowance is mandatory. It must be regularly assessed, and any changes in the allowance must be reflected in the profit and loss account.

    4.  IFRS 17- Insurance Contracts

    IFRS 17 mandates that insurance liabilities be assessed at their current fulfilment value, offering a standardized measurement and presentation method for all insurance contracts. It replaces IFRS 4 Insurance Contracts and related interpretations and applies to periods starting from January 1, 2023. Early adoption is allowed if IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial instruments are implemented.

    Other IFRS Advisory Services in the UAE include:

    • Developing Accounting Policies/IFRS Manual.
    • Conducting IFRS Training.
    • Providing Implementation Support for IFRS standards such as IFRS 16, IFRS 9, and IFRS 15, among others.

    Shuraa Tax IFRS Services

    Well-known for its exceptional IFRS consulting services across the UAE, Shuraa Tax assists clients comprehensively in financial reporting, preparing IFRS financial statement, analysing upcoming amendments, and more. Our IFRS advisory and consulting services include:

    • Assistance with IFRS adoption and implementation
    • Support for implementing complex standards
    • Conducting impairment testing and modelling
    • Ensuring compliance with revenue recognition processes and controls
    • Developing comprehensive reporting manuals
    • Formulating sustainability plans
    • Helping update IFRS accounting policies by standards changes or adoptions
    • Providing training and facilitating knowledge transfer processes.

    Why Choose Shuraa Tax Accounting?

    Implementing the new IFRS standards has posed significant challenges for companies in the UAE, particularly because many have delayed the process. This results in a concentrated workload towards the end of the year rather than being spread out. It also requires substantial efforts from the IT side. These new standards have led to discrepancies in income statement and balance sheet arrangements.

    At Shuraa Tax, our experienced professionals can provide superior IFRS advisory services for your business, ensuring alignment with global standards and compliance with tax regulations to relieve your business of tax burdens.

    In addition to offering IFRS advisory services in the UAE, Shuraa Tax efficiently manages CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software Services, Due Diligence Services, and Tax Filing & VAT Consultancy services promptly and conveniently for our valued clients. Our customer-centric approach is highly regarded, and we guarantee exceptional service for your business.

    Require IFRS advisory services? Don’t hesitate to reach out to us. Shuraa Tax is here to assist you! Contact us today to learn more about our services. Reach us at +971508912062 or email us at info@shuraatax.com.

  • Corporate Tax Return Filing in UAE

    Corporate Tax Return Filing in UAE

    Corporate tax returns filing in the UAE is not just about fulfilling a legal requirement; it’s also about maintaining transparency and accountability within your business. The implementation of corporate tax in the UAE has been a significant development for businesses operating in the region. While the tax rates are relatively low compared to other countries, it’s still crucial for businesses to accurately file their corporate tax returns to ensure they are meeting their obligations to the government.

    By accurately reporting your financial information and paying the appropriate taxes, you are showcasing your commitment to operating ethically and contributing to the growth of the UAE’s economy.

    So, let’s thoroughly understand the process of filing corporate tax returns in the UAE and the other essential considerations you should know to keep your business running hassle-free in Dubai.

    What is Corporate Tax Return Filing in UAE?

    Corporate Tax Return Filing in the UAE refers to the process of submitting a report to the Federal Tax Authority (FTA) by taxable person, detailing your business’s income and expenses for a specific tax period. This report helps the FTA determine your taxable income and the amount of Corporate Tax you owe.

    All registered taxable persons must file a corporate tax return, even if they have no taxable income or qualify for a 0% tax rate.

    Who Needs to File Corporate Tax Returns in the UAE?

    In the UAE, most businesses will need to file corporate tax returns. This includes:

    1. Businesses and Individuals

    Any entity conducting business activities under a commercial license in the UAE, including both local and foreign companies.

    2. Free Zone Businesses

    Generally, even free zone entities must file, although Qualifying Free Zone persons with certain benefits may have exemptions (check with the specific free zone authority).

    3. Minimum Threshold

    Businesses with annual taxable income exceeding AED 375,000 are subject to corporate tax and must file returns. Those below this threshold pay 0% tax but may still need to register.

    A taxable person under the UAE corporate tax law is any business entity required to pay corporate tax. This includes residents (companies based in the UAE) and non-residents with a permanent establishment or deriving UAE-sourced income.

    Related Insights: How is Corporate Tax Different from Value-Added Tax in UAE?

    Entities Exempt from Filing

    Certain entities are exempt from corporate tax returns filing in the UAE. Examples of entities that may be exempt include:

    1. Public Benefit Entities

    Non-profit organizations established for charitable purposes may be exempt, subject to meeting specific criteria.

    2. Natural Resource Extraction

    Businesses engaged solely in extracting UAE natural resources might follow Emirate-level tax decrees instead.

    3. Investment Funds

    Certain investment funds that meet the conditions set out in the corporate tax law.

    It’s always advisable to consult with a Shuraa tax professional for specific guidance on your situation, especially regarding exemptions and free zone benefits.

    Deadlines for Corporate Tax Return Filing in the UAE

    The UAE offers businesses a generous window to file their corporate tax returns. The general deadline falls 9 months from the end of the relevant tax period. This applies to both resident and non-resident businesses operating within the UAE.

    The UAE operates under a self-assessment system for corporate tax. This means businesses are responsible for calculating, reporting, and paying their tax liability.

    Let’s consider a company with a financial year ending on December 31, 2025 (tax period January 1, 2025 – December 31, 2025).

    Adding 9 months to the end date (December 31, 2025) brings us to September 30, 2026.

    Therefore, this company would have a deadline of September 30, 2026, to file its corporate tax return for the 2025 tax period.

    Documents Required for Corporate Tax Return Filing

    Filing a corporate tax return in the UAE requires the submission of specific documents which typically include: 

    • Copy of Trade License (valid and unexpired) 
    • Emirates ID copies of Owners/Partners/Shareholders 
    • Passport copies of Owners/Partners/Shareholders 
    • Memorandum of Association (MOA), if required 
    • Financial Statements 
    • Records Supporting Deductions (Receipts, invoices, and other documentation for expenses) 
    • Taxable Income Calculations 
    • Details of Depreciation and Amortization 
    • Loan Documents (if applicable) 
    • Records of Exempt Income (if applicable) 

    How to File Corporate Tax Returns in the UAE?

    Filing corporate tax returns in the UAE involves several steps, from gathering the necessary documents to submitting the return online. Here’s a step-by-step process:

    1. Ensure Tax Registration

    Verify your company has a valid Tax Registration Number (TRN) issued by the Federal Tax Authority (FTA). If not registered, complete the registration process through the FTA’s online portal.

    2. Gather Required Documents

    Assemble the necessary documents (Company Registration Documents & Financial Documents). Ensure they are accurate, complete, and cover the relevant tax period.

    3. Prepare the Tax Return

    Utilize the official FTA corporate tax return forms, available online or through tax software providers. Carefully calculate your taxable income, considering all applicable deductions and exemptions as per UAE corporate tax regulations. Attach supporting documentation for claimed deductions and exemptions.

    Choose the appropriate tax period for which you are filing the return. Fill in the details:

    • Enter financial details, including revenue, expenses, and net profit.
    • Provide information on any adjustments to income (e.g., depreciation, provisions).
    • Enter details of related party transactions and any tax payments made.

    4. Submit the Tax Return

    Complete the declaration section, confirming that the information provided is accurate and complete. Click the ‘Submit’ button to file your corporate tax return with the FTA.

    5. Confirmation and Payment

    Upon successful submission, you will receive a confirmation receipt or acknowledgement from the FTA. If you have a tax liability, ensure timely payment of the corporate tax due. Payment details and deadlines will be provided on the FTA portal. 

    6. Maintain Records 

    Retain all documents used for tax return preparation for at least five years from the filing date, as the FTA may request them for audits or verification purposes.

    We highly recommend, getting expert assistance from professional like Shuraa Tax to ensure accurate and timely filing of corporate tax returns in the UAE.

    Penalties for Late Filing of Corporate Tax Returns in UAE

    Penalties for Late Filing of Corporate Tax Returns in UAE. The UAE enforces penalties for late filing of corporate tax returns. A penalty of AED 500 per month applies for the initial twelve months of delay.

    After the first year, the penalty increases to a steeper AED 1,000 per month or part thereof. There’s a maximum penalty cap, but the specific amount may vary depending on official pronouncements.

    These penalties are imposed to encourage timely filing and ensure tax compliance. Filing late can significantly increase your tax burden, so adhering to deadlines is crucial. The Federal Tax Authority (FTA) has the authority to waive or reduce penalties in specific circumstances. However, it’s best to avoid late filing altogether.

    Corporate Tax Return Filing Service in UAE

    Filing corporate tax returns is crucial for businesses in the UAE to stay compliant and avoid penalties. Given the complexity of tax regulations, seeking corporate tax return filing services in UAE is a good choice.

    Shuraa Tax offers top-notch corporate tax return filing services, with a team of dedicated experts ready to handle all your tax and accounting needs. Our tax consultants in Dubai will review your finances and help with tax planning and bookkeeping. Our professionals ensure that your tax returns are filed accurately and on time, helping you avoid any unnecessary fines and maintain a good standing with the authorities.

    Don’t stress about filing your corporate tax returns. Contact us today to learn how we can support your business with our reliable and comprehensive tax services.

    Frequently Asked Questions

    1. Is it mandatory to file corporate tax returns in UAE?

    Yes, filing corporate tax returns is mandatory for most businesses operating in the UAE. This includes local and foreign companies with a UAE commercial license. Individuals with a business exceeding AED 1 million annual turnover also need to file.

    2. What is the deadline for filing corporate tax returns?

    Businesses have nine months from the end of their tax period to submit their return and settle any corporate tax due.

    3. Should free zone entities file corporate tax returns?

    Generally, yes. However, Qualifying Free Zone persons with compliant activities and no UAE mainland business may be exempt. It’s recommended to check with the relevant Free Zone authority or a tax professional to confirm your specific requirements.

    4. What is the corporate tax rate in the UAE?

    The standard corporate tax rate in the UAE is a flat 9%. However, there’s a 0% tax rate for businesses with annual taxable profits below AED 375,000.

    5. Is there a Difference Between Taxable Income and Accounting Income?

    Yes, taxable income and accounting income are not the same. Accounting income reflects your company’s overall financial performance, while taxable income is calculated based on accounting income with adjustments according to UAE corporate tax regulations.

  • VAT Refund Dubai for Tourists

    VAT Refund Dubai for Tourists

    Value Added Tax (VAT) is a consumption tax that is added to the cost of goods and services at each stage of production. While VAT is a common tax in many countries, tourists visiting Dubai will be pleased to know that they can actually get a refund on the VAT they pay on certain purchases.

    VAT refund in Dubai for tourist allows you to enjoy shopping in Dubai without having to worry about paying extra taxes. The VAT refund system in Dubai is designed to make shopping more enjoyable for tourists, and it provides a great incentive for visitors to shop and spend money in the city.

    So, if you’re too planning a visit and shopping in Dubai, explore the benefits of the tourist VAT refund in Dubai and understand how tourists can take advantage of this great opportunity.

    VAT in Dubai

    VAT stands for Value Added Tax. It’s an indirect tax levied on most goods and services at each stage of the supply chain. Businesses registered for VAT collect VAT from customers and then remit it to the government, minus the VAT they paid on their own business purchases (input VAT).

    This ensures the final consumer bears the burden of the tax.

    The standard VAT rate in the UAE is 5%. This applies to most goods and services.

    However, there are also two other categories:

    Zero-rated supplies: These have a 0% VAT rate. This applies to exports outside the GCC (Gulf Cooperation Council) countries, international transportation, some specific areas like healthcare and education, and the first supply of residential property within 3 years of completion.

    Exempt supplies: These are not subject to VAT at all.

    Tourist VAT Refund Scheme in UAE

    The VAT Refund Scheme in the UAE for Tourists is a program that allows visitors to claim back a portion of the Value Added Tax (VAT) they paid on eligible purchases made during their trip.  Basically, it’s a way for tourists to get some money back on the taxes they paid for goods.

    When you buy something in the UAE, there’s usually a 5% VAT added to the price.  This scheme lets you get some of that VAT back when you leave the country. This program is exclusive for tourists visiting the UAE, not residents or crew members departing.

    However, it’s not a full refund, you can get back 85% of the VAT you paid, minus a small service fee.

    Who is Eligible for VAT Refunds?

    Here are some general requirements to be eligible for VAT refunds in Dubai for tourist:

    • You must be a tourist visiting the UAE, not a resident or a crew member departing the country.
    • You must be 18 years old or older.
    • Your purchases need to be at least AED 250 (around $68 USD) per individual tax invoice (receipt) from a store participating in the VAT Refund Scheme.

    The scheme applies to most goods, but with some exceptions. Here’s what qualifies:

    • Goods that are unopened, unused, and in their original packaging.
    • Most store-bought items (electronics, clothing, etc.)

    Not Eligible:

    • Food and Beverages are generally not included in the scheme.
    • The program applies to goods, not services like restaurant bills or salon services.
    • Certain goods like basic necessities (fresh food) and local residential rents are already VAT-exempt and not eligible for further refunds.

    Please note you have 90 days from the purchase date to validate your Tax Refund Slip at the airport upon departure. You can claim your refund within one year from validating the Tax Refund Slip.

    The VAT Refund Process in Dubai for Tourists

    Here’s a step-by-step guide on claiming VAT refund in Dubai for tourist:

    1. Look for Participating Retailers

    Keep an eye out for stores displaying the “Tax-Free” or “Premier Tax Free” logo. These shops are part of the VAT refund program.

    2. Request a Tax Refund Slip

    When making a purchase above AED 250, ask the cashier for a Tax Refund Slip. This slip details your purchase and the VAT amount you paid.

    3. Validate Your Tax Refund Slip

    At departure from the UAE, head to a planet tax-free kiosk or manned desk at the airport before checking in your luggage and clearing security. You’ll need:

    • Your Passport
    • The Tax Refund Slip(s)
    • The Purchased Items (which may be inspected by customs)

    4. Receive your Refund

    You can get 85% of the VAT amount back, minus an AED 4.80 service charge per Tax-Free Tag. You can choose a cash refund (AED 35,000 maximum) or a credit card refund.

    5. Time Limits

    You have 90 days from the purchase date to validate your Tax Refund Slip at the airport, and one year from validation to claim your refund.

    VAT Refund at Dubai Airport Requirements

    Here are the VAT Refund requirements at Dubai Airport (and all UAE airports) for Tourists:

    • The original passport used for entry into the UAE.
    • The original Tax Refund Slips issued by participating stores for your eligible purchases. Ensure they’re complete and accurate.
    • You must have the original purchased items with you in their unopened, unused, and original packaging. Customs officials may request to inspect them.
    • You have 90 days from the purchase date to validate your Tax Refund Slips at the airport before departure.
    • Pack your purchases carefully to avoid any damage during travel that might affect the refund process.

    Locations to Recover VAT in UAE for Tourists

    These are the most common locations for VAT recovery. All major airports in the UAE have designated VAT refund points, including:

    • Dubai International Airport (all terminals have VAT refund points)
    • Abu Dhabi International Airport
    • Sharjah International Airport
    • Al Maktoum International Airport (Dubai World Central)
    • Al Ain International Airport
    • Ras Al Khaimah International Airport

    VAT refunds can also be claimed at some seaports in the UAE, but this is less common than airports.

    Read more: How to Claim VAT Refund in UAE 2026?

    Shuraa Tax Simplifies Your Dubai Experience

    Claiming a VAT refund in Dubai is a great way for tourists to save money on their purchases and make the most of their trip. By taking advantage of this opportunity, visitors can enjoy shopping in Dubai without having to worry about paying extra for taxes. The process is simple and straightforward, and the benefits are definitely worth it.

    Keep your receipts safe, ensure your purchases are unopened and in original packaging, and factor in the time needed for validation at the airport.

    If you need assistance with VAT refunds or any other business taxation needs in the UAE, don’t hesitate to consult Shuraa Tax. Our team of highly experienced tax consultants can ensure you maximize your benefits and minimize any tax burdens.

    So, relax, enjoy the sights and sounds of Dubai, and leave the tax complexities to us.

    Get in today at +971508912062. You can also drop us an email at info@shuraatax.com.

  • Top 15 Audit Firms in Dubai, United Arab Emirates (2026)

    Top 15 Audit Firms in Dubai, United Arab Emirates (2026)

    Dubai has grown into a major hub for businesses from all over the world, from finance and real estate to tech and hospitality. With so many companies operating here, keeping financial records accurate and staying compliant with the law has become more important than ever. This is where audit firms come in – they help businesses make sure their finances are correct, transparent, and trustworthy. 

    In 2026, the rules around finance and reporting in the UAE are more detailed than ever. Companies need to follow federal laws, VAT regulations, and international accounting standards (IFRS), along with rules in special financial zones like the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). 

    At Shuraa Tax, we help businesses manage their taxes and compliance smoothly. But we also know that choosing the right audit firm is a big part of staying on top of your financial responsibilities. That’s why in this blog, we’re sharing a list of the best audit firms in Dubai for 2026. 

    Top 15 Audit Firms in Dubai, UAE 

    Dubai is home to some of the world’s leading audit firms, offering a mix of global expertise and local insights. Here’s a closer look at the top audit companies in Dubai for 2026: 

    1. Shuraa Tax 

    Shuraa Tax is a UAE-based taxation and audit services provider that has been recognised among the top audit firms in Dubai for many years. The firm is known for its high reputation and deep local insights. Shuraa Tax is trusted by both local and international businesses for compliance and strategic guidance. 

    Shuraa’s in-depth understanding of federal laws, VAT, corporate tax, and free zone regulations allows them to provide practical, reliable, and tailored solutions for companies of all sizes. 

    Services Offered: 

    • Audit & Assurance: Financial statements audit, compliance reporting, IFRS advisory 
    • Tax Services: VAT registration, corporate tax advisory, and filing support 
    • Advisory Services: Business structuring, financial strategy, and regulatory compliance support 
    • Other Taxation Services: Payroll services, ICV certification, Liquidation report, and Bookkeeping & Accounting 

    Why Choose Shuraa Tax: 

    Shuraa Tax is a preferred choice for businesses seeking a local partner who understands UAE regulations, offers personalised services, and supports companies in achieving full compliance efficiently. They have helped hundreds of businesses establish smooth financial and compliance operations in Dubai. 

    2. Deloitte 

    Deloitte is one of the largest professional services networks in the world, known for its expertise in audit, consulting, tax, and advisory services. Founded over 175 years ago, it has built a reputation for combining global knowledge with local market insights. In Dubai, Deloitte works with a wide range of businesses, from multinational corporations to local enterprises, helping them navigate complex financial regulations. 

    Services Offered: 

    • Audit & Assurance: Ensures financial statements are accurate and compliant. 
    • Consulting: Business strategy, operations improvement, technology, and digital transformation. 
    • Risk Advisory: Internal controls, compliance, cybersecurity, and risk management. 
    • Tax Services: Corporate tax, VAT, transfer pricing, and global tax compliance. 

    Why Choose Deloitte: 

    Deloitte stands out for its strong industry-specific knowledge, innovative solutions, and a large team of professionals in Dubai who understand the UAE regulatory environment, including DIFC, ADGM, federal laws, and VAT compliance. 

    3. PricewaterhouseCoopers (PwC) 

    PwC is a global network of firms delivering audit, assurance, consulting, and tax services. With a presence in over 150 countries, PwC combines international expertise with deep knowledge of local markets. In Dubai, PwC has been helping businesses – both small startups and large corporations – ensure compliance, improve efficiency, and make informed financial decisions. 

    Services Offered: 

    • Audit & Assurance: Financial reporting, compliance audits, and risk assessment. 
    • Tax Services: Corporate tax planning, VAT advisory, and compliance support. 
    • Consulting: Business transformation, operations, strategy, and technology implementation. 
    • Advisory Services: Deals, mergers & acquisitions, and business valuations. 

    Why Choose PwC: 

    PwC is known for its client-focused approach, global best practices, and strong technology-driven auditing solutions. They help companies meet UAE regulations while offering insights to improve business performance. 

    4. KPMG 

    KPMG is a leading audit and professional services firm with a global network operating in more than 145 countries. With decades of experience, KPMG has built a strong presence in the UAE, working with companies of all sizes to manage risk, improve operations, and maintain compliance. 

    Services Offered: 

    • Audit & Assurance: External audits, IFRS reporting, and financial statement verification. 
    • Advisory: Business performance, risk management, and financial advisory. 
    • Tax Services: Corporate tax, VAT compliance, and international tax solutions. 
    • Digital & Technology Services: Data analytics, AI-based auditing, and cybersecurity advisory. 

    Why Choose KPMG: 

    KPMG is trusted for its integrity, quality, and commitment to understanding client needs. In Dubai, they combine international standards with local knowledge, making them ideal for businesses navigating both federal regulations and free zone requirements. 

    5. Ernst & Young (EY) 

    Ernst & Young (EY) is a global leader in assurance, tax, transactions, and advisory services. Their Dubai office supports businesses in the finance, technology, hospitality, and real estate sectors. 

    Services Offered: 

    • Assurance Services: Audit, IFRS reporting, and regulatory compliance. 
    • Tax Services: Corporate tax advisory, VAT, and global tax solutions. 
    • Advisory Services: Strategy, risk management, performance improvement. 
    • Transaction Advisory: Mergers, acquisitions, and business valuations. 

    Why Choose EY: 

    EY is recognised for its forward-thinking approach, leveraging technology in auditing, and helping clients understand the UAE’s evolving regulatory landscape, including DIFC, ADGM, and VAT compliance. 

    6. Grant Thornton 

    Grant Thornton is a globally recognised professional services network offering audit, tax, and advisory services. Their Dubai office focuses on helping growing businesses with compliance and financial strategy. 

    Services Offered: 

    • Audit & Assurance: Statutory audits, IFRS compliance 
    • Advisory Services: Business performance improvement, M&A support 
    • Tax Services: Corporate and indirect tax solutions, VAT advisory 

    Why Choose Grant Thornton: 

    Grant Thornton is appreciated for personalised service, sector expertise, and helping clients navigate UAE regulations efficiently. 

    7. BDO 

    BDO is a leading global network of public accounting firms with a strong presence in Dubai. They specialise in providing personalised audit and advisory services to small and medium-sized businesses as well as larger enterprises. 

    Services Offered: 

    • Audit & Assurance: Financial statements, IFRS compliance, internal audits 
    • Advisory Services: Business strategy, risk management, and corporate finance 
    • Tax Services: VAT, corporate tax, and international taxation solutions 

    Why Choose BDO: 

    BDO is known for a client-centred approach, flexibility, and the ability to combine global standards with deep local knowledge. 

    8. Crowe 

    Crowe is a global accounting and advisory network providing specialised audit and consulting services. In Dubai, they focus on helping mid-sized businesses and multinational clients ensure compliance and optimise operations. 

    Services Offered: 

    • Audit & Assurance: Financial audits, internal control reviews 
    • Advisory Services: Risk management, business transformation 
    • Tax Services: VAT advisory, corporate taxation, and global tax compliance 

    Why Choose Crowe: 

    Crowe is recognised for its innovative auditing techniques, strong client support, and in-depth understanding of UAE business regulations. 

    9. RSM UAE 

    RSM is a global network of independent audit, tax, and consulting firms, renowned for serving middle-market companies. They have experience working across industries, including real estate, retail, technology, and financial services. 

    Services Offered: 

    • Audit & Assurance: Statutory audits, IFRS reporting, and internal controls assessment 
    • Tax Consulting: VAT advisory, corporate tax planning, and cross-border tax solutions 
    • Advisory Services: Business strategy, risk management, mergers & acquisitions, and financial advisory 

    Why Choose RSM: 

    RSM UAE is trusted for delivering high-quality, practical solutions that meet global standards while addressing the unique requirements of the UAE market. 

    10. Moore Stephens UAE 

    Moore Stephens is an international accounting and advisory network with a long-standing reputation for professionalism and reliability. Their Dubai office helps companies of all sizes – from startups to established corporations- ensure compliance with UAE regulations while achieving business growth. They serve sectors such as hospitality, manufacturing, technology, and financial services. 

    Services Offered: 

    • Audit & Assurance: Statutory audits, IFRS reporting, and compliance checks 
    • Tax Services: VAT compliance, corporate tax planning, and advisory 
    • Advisory & Business Consulting: Business process improvement, financial management, risk advisory, and strategic consulting 

    Why Choose Moore Stephens: 

    Moore Stephens is recognised for its personalised approach, practical solutions, and deep understanding of both international standards and UAE-specific regulations. 

    11. Baker Tilly 

    Baker Tilly provides audit, advisory, and accounting services worldwide. In Dubai, they focus on helping businesses comply with UAE regulations and optimise performance. They have extensive experience serving sectors such as real estate, construction, technology, healthcare, and financial services. 

    Services Offered: 

    • Audit & Assurance: Statutory audits, financial statement reviews, and compliance audits 
    • Advisory Services: Business process improvement, corporate governance, risk management, and strategic planning 
    • Tax Services: VAT registration and filing, corporate tax advisory, and regulatory compliance support 

    Why Choose Baker Tilly: 

    Baker Tilly is known for its strong client relationships, practical advice, and ability to provide customised solutions that meet local regulations. 

    12. PKF UAE 

    PKF is an international network of accountancy firms providing auditing, accounting, and advisory services. Their Dubai office specialises in supporting SMEs, startups, and mid-market businesses across multiple industries such as real estate, manufacturing, and services. 

    Services Offered: 

    • Audit & Assurance: Financial statement audits, IFRS compliance, and internal control reviews 
    • Tax Services: VAT advisory, corporate tax support, and regulatory compliance 
    • Advisory Services: Business strategy, financial planning, and risk advisory 

    Why Choose PKF: 

    PKF UAE is recognised for its practical solutions, strong local expertise, and commitment to assisting businesses with the UAE regulatory framework efficiently while maintaining global standards. 

    13. Protiviti Middle East 

    Protiviti is a global consulting and internal audit firm providing specialised audit, risk, and advisory services. Their Dubai office focuses on helping businesses improve governance, risk management, and compliance. Protiviti has experience across sectors, including financial services, technology, energy, and healthcare. 

    Services Offered: 

    • Internal Audit & Risk Management: Assessing internal controls, operational risks, and compliance 
    • Advisory Services: Corporate governance, process improvement, and cybersecurity advisory 
    • Financial & Regulatory Compliance: Ensuring adherence to UAE laws, IFRS, and industry regulations 

    Why Choose Protiviti: 

    Protiviti is valued for its deep risk management expertise, innovative audit approaches, and ability to deliver tailored solutions for complex business environments. They help companies enhance internal processes while ensuring compliance. 

    14. Mazrouei & Co. Chartered Accountants 

    Mazrouei & Co. is a UAE-based audit and accounting firm with extensive experience in serving local and regional businesses. They specialise in financial audits, accounting services, and advisory services for companies operating in Dubai’s mainland and free zones. Their expertise spans sectors like real estate, trading, manufacturing, and professional services. 

    Services Offered: 

    • Audit & Assurance: Statutory audits, IFRS reporting, and internal control assessments 
    • Tax Services: VAT advisory, corporate tax support, and regulatory compliance 
    • Advisory Services: Business structuring, financial planning, and corporate governance 

    Why Choose Mazrouei & Co.: 

    Mazrouei & Co. is recognised for its personalised service, practical solutions, and strong understanding of UAE-specific regulations. They are a trusted partner for businesses seeking reliable auditing and compliance support in Dubai. 

    15. TMF Group UAE 

    TMF Group is a global firm providing accounting, tax, audit, and corporate services. In Dubai, they specialise in helping international and local companies manage compliance, reporting, and corporate governance. TMF Group serves clients in industries such as finance, real estate, manufacturing, and professional services. 

    Services Offered: 

    • Audit & Assurance: Financial statement audits, statutory compliance, and IFRS advisory 
    • Tax Services: VAT, corporate tax, and advisory services for UAE and international regulations 
    • Advisory Services: Business setup support, risk management, and corporate governance 

    Why Choose TMF Group UAE: 

    TMF Group UAE stands out for its global reach combined with strong local expertise. Their structured approach helps companies ensure compliance, streamline operations, and make informed financial decisions. 

    How to Choose the Right Audit Firm in Dubai for your Business? 

    Choosing the best audit firm is one of the most important decisions for your business in Dubai. Here’s a guide to make the selection easier. 

    1. Checklist: What to Evaluate 

    When evaluating audit firms, consider these factors: 

    • Reputation & Track Record: Look for firms with a proven history of reliable audits and satisfied clients. 
    • Fees & Value: Compare fees but also assess the value you’re getting – cheaper isn’t always better. 
    • Technology & Tools: Modern firms use digital audit tools, data analytics, and automated reporting for accuracy and efficiency. 
    • Sector Experience: Ensure the firm has experience in your industry—real estate, tech, retail, or financial services. 
    • Global vs Local Expertise: Global firms bring international standards; local firms offer deep UAE-specific insights. 
    • Audit Philosophy: Some firms focus on compliance only, while others provide advisory insights to improve business performance. 
    • Turnaround Time: Check how quickly they can complete audits and reports, especially if you have deadlines. 

    2. Questions to Ask Potential Audit Firms 

    Before signing on, ask these questions to understand their capabilities and approach: 

    • Have you worked with companies in my industry? 
    • How do you stay up-to-date with UAE regulations, VAT, corporate tax, and IFRS? 
    • What is your audit process and timeline? 
    • How do you handle communication and reporting with clients? 
    • Can you provide references or case studies from similar businesses? 
    • Do you offer advisory services in addition to audits? 

    3. Red Flags to Watch Out For 

    • Lack of Local Knowledge: Firms unfamiliar with UAE regulations may cause compliance risks. 
    • Hidden Fees or Unclear Pricing: Always clarify costs upfront. 
    • Poor Communication: Delays, unclear answers, or unresponsiveness indicate potential issues. 
    • Limited Technology Use: Manual audits may take longer and be prone to errors. 
    • No References or Reviews: A firm without verified client feedback should be approached cautiously. 

    Partner with Shuraa Tax – One of the Best Audit Firms in Dubai 

    As we’ve seen from the list above, Dubai has some of the best audit firms in the world – each with its own strengths. Global firms like Deloitte, PwC, and KPMG bring years of international experience and strong systems, while local experts like Shuraa Tax stand out for their personal approach and deep understanding of UAE laws and business practices. 

    When choosing an audit partner in Dubai, think about what your business really needs. The right firm will not just help you stay compliant, it will also guide you in improving your financial health, managing risks, and planning smarter for the future. 

    If you’re looking for a reliable partner who knows Dubai inside and out, Shuraa Tax is a name you can trust. We’ve been among the top audit firms in Dubai for many years, known for our honesty, accuracy, and expert local insights. 

    At Shuraa Tax, we offer complete financial and tax support, including: 

    Reach out to Shuraa Tax today for all your taxation and compliance needs in the UAE. 

    📞 Call: +(971) 44081900
    💬 WhatsApp: +(971) 508912062
    📧 Email: info@shuraatax.com

    Frequently Asked Questions 

    1. Why do companies need auditors in Dubai? 

    Auditors play a key role in keeping your business financially sound and compliant. Here’s how they help: 

    • Ensure financial statements are accurate and transparent 
    • Verify compliance with UAE accounting and tax laws 
    • Identify financial risks and irregularities 
    • Strengthen internal controls and financial management 
    • Build trust with investors, banks, and stakeholders 
    • Support long-term business growth and decision-making 

    2. How to choose the right audit firm in Dubai? 

    Consider reputation, industry experience, UAE regulatory knowledge, services offered, fees, technology use, and communication. Firms like Shuraa Tax combine local expertise with a full range of audit and taxation services. 

    3. What services do audit firms in Dubai typically provide? 

    Most firms offer audit & assurance, tax services (VAT, corporate tax), and advisory services like risk management, business strategy, and regulatory compliance. 

    4. What is the difference between a local and an international audit firm? 

    International firms bring global expertise, standards, and credibility, while local firms have in-depth knowledge of UAE regulations, free zones, and industry-specific compliance needs. 

    5. How often should businesses in Dubai get audited? 

    Most companies are required to have an annual statutory audit, though certain sectors may need quarterly reviews, internal audits, or specific regulatory checks depending on their license and free zone requirements. 

    6. How much does hiring an audit firm in Dubai cost? 

    Costs vary based on company size, complexity, and services required. While global firms may charge higher fees, local firms like Shuraa Tax offer competitive pricing with personalised service and deep UAE expertise. 

  • Tax Audit in UAE: How to Be Prepared for the Audit

    Tax Audit in UAE: How to Be Prepared for the Audit

    Facing a tax audit in the UAE? While it might sound daunting, it’s crucial to remember – preparation is key! Think of it like a friendly financial checkup to ensure your business aligns with the ever-evolving tax regulations of the UAE. Recently, the introduction of Corporate Tax has added a new layer to the compliance landscape, making it even more important to be proactive.

    A tax audit in UAE is conducted by the Federal Tax Authority (FTA) to determine if taxpayers have accurately reported their income and paid the correct amount of taxes.

    The FTA aims to prevent tax evasion and promote voluntary compliance, which ultimately contributes to the growth and development of the country.

    At Shuraa tax, we help ensure that you are fully compliant and prepared for any potential audit. Here we will provide you with valuable insights and practical tips on how to be prepared for a tax audit in the UAE. We will explain everything about Tax or VAT audit in the UAE, audit process, and provide advice on how to maintain accurate records and documentation.

    But first let’s understand – What exactly in Tax audit.

    What is Tax Audit in UAE?

    A tax audit in the UAE, often referred to as a VAT audit, is a process conducted by the Federal Tax Authority (FTA) to verify a company’s compliance with tax laws and regulations. This typically involves examining business records and financial statements to ensure accurate VAT reporting and payment.

    In recent years, the UAE tax landscape has undergone significant changes with the introduction of Value Added Tax (VAT) in 2018. This has increased the importance of tax audits as businesses and individuals need to adapt to the new tax regime and ensure their compliance with the law.

    Purpose of Tax Audit

    The main purpose of a tax audit is to:

    1. Verify compliance

    Ensure companies are correctly calculating and paying their taxes, including VAT and Corporate Tax (if applicable).

    2. Identify errors

    Detect any errors or discrepancies in tax reporting that could lead to underpayment of taxes.

    3. Maintain fairness

    Ensure a level playing field for all businesses by making sure everyone complies with the tax laws.

    4. Overall tax liability

    The audit aims to determine the correct amount of tax a company should be paying and identify any potential discrepancies.

    Who Can Expect a Tax Audit?

    While the FTA can select any company for an audit at any time, certain characteristics increase the likelihood of being chosen. Here’s who can expect a higher chance of facing a tax audit in the UAE:

    1. VAT registration

    All businesses registered for VAT are subject to potential VAT audit in the UAE.

    2. Corporate Tax

    Companies exceeding AED 50 million in revenue in a relevant tax period must undergo mandatory audits.

    3. Repeated inaccurate tax filings

    Consistent errors in calculations or reporting raise red flags for the FTA.

    4. Non-compliance with regulations

    Ignoring specific tax rules or deadlines increases the risk of an audit.

    5. Irregularities in financial reporting

    Suspicious inconsistencies or unexplained discrepancies in financial records attract scrutiny.

    6. Companies in high-risk industries

    Sectors with a history of tax evasion or complex transactions might be subject to more frequent audits.

    7. Companies with complex business structures

    Holding companies, subsidiaries, and intricate international operations involve higher scrutiny due to potential complexities in tax obligations.

    How to be Prepared for Tax Audit?

    Being prepared for a tax audit in the UAE is crucial, regardless of whether your company falls into a high-risk category or not. Here are some key steps you can take:

    1. Maintain accurate and complete records

    Keep all financial records, including invoices, receipts, bank statements, and accounting ledgers, organized and readily accessible. Maintain copies of all tax returns, payments, and correspondence with the FTA.

    2. Understand the relevant tax laws and regulations

    Familiarize yourself with the specific VAT or Corporate Tax (if applicable) laws and regulations that apply to your business. Stay updated on any changes or amendments to these laws.

    3. File your tax returns accurately and on time

    Double-check all calculations and information before submitting your tax returns. Meet all deadlines for filing and avoid any late penalties. Maintain copies of submitted returns for your records.

    4. Review of VAT Returns

    Businesses registered for VAT in Dubai must submit their returns electronically through the official FTA portal. This crucial process involves detailing sales, purchases, and calculated VAT amounts (both output and input) within designated fields of the online form.

    To achieve meticulous and timely filing, consider partnering with Dubai’s leading VAT consultants like Shuraa Tax for comprehensive tax audit services in Dubai.

    What are the Records to Be Maintained for A Tax Audit?

    The specific records you need to maintain for a tax or VAT audit in the UAE depend on several factors, including whether you’re registered for VAT, subject to Corporate Tax, and the type of audit you’re facing.

    • Invoices and receipts
    • Bank statements for the relevant period, both personal and business accounts
    • Accounting ledgers
    • Cash registers and POS records, including daily summaries and receipts
    • Inventory records
    • Copies of all filed tax returns, including VAT returns and Corporate Tax returns
    • Records of all tax payments made to the FTA
    • Copies of all communication exchanged with the FTA, including audit notices, inquiries, and responses
    • Supporting documents for expenses
    • Details of Goods imported
    • Contracts and agreements related to your business activities
    • Asset registers
    • Salary slips and payroll records
    • Specific Industry Requirements

    This is not an exhaustive list, and the specific requirements might vary depending on your situation. It’s highly recommended to consult with a qualified auditor or tax consultant in Dubai who can advise you on the specific records you need to maintain based on your unique circumstances and ensure you comply with all FTA regulations.

    Tax Audit Procedure in the UAE

    1. Notifications

    The FTA usually informs the company about the audit at least five days before the scheduled date. This notification includes details like the audit schedule, location, involved parties, and reason for the audit (if any).

    2. Opening Meeting

    The auditor(s) and the company representatives meet at the designated location and time. The auditor explains the audit scope, timeline, and required documents.

    3. Information Gathering

    The auditor examines various documents, including:

    • Financial statements
    • Tax returns
    • Invoices and receipts
    • Bank statements
    • Supporting documentation for claimed expenses and deductions

    The auditor may also:

    • Interview key personnel
    • Inspect assets on-site
    • Request additional information or documents

    4. On-site Audit

    The FTA auditor(s) will visit the company’s premises or a mutually agreed location. They may:

    • Review records and documents
    • Interview employees
    • Inspect assets
    • Request additional information

    5. Post-Audit

    The auditors will prepare a draft report outlining their findings and any potential adjustments to the company’s tax liabilities. The FTA will issue a final report with their conclusions and any adjustments to tax liabilities. If you disagree with the findings, you can appeal the report to the FTA.

    Penalties for Non-compliance

    The FTA in the UAE imposes various penalties for VAT and Tax non-compliance identified during an audit. These penalties aim to encourage accurate reporting and discourage intentional tax evasion.

    Late filing of VAT return: AED 1,000 for first offense, AED 2,000 for repeat offenses within 24 months.

    Incorrectly filed VAT return: AED 3,000 for first offense, AED 5,000 for repeat offenses.

    Underpayment of tax:

    • 2% penalty on unpaid tax amount due immediately after the deadline.
    • 4% penalty on unpaid tax amount due on the seventh day following the deadline.
    • 1% daily penalty on remaining unpaid tax starting one month after the deadline, capped at 300%.

    Failing to register for VAT when required: AED 20,000.

    Failing to pay tax on behalf of another person: 2% penalty on unpaid tax amount due immediately, followed by 4% monthly penalty and capped at 300%.

    Failing to comply with FTA requests: Up to AED 20,000 per offense.

    These are just some of the main penalties, and the specific amount may vary depending on the nature and severity of the non-compliance.

    Know more about: VAT Penalties in the UAE and how to avoid it

    It’s crucial to consult with a qualified tax professional for accurate and personalized advice.

    Do’s and Don’ts for a UAE Tax Audit

    • Maintain accurate and organized financial records, tax documents, and supporting documentation for at least 5 years.
    • Consider digitizing records for easier retrieval and accessibility during an audit.
    • Understand and correctly apply different VAT rates (5%, 0%, exempt) for various transactions.
    • Double-check all calculations for input and output VAT, ensuring accuracy.
    • Ensure all exempt and zero-rated transactions are properly recorded and reported.
    • Claim input VAT only for eligible expenses and have supporting documentation.
    • Register for VAT if your taxable supplies exceed AED 375,000 annually.
    • Notify the FTA promptly of any changes in your business activities or tax status.
    • Stay updated on the latest VAT and Corporate Tax regulations, especially changes or amendments.
    • Consider consulting a qualified tax consultant or auditor, especially for complex situations.

    Read more: Stock Audit Services in Dubai

    Secure Your Tax Future with Shuraa

    Being prepared for a tax audit in the UAE is crucial for individuals and businesses. It is essential to have all necessary documents and records organized and readily available. However, taxation in the UAE, especially with recent changes, can be complex.

    Seeking tax consultation and advice from a reputable consultant, such as Shuraa Tax, can be extremely beneficial in ensuring compliance with tax regulations and optimizing tax strategies.

    Our team of specialists offers comprehensive VAT, tax management, tax audit service, accounting services, and more across Dubai and other Emirates. We go beyond just compliance, providing insights and strategies to optimize your tax position and ensure long-term financial health.

    Don’t wait for an audit to seek guidance. Contact Shuraa Tax today at +971508912062. You can also drop us an email at info@shuraatax.com. Remember, peace of mind in tax matters is invaluable. Let us help you achieve it.

  • How to Apply for UAE VAT Reconsideration

    How to Apply for UAE VAT Reconsideration

    If you run a business in the UAE, you’re probably already familiar with VAT (Value Added Tax). Introduced in 2018, VAT is a 5% tax applied to most goods and services in the country. It’s managed by the Federal Tax Authority (FTA), and staying compliant is a must for all registered businesses. 

    But what happens if the FTA makes a decision you don’t agree with – like rejecting your VAT registration, imposing a fine, or assessing tax incorrectly? That’s where UAE VAT Reconsideration comes in. It’s a process that allows you to formally ask the FTA to review and possibly reverse a decision. 

    Knowing how VAT reconsideration works can really help protect your business. Whether you’re facing unexpected penalties or think a mistake was made on your tax status, applying for reconsideration could make all the difference. 

    However, timely and accurate submission of a reconsideration request is essential, as the FTA stipulates specific procedures and deadlines for such appeals. 

    What is VAT Reconsideration in the UAE? 

    VAT Reconsideration enables taxpayers to challenge specific decisions made by the FTA concerning VAT issues. This could include disagreements over VAT registration rejections, penalties imposed, or assessments made. By submitting a reconsideration request, the taxpayer seeks a re-evaluation of the FTA’s decision, providing justifications and supporting documents to substantiate their case. 

    The FTA is responsible for reviewing reconsideration requests submitted by taxpayers. Upon receiving a valid request, the FTA examines the details, assesses the justifications provided, and determines whether the original decision should be upheld or amended. 

    Legal Basis for UAE VAT Reconsideration 

    The right to request a VAT reconsideration is grounded in the UAE’s tax legislation. Specifically, Article 27 of the Federal Decree-Law No. 7 of 2017 on Tax Procedures allows any person to submit a reconsideration request to the FTA regarding decisions issued by the Authority. This provision ensures that taxpayers have a legal avenue to seek redress and promotes accountability within the tax system. 

    When Can You Apply for VAT Reconsideration? 

    You may consider applying for UAE VAT Reconsideration in the following scenarios: 

    1. VAT Registration Issues 

    If your application for VAT registration or deregistration is rejected—despite meeting the threshold or fulfilling the required conditions, you can request the FTA to review its decision. This is common for new businesses or those closing operations.

    2. Penalties and Fines

    If you have been issued penalties for late submission of returns, failure to pay VAT on time, or other compliance issues—and you believe these penalties were applied unfairly or due to reasonable circumstances, you can apply for reconsideration. 

    3. Tax Assessments 

    If the FTA has assessed a higher VAT liability than expected—perhaps due to misunderstanding or errors in your submitted returns, you can request a reassessment with supporting documents.

    4. VAT Refund Claims

    If your claim for a VAT refund has been partially or fully rejected and you believe you’re entitled to the full amount, a reconsideration request allows you to challenge the decision. 

    5. Voluntary Disclosure Rejections 

    If you’ve tried to correct an earlier VAT return using a Voluntary Disclosure and the FTA rejected it or imposed a penalty, you can request a review if you have valid justifications or supporting evidence.

    6. Errors in Administrative Decisions

    Sometimes the FTA may issue decisions that are based on misinterpretation, incomplete data, or technical errors. If you believe any administrative decision has been made unfairly or incorrectly, you have the right to appeal.

    7. Input Tax Rejections

    If the FTA has disallowed part or all of your input tax claim (for example, claiming VAT on expenses), and you believe the expenses were eligible, you can file for reconsideration with clear documentation and reasoning. 

    8. Tax Grouping Application Denied 

    If your request to form a VAT tax group with other related companies has been rejected by the FTA, despite fulfilling the conditions, you can seek a review of this decision. 

    Timeframe for Filing 

    It’s crucial to act promptly. You must submit your reconsideration request within 40 business days from the date you received the FTA’s decision. Missing this deadline may result in your request being rejected. 

    This extension from the previous 20 business days was implemented through amendments to the UAE Tax Procedures Law. After receiving your reconsideration request, the FTA is required to review and issue a decision within 40 business days, and notify you of the outcome within 5 business days of issuing the decision.  

    If you remain dissatisfied with the FTA’s decision, you may escalate the matter to the Tax Disputes Resolution Committee (TDRC) within 40 business days of receiving the reconsideration decision. 

    Eligibility Criteria for UAE VAT Reconsideration 

    To apply for VAT reconsideration in the UAE, certain conditions must be met. The Federal Tax Authority (FTA) only accepts requests from individuals or businesses that are directly impacted by a tax-related decision. Here’s who can apply:

    1. Registered Taxpayers

    Any individual or business that is registered for VAT with the FTA. 

    2. Applicants Affected by an FTA Decision 

    If the FTA has issued a decision that directly impacts you or your business, such as a rejected registration, a fine, or a denied refund—you are eligible to apply. 

    3. Authorized Representatives 

    A tax agent or legal representative authorized to act on behalf of the taxpayer may also file the reconsideration request. 

    Requirements for Filing a Reconsideration Request 

    To submit a reconsideration request, the following criteria must be met: 

    Timeframe 

    The request must be filed within 40 business days from the date of notification of the FTA’s decision. 

    Language 

    All applications and supporting documents must be submitted in Arabic. 

    Documentation 

    Provide all relevant documents supporting the request, such as factual and legal grounds, tax advice received, and any other pertinent evidence. 

    Submission Platform 

    Requests should be submitted through the FTA’s e-services portal. Registered users can access the “Registered Reconsideration” tab, while non-registered users should use the “Non-Registered Reconsideration” tab. 

    How to Apply for UAE VAT Reconsideration? 

    If you disagree with a decision made by the Federal Tax Authority (FTA) regarding VAT matters, you can request a reconsideration. Here’s how: 

    Step 1: Log in to the FTA e-Services Portal 

    • Visit the official FTA website: www.tax.gov.ae 
    • Click on “e-Services” and log in with your registered username and password. 
    • If you don’t have an account, you will need to register first to access the services. 

    Step 2: Access the Reconsideration Section 

    Navigate to the “Reconsideration” tab on your dashboard. 

    Choose the appropriate option: 

    • Registered Reconsideration: For VAT-registered users. 
    • Non-Registered Reconsideration: For users not registered for VAT. 

    Step 3: Initiate a New Reconsideration Request 

    Click on “New Reconsideration Request.” 

    Fill in the required details, including: 

    • The FTA decision reference number. 
    • The category of your request (e.g., penalty, registration). 
    • A detailed explanation of why you believe the decision should be reconsidered. 

    Step 4: Attach Supporting Documents 

    Prepare and upload the necessary documents, such as: 

    • A formal letter explaining your case (must be written in Arabic). 
    • A copy of the FTA’s original decision you’re disputing. 
    • Business trade license, Emirates ID, or any other identification documents if applicable. 
    • Additional documents supporting your position (e.g., payment proof, VAT returns, invoices, or any correspondence with the FTA). 

    Step 5: Review and Submit 

    Carefully review all entered information and attached documents. Confirm that all details are accurate. Submit the reconsideration request. 

    Step 6: Await FTA’s Response 

    The FTA will review your application and typically respond within 45 business days. You will be notified of the outcome via your registered email or through the e-Services portal. 

    For a hassle-free process, consider using professional VAT reconsideration services in UAE to ensure everything is submitted correctly and on time. 

    Documents Required for VAT Reconsideration Application 

    When submitting a VAT reconsideration request to the UAE Federal Tax Authority (FTA), it’s essential to provide specific documents to support your application. 

    Detailed Explanation Letter: 

    A comprehensive letter in Arabic outlining the reasons for requesting reconsideration. Include factual and legal grounds, referencing relevant laws or FTA guidelines.  

    Supporting Evidence: 

    Documents that substantiate your claim, such as: 

    • Contracts or agreements related to the transaction. 
    • Invoices, payment receipts, or bank statements. 
    • Correspondence with the FTA or other relevant parties. 
    • Any other documentation that supports your case. 

    Copy of the FTA Decision: 

    The official decision issued by the FTA that you are contesting.  

    Identification Documents: 

    • For individuals: A copy of a valid passport or Emirates ID. 
    • For businesses: Trade license, VAT registration certificate, and any other relevant business documents. 

    Authorization Letter (if applicable): 

    If a representative is submitting the request on your behalf, include a notarized Power of Attorney or authorization letter. 

    Translation of Documents: 

    All documents must be submitted in Arabic. If original documents are in another language, provide certified Arabic translations. 

    Make VAT Reconsideration Simple with Professional Support 

    Filing for UAE VAT reconsideration is essential if you disagree with a decision from the Federal Tax Authority (FTA), such as a fine, penalty, or VAT registration issue. It’s essential to submit your application on time and make sure everything is accurate to avoid any delays or problems. 

    Getting professional help can make the process a lot easier. Tax consultants like Shuraa Tax can help you write your justification letter in Arabic, ensure all your documents are in order, and present your case clearly to the FTA. With the right support, you’ll have a better chance of resolving your issue quickly. 

    If you need assistance with VAT reconsideration, feel free to reach out to Shuraa Tax. Our team of experts is ready to guide you and make sure everything is handled properly so you can focus on running your business. 
    Contact us today for personalised assistance: 

    📞 Call: +(971) 44081900 

    💌 WhatsApp: +(971) 508912062 

    📧 Email: info@shuraatax.com 

    Frequently Asked Questions 

    1. What are VAT penalties and reconsiderations in Dubai? 

    VAT penalties are fines imposed by the Federal Tax Authority (FTA) for non-compliance, such as late returns or payments. Reconsideration is the process of requesting the FTA to review and possibly reverse a decision or penalty. 

    2. Can I apply for VAT penalty reconsideration in Dubai? 

    Yes. Both registered and non-registered individuals or businesses affected by an FTA decision can apply for reconsideration within 40 business days of receiving the decision. 

    3. How do I apply for VAT reconsideration? 

    Submit your request through the FTA’s e-Services portal. Registered users should use the “Registered Reconsideration” tab, while non-registered users can access the “Non-Registered Reconsideration” section. 

    4. What is the deadline to submit a reconsideration request? 

    You must file the reconsideration request within 40 business days from the date you were notified of the FTA’s decision. 

    5. Can I request a penalty waiver along with the reconsideration? 

    Yes. You can submit a penalty waiver request alongside your reconsideration application if you believe the penalty was unjust or due to valid circumstances. 

    6. What happens if I’m not satisfied with the FTA’s reconsideration decision? 

    If you’re dissatisfied with the outcome, you can escalate the matter to the Tax Disputes Resolution Committee (TDRC) within 40 business days of receiving the reconsideration decision.