Tax Precautions Every UAE Business Should Take

1. Be registered before you need to be

VAT registration is mandatory once taxable supplies pass AED 375,000 over 12 months, under Article 7(1) of the Executive Regulation. You then have 30 days to apply.

Corporate Tax registration deadlines came from FTA Decision No. 3 of 2024, keyed to the month your trade licence was issued.

Neither deadline moves because you were busy.

2. Never charge tax you are not registered to charge

Putting 5% on an invoice without a valid TRN is not an administrative slip. You have collected money as tax with no authority to collect it.

If this has happened, stop invoicing that way today and take advice before you file anything.

3. Watch the AED 3,000,000 line

Small Business Relief applies where revenue does not exceed AED 3,000,000, under Article 21 of the Corporate Tax Law and Article 2(1) of Ministerial Decision No. 73 of 2023.

Cross it once and you cannot elect the relief again, even in a later year when revenue falls back. A single asset sale can push you over.

Know where revenue will land before the year closes.

4. Do not elect Small Business Relief in a loss year

Article 4 of that decision cancels the tax losses of any period in which you elect. Article 5 does the same to net interest expenditure.

You had no tax to pay in a loss year anyway. Electing gives up a future deduction for no benefit.

5. Settle your intercompany balances

If you own more than one company and they invoice each other, Article 34 of the Corporate Tax Law applies to you.

The FTA's Transfer Pricing Guide treats a related party balance left outstanding well beyond agreed terms as a loan requiring arm's length interest. Their example runs to 400 days.

Old, unmoved intercompany balances are normal in UAE groups and are now an exposure.

6. Keep the document with the entry

Both taxes are evidenced, not asserted. An entry with no invoice behind it is not support.

Attach documents as you post. Reconstructing eighteen months later usually means not finding them.

7. Reconcile VAT to your accounts before you sign

Your VAT returns and your financial statements come from one ledger. If revenue in the four returns does not agree to revenue in the accounts, one has been filed wrong.

Check this before the accounts are signed, not after.

The precaution behind all seven

Decide your positions during the year, not in the filing week. Every item above is cheap to handle early and expensive to handle late.

What this does not cover

Excise tax, economic substance, and country-by-country reporting apply to specific businesses and are not covered here.

This is general information on published law, not advice on your position.

If you want your exposure checked

Send us your trial balance, your last four VAT returns and your CT registration details.