Corporation Tax Audit

Who needs corporate tax audit in UAE?

According to the Ministerial Decision No.82 of 2023, Applicable Taxable Persons should prepare and maintain audited financial statements for corporate tax if it meets certain requirements below:

1. A Taxable Person earning Revenue exceeding AED 50,000,000 (fifty million UAE dirhams) during the relevant Tax Period.
2. A Qualifying Free Zone Person.

It's crucial to remember UAE's corporate tax audits are not performed at random but instead in accordance with the previously mentioned criteria. To prevent the possibility of fines or penalties related to a tax audit, businesses should ensure that they are complinant with the tax regulation and law.

Benefits of corporate tax audit in UAE

The purpose of a corporate tax audit is to ensure that companies are paying the correct amount of tax and following the regulations set by the Federal Tax Authority (FTA) in the UAE. Companies that fail to comply with tax regulations may face corporate tax penalties or legal action.

Here’s how auditing your documents for corporate tax benefits you:

• An essential tool for locating flaws in an organization's accounting systems and recommending improvements. 
• In addition, an audit gives assurance to the directors that accounting tasks are operating in accordance with UAE's law. This may lessen the opportunity for fraud and dishonest accounting techniques.
• An audit also makes it easier to give advice that can help a business in perceptions of the operation of the company, anticipated margins, and methods for achieving them. The recommendations range from improving internal controls to lowering the risk of scams or tax planning.
• Regular audits can improve the veracity and accuracy of the information provided to potential buyers, which can be especially helpful for owner-managers who intend to sell their company within the next three years.