Value Added Tax (VAT) is a new addition to business operations in the UAE, effective from January 2018. With the growth of businesses and complexity of transactions, being VAT compliant is increasingly becoming crucial. A key aspect of this compliance is being VAT-Audit ready in UAE – an audit carried out by the Federal Tax Authority (FTA) to verify that the VAT in UAE return, and reporting has been filed correctly. 

Whether you are a small enterprise or a large corporation, understanding the VAT audit procedure in UAE and preparing for it in advance is crucial. Preparation through approved tax consultants in Dubai such as CBM Consultants makes the process easier, and this guidance ensures that issues with VAT compliance in Dubai, UAE can be handled without much hassle. 

 

Understanding of VAT audit in the UAE 

VAT Audit in UAE is an official examination conducted by the Federal Tax Authority (FTA) to check the accuracy of a company’s VAT records, returns, and the like financial statements. The objective is to prevent any businesses from overcharging VAT or underpaying it or worse failing to pay VAT as per UAE VAT legislations. 

Common VAT audit triggers in Dubai, UAE are as follows: 

• VAT return or payment late respectively. 

• Major discrepancies in tax filings. 

• FTA has certain agencies that randomly select to audit. 

Understanding these triggers sets companies up early and helps them get ahead and audit ready. 

 

The UAE FTA conducts two types of VAT audit: – 

1. Desk audit: This is a remote, on-paper, review. Businesses need to report VAT documents to the FTA to review and verify compliance.  
2. Field Audit: It is a more detailed process and includes a visit to business premises by FTAs for system inspection. This could involve interviews with staff and on-site investigations. The field audit intends to go deeper to assess VAT compliance practices in Dubai. 

 

Why UAE Businesses Should Prioritize VAT Audit 

• Verify that the company is in compliance with the VAT system in the UAE 

• Prevents hefty penalties and interest 

• Assists in highlighting any potential errors or anomalies in UAE VAT returns 

• Facilitates reliable and transparent financial reporting 

• Establishes a positive reputation with FTA and government authorities 

 

 

VAT Audit Requirements 

To ensure your business is prepared, it’s essential to maintain the following: 

• Tax invoices and credit notes 

• VAT returns filed with the FTA 

• Records of supplies, imports, and exports 

• Accounting books and ledgers 

• VAT registration certificate 

• Payment proofs and reconciliation statements 

• Records maintained for at least 5 years (or 15 years for real estate) 

 

 

How to Prepare for a VAT Audit in UAE: 

Preparing a VAT audit is not a one-time task—it involves ongoing compliance. Here are some best practices: 

• Maintain Accurate Records 

Make sure all invoices, credit notes, and ledgers are current and in FTA application formats. 

• Reconcile VAT Returns 

Reconcile your books to your VAT returns often, to uncover anomalies and correct errors promptly. 

• Review Compliance Periodically 

Organize regular in-house exercises or hire experts for VAT auditing in UAE, in order to evaluate your health compliance. 

• Understand Applicable VAT Rules 

Keep an eye on FTA regulations, thresholds and VAT rates—particularly if you handle cross-border transactions or transactions in real estate. 

• Engage a VAT Consultant 

Think of hiring a professional to help you out with the documentation, filings and answering the queries of the FTA, like a genuine VAT Consultant or firm providing VAT audit services in UAE.
 

 

Step-by-Step VAT Audit Procedure in UAE 

Here is an outline of the typical VAT audit process in UAE: 

• Notification by FTA 

Businesses are typically notified in writing (or by e-mail) a few weeks or sometimes a few months before an audit. 

• Preparation of Documents 

You would have to have all your documents that relate to VAT, such as your VAT return, invoices, and reconciliations. 

• FTA On-Site/Remote Audit 

The FTA could visit your operation in person or ask for electronic documents for a review. 

• Review of Compliance 

The auditors determine whether or not VAT has been properly accounted for, paid, and recorded. 

• VAT Audit Report & Feedback 

After the audit, the FTA also should provide a report showing discrepancies, requesting clarification or penalties, if applicable. 

 

VAT Audit Preparation under CBM Guidance 

To ensure compliance with the VAT rules in the UAE, it is crucial for businesses to seek assistance from FTA compliant VAT service providers. Choose CBM Consulting for expert VAT Audit Services in the UAE. Our VAT consultants ensure FTA compliance, guiding businesses through the intricate VAT landscape. Stay informed, avoid penalties, and contribute to UAE’s growth with CBM Consulting – your trusted partner for VAT Audit services in the UAE.   

 

Best Practices for a Smooth VAT Audit Procedure: Tips for Success 

Let’s look at the core steps for conducting a smooth VAT audit process in Dubai. 

• Maintain open communication with auditors. 

• Provide documents promptly and accurately. 

• Be transparent and cooperative throughout the entire process. 

• Ensure your staff is trained to handle auditor inquiries. 

• Keep detailed records of all interactions. 

This approach minimizes stress and helps resolve any issues efficiently. 

  

Conclusion: 

Preparing for a VAT audit in UAE isn’t necessarily about running around at the last minute to find documents—it’s about creating a culture of compliance, accuracy and transparency. And with adequate preparation, proactive record-keeping, and valuable support from VAT experts, such as VAT consultancy services, your organization will be able to coast through the VAT audit and avoid penalties. 

If you’re searching for trustable VAT Audit Services in the UAE, then find seasoned professionals who understand UAE’s changing tax landscape and will leave you fully prepared for your next FTA audit. 

Overview of VAT in the UAE 

The VAT, a consumption tax, was implemented in the United Arab Emirates (UAE) on January 1, 2018, with a standard rate of 5%. The FTA implements Value Added Tax (VAT), with the functions to enforce and achieve robust rates for both infrastructure and service-related revenue. It would also advise companies on VAT registration, return filing, and record-keeping. 

If you operate a business in the UAE, understanding how to register for VAT is important for compliance and credibility. In this blog, we’ll guide you on the VAT registration process, look at VAT registration threshold UAE and all that you want to know about FTA VAT registration whether you are in Dubai or somewhere else in the UAE. 

 

What is VAT Registration? 

VAT registration is the act of registering your business with the state as being involved in supply and selling. When a business gets registered with the FTA to charge, it can collect and remit VAT for the supply of taxable goods and services. A VAT registration certificate will be issued to the business upon registration and this certificate indicates the VAT tax registration number (perhaps also referred to as a VAT TRN registration number) allocated to the business and which should be quoted on all tax invoices. 

 

VAT Registration Criteria: 

Mandatory VAT Registration Threshold UAE: 

• Businesses with taxable supplies and imports exceeding AED 375,000 annually must register for VAT. 

Voluntary VAT Registration: 

• Businesses with taxable supplies  exceeding AED 187,500 may choose to register voluntarily. 

 

VAT Registration Requirements: 

Before you can begin registering for VAT voluntarily, you need to assemble a number of documents that contain the information you’ll be asked to share about your business. Below you will find a list of the documents the FTA needs to see to confirm your information and meet the regulations. 

• Trade License Copy, confirming your legal existence in the UAE. 

• The owner’s or the partners’ passports, required for identity purposes.  

• Owner and partners Emirates ID, used for further identification and residence confirmation. 

• Memorandum of Association, which will lay out how your business is organized and what it is set up to do. 

• Bank details of your company, these are required for VAT refund, other tax data and/or information of your company. 

• Description of business activities, which lets the FTA determine what you are doing and how does it impact VAT obligations. 

 

VAT Registration Process: 

Below are the necessary procedures you need to go through for voluntary VAT registration in UAE: a) Prepare and Organize Before you apply, make sure that you have all the documents and information required so that you can get 

• Pre-Registration Analysis: Conduct a detailed pre-registration analysis to determine when voluntary registration applies. Consider current turnover, growth expectations, and benefits of VAT registration. 

• Create a tax group: If your business is part of a corporate group of companies consider setting up a tax group for the purposes of VAT. This should simplify VAT registration and ease compliance of the VAT group.  

• Online registration: You will need to have an account on the FTA website to initiate the VAT registration. This is an easy process where you will have to enter some fundamental information about your business, including your business name, where you are located, how someone can get in contact with you, as well as your bank details.  

• Prepare supporting documents: All documents must be ready including business license, financial reports, passport copies, Emirates ID, MOA, bank account details, and business activity overview. 

• Apply and wait for the application: Fill in the VAT registration in the FTA e-Services portal. The FTA will assess the application and relevant criteria, which can take up to 20 working days. Upon approval, the FTA will issue a VAT registration certificate and VAT registration number (TRN). 

 

Let CBM Consultants be your Trusted Guide: 

CBM Consultants streamline the VAT registration process in the UAE for your business. Our experts handle everything from eligibility assessment to documentation submission, ensuring your compliance with local VAT regulations. With CBM Consultants, you receive thorough support and guidance, making VAT registration services straightforward and stress-free, so you can concentrate on running your business efficiently.   

 

Common Mistakes to Avoid: 

• Misunderstanding the Registration Thresholds 

Businesses often miscalculate turnover compared to VAT registration limits. Track turnover closely, considering all taxable supplies. Verify if you reach mandatory or voluntary registration thresholds. 

• Incomplete or Incorrect Documentation 

To prevent delays or rejections in the application process, ensure all necessary documents are completed and double-checked for errors and omissions. 

• Late Registration 

Lately registering VAT can lead to fines and backdating, so it’s crucial to avoid unnecessary scrambling at the last minute. 

• Failing to Update Registration Details 

Traders often neglect updating VAT registration details due to changes in business structure or activities. Regular updates are crucial to avoid discrepancies with taxable activities. 

 

Conclusion: 

VAT in the UAE does not have to be daunting. Having knowledge of how to register for VAT and meeting the VAT registration rules can help you stay compliant and prevent penalties. Whether you are a startup or a networking company in Dubai, and you’re looking into the VAT registration UAE process and the VAT registration certificate online process, if you’re prepared, this is going to be a walk in the park for you! 

If you have not registered yet, you should now check if you crossed the VAT registration threshold in UAE and begin your FTA VAT registration process today. 

In the dynamic business world of today, outsourcing accounting and tax services in UAE is vital for businesses that want to perform better by concentrating on the aspects of operations that separate them from the competition as well as ensuring they remain compliant. The right outsourcing partner aside, regardless of whether you are a small, medium, or large-scale corporation, it can be extremely difficult to find the right help in understanding the intricate and varied rules and regulations in the UAE. Effective management of your business finances is crucial for success. Yet, it can also be a major drain on your resources. That’s where outsourced accounting services come in as a strategic solution. By delegating your financial operations to experts from an outsourcing provider, you can simplify your business processes and reduce overhead costs. 

This guide enables businesses to access high-quality accounting services without the need for in-house resources, thereby reducing costs and enhancing efficiency. It’s like having a remote team of accounting experts who handle all your financial processes. 

 

What is Accounting and Tax Outsourcing? 

Accounting and tax outsourcing in Dubai, UAE is the art of recruiting independent accountants or accounting firms to handle certain aspects of company’s financial works, such as recording transactions, preparing financial statements, VAT filing, payroll, tax returns etc. As part of all the stringent financial norms and tax legislations in the UAE, organizations need to maintain the finances right and correct. 

Outsourcing accounting and tax help companies concentrate on their business while meeting the challenges of accurate financial information, cost effectiveness and compliance with UAE tax laws, which also entails VAT and corporate tax laws. 

 

Who Should Consider Complete Outsourcing? 

• Startups & SMEs lacking in-house expertise 

• International businesses entering the UAE market 

• Family-owned businesses looking for transparency and growth 

• Free Zone companies needing VAT and tax support 

 

 

Why is Outsource Accounting and Tax Beneficial? 

The business-friendly tax system of the UAE offers 0% corporate tax for eligible entities in free zones, paired with 9% being the federal corporate tax applicable on the rest of the companies, it still needs compliance attention to detail. Whether complying with VAT rules or submitting corporate tax, companies must remain aware of what is expected of them by law, all the while ensuring they keep good accounts. 

To entrust the finances of your business to a third party is a big step for an SME founder. Many business owners struggle to let go of key functions, and that’s understandable. If it is outsourced to the professional, there is compliance with the concerned laws along with savings on cost, risk management, and financial transparency. 

Benefits of Outsourcing Accounting and Tax: 

By outsourcing accounting tasks, your team can focus on their core competencies, ensuring your business stays competitive and agile. Here is how it can be proven beneficial for your business: 

• Expertise & Accuracy: The professional companies are up to date on all the UAE tax law and international practices. 

• Cost Effective: Eliminates the need for full-time accountants and tax consultants. 

• Save Time: Allows business owners more time to concentrate on strategy aspects. 

• Risk Reduction: Minimize the risk of penalties for non-compliance or inaccurate filing. 

 

Top Services Offered in UAE by Outsourcing Firms 

Many leading providers offer top tax and accounting services in Dubai and across the UAE, including: 

• Cloud Accounting Software  

Xero is a cloud accounting system designed for small and medium-sized enterprises, offering features like receipt capture, bank transaction reconciliation, and faster payment, enabling business growth and improved financial visibility.  

• Management Accounts & Analysis 

To keep your business moving forward, it’s crucial to regularly review numbers and data from an outsourced accounting firm. Establish KPIs and analyze spending against the budget, repeating this process on a monthly or quarterly basis.  

• VAT returns 

Outsourced accounting partners must determine appropriate VAT schemes for businesses, communicating with HMRC, and submitting timely returns, preferably far in advance of major deadlines. 

• Company secretarial 

This includes doing a name check of the proposed company name and registering your business with Companies House. It also involves ensuring that all mandated filings are made on time. That should be covered as well, if there are future changes in shareholders or directors. 

• Payroll 

Organizations ensure employees never lose their pay slips by making them accessible at all times, with an outsourced payroll partner ensuring timely payments and employee awareness.  

• Statutory Accounts 

Outsource accounting partners should be Chartered Certified Accountants, producing the latest technical accounts and required to undergo annual technical training to stay ahead of accounting standards and tax changes. 

 

Choosing the Right Tax Consultants in Dubai 

By working with experienced tax advisers in Dubai, you can guarantee your financial structures are managed professionally and sensibly in respect of local rules. Look for firms that: 

• Have enrolled with the FTA 

• Demonstrate solid experience in your industry 

• Provide real time financial visibility and integration with accounting software 

• Fulfill all your tax and accounting needs 

 

How is CBM the Right Choice for Outsourcing? 

At CBM, we go above and beyond for our clients. We always make sure that you get: 

• Access to the best technologies in the field of accounting and finance 

• Cloud-based solutions 

• Proven and streamlined processes 

• Constant control 

• Access to a highly experienced team 

• Visibility to methods and metrics for measuring success 

• Ability to provide detailed financial reports 

We provide all of these services and more. Not only can CBM Consultants act as a trusted outsourcing accounting partner, but we can also help to make your business’ finances more sustainable and offer advice on how to grow your business. 

Our intrinsic knowledge of the taxes most likely to affect your business allows us to deliver wins for our clients; be that CIS or R&D tax credits. 

 

Final Thoughts  

The UAE’s constantly evolving tax system means it’s crucial for businesses to keep up. Outsourcing your accounting and tax in UAE is not just a luxury anymore it is crucial for growth while ensuring the legality of your operations. 

Through the best practice advice provided by top service providers, a company can not only fulfill its statutory duties, but it can also learn more about its business, ultimately making smarter decisions.  

With the continuous developments of the business landscape in the UAE, the pressures of keeping accurate financial records, VAT compliance, and maintaining an efficient tax position is real for many companies in the region. Whether you are an entrepreneur starting a new venture, a fledgling or mature SME, or a large enterprise looking to grow or access new markets, accounting supervision services in the UAE, and particularly in Dubai, have never been more important for a sustainable future and compliance requirements. 

 

What Are Accounting Supervision Services? 

Accounting Services in UAE can be beneficial for businesses, as they provide professional accountants to review company records and reports periodically. These services help management assess the business’s operations and compliance, enabling them to make informed decisions about future finances. They can also be an alternative to traditional accounting methods or outsourcing accounting services. The importance of following UAE rules and regulations is well-known. Unlike outsourced full-time accounting, supervision services are a cost-effective way to ensure your in-house team is aligned with UAE regulations while having access to professional expertise on-demand. 

 

Why Businesses in Dubai Choose Accounting Supervision Services 

As a commercial hub, Dubai has thousands of businesses that require proper, structured financial reporting. Here are the reasons why accounting supervision services in Dubai are in high demand. 

•  Regulatory Compliance: Professionals will ensure that your business meets all the regulatory compliances as they have knowledge of the UAE statutory requirements, especially VAT and Corporation Tax. 

• Cost-Effective: This service is cheaper than hiring a professional (fulltime staff! This is particularly important for SMEs who will benefit greatly from streamlining costs and processes. 

•  Risk Management: Having these services rendered independently can uncover financial mistakes early, instead of costing your organization. 

•  Strategic Advice: Accounting supervisors often provide valuable suggestions and advice that positively impact your budgeting, forecasting, and cash flow management. 

 

How It Benefits Small Businesses 

Accounting for small businesses in the UAE can be complex due to evolving tax structures, reporting standards, and strict penalties for non-compliance. Supervision services help small enterprises in: 

• Preparing financial reports professionally meeting all the regulatory compliances 

• Preparing tax invoices, meeting all VAT regulations 

• Ensuring timely preparation and filing of VAT and Corporation Tax Returns 

• Training in-house staff to follow accounting best practices 

 

Top Accounting Services in UAE: What to Expect 

Finding the best accounting services in UAE means selecting experts who can offer all the following: 

• Monthly or quarterly reviewing of financial statements  

• Reviewing of accounting entries and compliance  

• VAT and corporate tax supervision  

• Internal control reviews  

• On-demand financial consultation  

Whether a newly growing startup or an established brand, supervision services offer another layer of protection that guarantees your in-house accounts team is functioning under international and UAE diesel gas standards. 

 

Why is CBM the best option for Accounting Services? 

CBM Consultants supports your company by managing bookkeeping, VAT, corporate tax compliance, financial reporting, auditing support, and provides business advisory. With the expertise and our professional services, we also support payroll in accordance with UAE laws, provide cloud accounting solutions and internal controls to manage financial risks — and we will do this all while ensuring full regulatory compliance and financial transparency. 

Choose CBM, Your Trusted Accounting Partner! 

 

Understanding Accounting Services Dubai Price 

The accounting services Dubai price varies based on your business size, complexity, and frequency of supervision. On average: 

• Monthly supervision: AED 1,000 to AED 3,000 

• Quarterly review: AED 2,500 to AED 5,000 

• VAT return filing assistance: AED 500 to AED 1,000 per return 

Packages are often customized, especially for small businesses that may need lighter but consistent oversight. 

 

Conclusion

Whether you are an early-stage startup navigating with the complexities of compliance or an established business planning on scaling their operations, accounting supervision services in Dubai give you peace of mind, visibility in your financial health and direction. With the increasing VAT and tax responsibilities, there has never been a better time to align yourself with a trusted accounting services company in the UAE. Investing in the best accounting services in UAE means not only compliance but continuing financial efficiency and audit readiness, which is why we recommend you choose CBM Consultants.  

CBM Consultants gives you excellent Accounting Supervision Services to let your management maintain accurate and reliable documents. Plus, our experts can ensure you stay compliant by removing any chance of fraud.    

The introduction of Corporate Tax (CT) in the United Arab Emirates is a significant development in the Emirates’ economic landscape. Businesses in Dubai, Sharjah, and the Emirates must comply with Corporate Tax Registration with the Federal Tax Authority, including both experienced and new business owners. In order to be complaint, it is a must to know about the CT registration deadline, how to file for Corporate Tax, including payment fees, and any documents you will need. 

 

Who Should Register for Corporate Tax in UAE? 

You are required to register for Corporate Tax in the UAE if: 

• Your taxable income exceeds AED 375,000 in one financial year. 

• You do business as a mainland company or a Free Zone company, regardless of whether you’re able to benefit from a 0% rate. 

• You are a foreign group with PE in the UAE. 

• You’re an individual doing business in UAE (freelancers, sole proprietors) with an annual turnover of more than AED 1 million. 

• You are a registered branch of a foreign company in the UAE, earning money in the mainland UAE. 

Some entities, including government entities, public benefit entities, and limited investment and pension funds may be exempt, but they still must apply for an exemption through the FTA. 

 

CT Registration Deadline & Filing Deadline Check 

The FTA released separate CT registration deadlines by the licensing date. If you fail to register on time, the penalties are quite rigid. To determine your company’s deadline, you need to do a CT filing deadline check via the FTA online portal or contact an accredited tax agent. 

Key points: 

• Deadlines for registration are based upon the year the trade license was issued. 

• Any late filing dates for CT returns are normally due 9 months after the end of the accounting period. 

• If this is done late, AED 10,000 fines can likely be imposed. 

 

Documents Required for Corporate Tax Registration in UAE 

Before starting your UAE corporate tax registration process, it is crucial to ensure your business is ready to apply and has all the necessary documentation. Having your documentation ready will help ensure a smooth application process, and it will allow you to avoid delays in processing time and penalties.  

Here is the list of documents to have in place before you begin your application process:  

• Trade License – Your business must be legally registered in the UAE, with a valid listing that is currently active. 

• Financial Statements – To determine tax eligibility and assess taxable income, it is necessary to prepare recent financial statements detailing income, expenses, and profit details.  

• Authorized Signatories –To handle tax application matters, identify the individual acting on your company’s behalf and prepare a Power of Attorney if someone else is completing the registration.  

• Emirates ID and Passport Copies – You will need to submit a valid identification document for all owners, partners, or directors who are related to the business. 

•  Business Contact information – The requester is required to provide accurate and up-to-date business contact information such as registered business address, phone number, and email ID. 

• Entity type clarification– What type of entity in the UAE are you- a mainland, free zone, branch or a foreign entity, it affects your eligibility, tax rates, exemption of liability. 

• VAT registration status (if applicable): If your business is already VAT registered, have your Tax Registration Number (TRN) available.  

 

How to Register and File: Corporate Tax in UAE 

Businesses can register corporate tax in UAE online through the FTA’s Emara Tax portal. Here is how you register for Corporate Tax through your portal: 

1. Create an FTA account or log into your existing account. Sign up for Emara Tax using your email and mobile number and update your business profile with Corporate Tax if you already have a VAT account with the FTA. 
2. Select or create a taxable person profile. Once you have logged in, you will need to create a new ‘Taxable Person’ profile for your business (or select an existing profile, in the case that you already have a VAT-registered profile). This profile will link all your obligations related to tax including VAT and Corporate Tax. 
3. File out the Corporate Tax Registration form with accurate details such as entity type, financial year, business trade license, etc.  
4. Upload the required documents (as mentioned above).  
5. Pay the applicable corporate tax registration fees in UAE, if any. 
6. The FTA reviews applications may request additional information and approvals. Approval results in a Corporate Tax Registration Certificate and Tax Registration Number; processing time varies. 

For companies based outside Dubai, like Sharjah, the process remains the same; simply select your Emirate (e.g., register corporate tax in UAE Sharjah) during registration. 

After registration, businesses must file annual CT returns online through the same portal. 

 

Corporate Tax Registration Services by CBM Consultants: 

At CBM Consultants, our seasoned tax advisors specialize in Corporate Tax registration, leveraging their extensive expertise to ensure a smooth process. We are well-versed in the latest tax changes and provide proactive preparation to minimize costs and stress.  

With our expertise and guidance, you stay updated on all aspects of Corporate Tax Registration and filings, ensuring compliance and avoiding penalties. Trust us for seamless and effective tax handling. 

 

Conclusion: 

The introduction of corporate tax is transforming the way businesses plan, operate and report in the UAE. Early registration and timely filing will not only protect you from overall penalties but will also create a good compliance history with the Federal Tax Authority. Be prepared: review your CT registration deadlines, prepare your documentation, and register corporate tax in UAE online ahead of time. If you’re unsure, consider consulting a certified tax advisor to help you understand the specific details of and obligations under UAE corporate tax laws. 

As the UAE launches its corporate tax regime, understanding your financial year for corporate tax is becoming essential for every business. A company’s financial year determines its corporate tax period in the UAE, impacting its compliance schedule, reporting obligations, and tax planning for the tax year. However, what if you want to change your financial year for corporate tax?  

In this blog, we will explain changing your financial year for corporate tax in the UAE, how this will impact your tax year, and what steps you need to take for compliance with corporate tax registration. 

 When does the UAE Financial Year Start? 

Generally, for most businesses in the UAE, the default financial year starts from January 1 and ends on December 31 of the calendar year. However, businesses are able to choose a different financial year depending on the financial year of the parent company and their operational and business needs. Your financial year determines the first and subsequent corporate tax period in the UAE as it will set the due date for your tax return. 

Changing Your Financial Year: Key Implications 

If your business wants to change its financial year after registering for corporate tax UAE, you must apply for approval from the Federal Tax Authority (FTA). Changing your financial year can shift your first corporate tax periods, potentially extending or shortening them. 

For example: 

•  If your current financial year ends December 31, 2024, your first tax period runs from June 1, 2023 (when corporate tax takes effect) to December 31, 2024. 

• If you change your year-end to March 31,2024 your first tax period could run from June 1, 2023, to March 31, 2024 — giving you a longer first reporting period. 

While this may appear to be beneficial regarding cash flow or for administrative purposes (less paperwork) in a business, one must evaluate the regulatory compliance burden, as a longer period to account for tax may delay a business from taking deductions or create complexity for compliance with financial statements. 

Why Would You Change Your Financial Year for Corporate Tax? 

Typically, your corporate tax year is established in your Memorandum of Association (MOA) or defined in a resolution of the company’s Board of Directors, but there can be instances when a company might want to change the financial year, or when a company may have to change the financial year for tax purposes.  

Here are some of the most common situations: 

• Aligning with a parent company: 

For multinational/subsidiary style businesses, streamlining financial reporting and tax compliance can be much simpler if the UAE financial year aligns to that of the parent company. 

• Tax Grouping: 

 If your business is a member of a tax group in the UAE, it’s hard to file a consolidated tax return if each member of the group has a different financial year.  

• Operational Efficiency: 

 Some industries have natural business cycles with periods of activity and inactivity that do not align with the calendar year. Therefore, sometimes it will be more operationally efficient to change your financial year to reflect your business flow instead of receiving irrelevant requests from auditors or complying with a calendar year when it does not accurately reflect the nature of the business. 

• Foreign Tax Relief Situations: 

 Sometimes a company’s financial year may need to be adjusted to allow a company to receive foreign income tax credits and avoid double taxation with respect to the same taxable income that may be included in the consolidated income tax return of the foreign tax jurisdiction. 

• Liquidation Purposes: 

 With respect to the liquidation of a company, it is sometimes necessary to change the financial year to ensure the commencement of the process that brings together financial statements and tax matters to conclude the liquidation or the wind up of the company. 

Steps for Changing the Financial Year 

To align your financial year for corporate tax with your business strategy, you should:
 1) Assess the operational and tax implications with your finance team or tax advisor.
 2) Submit an application to the FTA explaining the reasons for the change.
 3) Update your corporate tax registration details accordingly.
 4) Maintain clear documentation of board resolutions or shareholder approvals for the change. 

How can CBM Consultants Assist You? 

CBM Consultants helps you in changing your financial year for UAE corporate tax by first assessing whether your business meets FTA requirements for a year-end change. We also provide advice on the best timing to align with corporate tax periods, prepare necessary documents (like revised financial statements and board resolutions), and submit the application to the FTA. To ensure timely compliance and submission, we help you in coordination with the FTA to resolve queries, ensuring your books comply with IFRS and UAE tax laws, and help you avoid mistakes that could lead to penalties. Additionally, by integrating tax planning strategies, we make sure that the new financial year benefits your cash flow and tax obligations.  

Impact on Corporate Tax Registration 

When you adjust your financial year, the FTA will update your corporate tax registration records. This change affects when you must submit tax returns, make payments, and comply with transfer pricing documentation if applicable. It’s crucial to plan ahead so your tax team can meet new deadlines without risking penalties. 

Conclusion

Choosing or changing the right financial year for corporate tax is more than an administrative decision; it’s a strategic choice that influences your cash flow, compliance, and operational efficiency. Whether you stick with the calendar year (January–December) or opt for a customized period, make sure you understand how it affects your corporate tax period in UAE, your first corporate tax periods, and your obligations under corporate tax UAE laws.