Tax compliance: best practices to stay on the right side of the law

Radia Hammoulhadj
Tax Business Partner

The tax landscape is constantly evolving in the UAE. It has recently been deeply changed by the arrival of the new Corporate Tax. How to stay informed of the latest changes? What are the tax compliance best practices to avoid fines which amounts can reach several thousands of dirhams?


Here are some of our tips to save money and time.

Be on time for all the tax registration and filings

  • 10,000AED: this is the amount of the fine that the FTA applies if you fail to register your business for the VAT within 30 days after exceeding the threshold,
  • 2,000AED: this is the fine that the FTA applies for late filing of the VAT return.


And the list could go on. Being late for registration or tax filing is a bad idea in the UAE. The fines can be significant, and it’s easy to stay on time.


To do so, keep a regular accounting and lean on an FTA-registered Tax Agent. The Tax Agent will be the interlocutor between your company and the FTA. He will make sure that you respect the deadlines, if you transmit him all the needed documents on time. The Tax Agent will file the returns and the documents that need to be filed, and will also support you in your complaints should you have any. He will guide you in your tax compliance.


Also, get some help from an accounting company to get your monthly accounting done and have all the financial documents ready for your tax filing. This will also help you track exactly when your company exceeds legal thresholds and prevent you from being late for registration.


Don’t forget also to register for the Corporate Tax: this will be mandatory for all companies in the UAE, even if your profit doesn’t exceed the taxation threshold. The registration are now open.

Regularly verify the tax processes of your company

Once again, we can only advise you to lean on professionals. Some services such as the VAT Health Check are specifically designed to evaluate the tax processes in your company.

It will allow our experts to look at the way you do your invoicing for example, or how you organize your company in tax matters and tax compliance. You will then be able to address the findings and to strengthen your tax compliance.

Don’t be afraid of your company’s numbers!

For many, tax filing, accounting, financial reports convey one feeling: fear! Because we are not all so good with numbers, and in this field, there is a lot of them.

But numbers are an incredible tool to pilot your company. It helps you to see what is making you earn money, where on the contrary you need to improve. Don’t neglect them.

First, be regular in doing your accounting. Invest in an accounting software if needed, or work with an accounting company.

Then, don’t forget to do your accounting in accordance with international standards such as IFRS. This will help you have better numbers and almost all tax documents must be justified with documents respecting these norms.

And after all, hire the services of a CFO to help you analyze your financial data and draw conclusions from it if you don’t feel comfortable enough with them.

We could continue and give you many advice to stay on the compliant side of the tax landscape in the UAE: don’t let deadlines pass, do your accounting monthly and by the book, regularly assess your tax process, and lean on professionals who are here to support you on this effort.