Frequently Asked Questions

You must register if your taxable supplies exceed AED 375,000 in the past 12 months or are expected to exceed that in the next 30 days. (Ref: Federal Decree-Law No. 8 of 2017, Article 13)

Late registration or return filing attracts FTA administrative penalties, which increase based on the delay. You may also owe unpaid VAT with interest.

No. You cannot recover VAT on expenses related to exempt supplies (like residential rent or certain financial services). Only expenses linked to taxable supplies are eligible for recovery.

You must issue a Tax Credit Note to correct the error and adjust your VAT return accordingly. (Ref: Executive Regulation Article 60, amended by Cabinet Decision No. 100 of 2024)

From 26 February 2025, under Cabinet Decision No. 127 of 2024, the Reverse Charge Mechanism (RCM) applies between registered businesses when goods are for resale or manufacturing.

Yes, the Federal Tax Authority (FTA) may grant an extension if the delay was caused by serious illness, disasters, or system failure — but not for negligence or workload reasons. (Ref: FTA Decision No. 1 of 2025)

Yes. Exports outside the UAE are zero-rated, provided that customs and documentation requirements are properly maintained.

Common reasons include incorrect classification of supplies, missing or invalid invoices, and failure to keep proper VAT records. (Ref: Executive Regulation Article 71)

Many businesses use accounting systems not aligned with International Financial Reporting Standards (IFRS). Common pain points include not identifying lease liabilities (IFRS 16), recording revenue on cash basis instead of accrual (IFRS 15), ignoring impairment testing for assets (IAS 36), and missing disclosures for related parties (IAS 24). These lead to audit delays or qualified opinions.

Delays usually happen because bank and supplier reconciliations are incomplete, supporting documents are missing or unorganized, journal entries are not properly posted or explained, and intercompany balances are unconfirmed.

Under IFRS 16, almost all leases (office, vehicles, warehouses) must appear on the balance sheet as "Right-of-use assets" and "Lease liabilities." Many UAE SMEs still expense rent monthly instead, causing audit adjustments, restatements, and non-compliance penalties from regulators.

The most frequent issues include missing accruals or duplicate expenses, misclassification between capital and operating expenses, recording owner withdrawals as expenses, not reconciling VAT payable with returns, and inaccurate or outdated fixed-asset registers. Such errors increase audit time and can affect corporate-tax calculations.

Because revenue drives both profit and VAT. Under IFRS 15, revenue must match the actual delivery of goods or services, not just the invoice date. Errors here often trigger FTA audit queries or underpayment notices.

Inaccurate or delayed bookkeeping leads to unreliable financial reports, repeated audit adjustments, and higher audit fees due to extra review time. Auditors rely on proper ledgers and supporting documents — without them, even compliant businesses can appear non-compliant.

Auditors check if all related-party balances (loans, management fees, shared expenses) are documented and disclosed as per IAS 24. Failure to maintain agreements or board approvals can lead to qualified audit reports and potential FTA scrutiny.

Keep monthly reconciliations up-to-date, adopt IFRS-compliant accounting software, review VAT and corporate-tax postings regularly, and conduct quarterly internal audits.

Because they don't have the right customer insights. Our team uses an extensive business intelligence database and years of market experience to identify high-value cross-sell opportunities that others overlook.

By understanding what your existing customers actually need. Using our in-house analytics tools and industry benchmarks, we help you create personalized offers that boost repeat purchases and customer lifetime value.

We combine real-world experience with data-backed decision-making. Our database covers patterns across multiple UAE industries — helping us design growth strategies proven to deliver measurable results.

Absolutely. We not only identify opportunities but also help you structure bundled offerings, align pricing, and train your sales team to execute effectively — ensuring growth is sustainable, not accidental.

Because their financial information doesn't tell a compelling story. Clear, well-structured, and data-backed reports are essential for building investor confidence and showcasing long-term potential.

A credible valuation demonstrates transparency and reliability. Using globally accepted models such as Discounted Cash Flow (DCF) and EBITDA multiples, investors can assess true worth and negotiate fair terms.

Relying on optimistic projections without supporting data, underestimating risks, and failing to prepare accurate financial statements. Investors prefer realistic forecasts supported by strong fundamentals and market research.

Yes. Advisors provide ongoing support with financial reporting, performance tracking, and governance frameworks to maintain trust and transparency with stakeholders.

Because they focus on plans, not execution. Without clear KPIs, accountability, and performance tracking, even the best strategies remain only ideas on paper.

A financial model translates assumptions into measurable outcomes. It helps evaluate pricing, costs, or new market entry by showing their direct impact on profit, cash flow, and growth.

Scaling too quickly without assessing financial readiness or operational capacity. Expanding before systems, cash flow, and controls are in place often leads to liquidity stress and inefficiency.

An independent advisor provides objective analysis, identifies blind spots, and benchmarks performance against industry standards — ensuring that decisions are both strategic and financially sound.

When revenues are stable or rising but profits are not. Other warning signs include high overhead costs, declining cash flow, or underperforming divisions draining overall performance.

Resistance to change, unclear communication, and lack of alignment across departments. A successful restructuring requires a transparent plan, defined milestones, and leadership commitment.

By identifying which business segments, products, or investments deliver real returns and which consume resources. Redirecting capital to stronger areas enhances both cash flow and long-term value.

Yes. A streamlined structure, clean financials, and efficient operations increase both valuation and investor confidence — often becoming the foundation for successful funding or M&A activity.

This usually happens when VAT classifications or ledgers are set up incorrectly — for example, sales recorded under "exempt" instead of "standard rated." A periodic VAT reconciliation helps catch and correct such mismatches before filing.

Common causes include duplicate entries, missing purchase bills, or manual journal adjustments. Run the "Tax Computation" report in Tally regularly to ensure all transactions are linked to proper VAT ledgers.

Large data volumes, too many inactive ledgers, or outdated Tally versions can slow performance. Regular data split-up by financial year and periodic backup keep the software running smoothly.

It's often due to timing differences, unrecorded charges, or duplicate entries. Tally's Bank Reconciliation feature helps match transactions automatically — but it must be updated regularly to stay accurate.

Yes, but each branch should ideally have separate books or cost centers. Tally supports multi-location accounting, helping you track performance, expenses, and VAT liability for each branch individually.

This happens when stock entries, purchase bills, or costing methods are inconsistent. Ensure every stock movement is supported by a purchase/sales entry and that you use one consistent valuation method (FIFO, Average, etc.).

By taking regular automated backups, especially before closing a financial period or performing updates. Many UAE businesses face costly downtime due to neglected backups or power interruptions.

Yes. Using Cost Centers and Job Costing, you can track each project's income, expenses, and profitability — ideal for construction, design, or service firms that manage multiple contracts simultaneously.

Maintain updated ledgers, proper tax configurations, and attach supporting documents (invoices, receipts). Tally's "VAT Summary" and "Tax Audit File" reports make it easy to extract FTA-ready data in minutes.

Because closing entries (depreciation, provisions, and expense accruals) are missed or done manually. Proper ledger grouping and review before year end simplifies closing and ensures accurate financial statements.