FAQs

General FAQs

What are your primary areas of specialization?

Our core focus is audit and assurance services. In addition to statutory and external audits, we offer a broad range of advisory services across multiple disciplines, including internal audit, tax and transfer pricing advisory, due diligence, IFRS and technical accounting advisory, business valuation, digital transformation, ESG and sustainability advisory, and financial advisory. 

We serve a diverse portfolio of clients across various industries, with particularly deep expertise in the financial services sector. This includes clients such as financial advisors, asset managers, banks, insurance and reinsurance companies, virtual asset service providers, and family offices. Our specialized industry knowledge enables us to deliver tailored solutions that address the unique challenges of each client segment.

Is your firm registered or approved by the relevant UAE authorities?

Yes, our firm is duly approved and recognized by key regulatory bodies in the UAE, including the Ministry of Economy, Dubai Financial Services Authority (DFSA), and Abu Dhabi Financial Market (ADGM), as well as other major free zones such as DMCC, JAFZA and DAFZA. These approvals authorize us to provide audit and related professional services within these jurisdictions. 

Several of our partners are individually registered and authorised by the relevant authorities, ensuring that our audit opinions are signed by qualified professionals in full compliance with local regulations and standards. All our audit partners undergo a minimum of 50 hours of structured training annually. 

What criteria do you use for client acceptance, and how are your fees determined?

Our client acceptance process is comprehensive and designed to ensure a thorough risk assessment prior to engagement. This process is fundamental to our commitment to maintaining high standards of professional integrity and quality. 

When determining our fees, we adopt a case-by-case approach that considers several factors, such as the nature and complexity of the engagement, the client’s industry, the robustness of governance and internal controls, anti-money laundering (AML) risk, the integrity of those charged with governance, overall risk profile, and estimated time and resources required to complete the assignment. This ensures that our fee structure is transparent and appropriately reflects the scope of work while delivering value to our clients.

What methodology do you follow in delivering your services?

While our methodology is tailored to the nature of services and requirements of each individual engagement, our work typically begins with a rigorous client and engagement risk assessment. This is followed by meticulous planning, a detailed risk assessment, and thorough fieldwork. Each engagement undergoes a multi-layer review before a final conclusion is reached. Our structured approach ensures that each assignment is conducted with the highest level of diligence, accuracy, and professional oversight.

What Quality Standards do you follow? 

We operate under ISQM 1 and maintain a comprehensive system of quality management that governs every aspect of our practice. We are monitored independently by our Quality Team, with oversight from relevant governance committees and independent board members. 

How do you ensure confidentiality and data protection, especially for sensitive financial information?

We place utmost importance on confidentiality and the protection of sensitive client data. Our firm has secure IT systems and well-defined policies designed to safeguard information from cyber threats and unauthorized access. Regular staff training on data protection and cybersecurity is mandatory for all employees. 

Additionally, all employees are required to confirm annually their adherence to our ethical standards by signing an annual declaration. They are also bound by our Code of Ethics, confidentially requirements under HR policies, and the explicit terms of their employment contracts, all of which emphasize the importance of confidentiality and ethical conduct.

How do you stay updated with changes in UAE laws and regulations?

We are accredited as a Platinum Approved Employer by ACCA and as an Approved Employer by ICAEW. These accreditations attest to the quality and rigor of our training programs and internal systems, which are independently vetted by these leading professional bodies. 

To ensure our team remains current with the latest legal and regulatory developments in the UAE, we provide a range of training formats, including face-to-face sessions, recorded sessions, online courses, and a comprehensive induction program. This commitment to continuous professional development ensures that our staff remain equipped with up-to-date knowledge and best practices to serve our clients effectively.

Are you part of the Baker Tilly International network?

Yes, we are the one and only member firm in UAE  representing Baker Tilly International. We are one of the world’s leading advisory, tax, and assurance networks. The network comprises more than 50,000 professionals across 140+ jurisdictions, enabling us to serve clients with both local expertise and global reach. As an independent member firm, we adhere to Baker Tilly International’s methodologies and professional expectations while maintaining full legal and operational autonomy within our firm. This affiliation allows us to support clients with international operations, multi-jurisdictional structures, and cross-border transactions with consistency and confidence.

How do you ensure independence and manage conflicts of interest?

Independence is a fundamental element of our professional responsibilities. We maintain strict independence policies aligned with the IESBA Code of Ethics, UAE regulatory requirements, and Baker Tilly International guidelines. All team members complete annual independence and conflict-of-interest declarations, and our systems include automated checks during client onboarding and acceptance. For every new engagement, we evaluate potential conflicts both locally and globally and document safeguards where necessary. Matters requiring further consideration are escalated to the Ethics Partner or Quality Team. This structured approach ensures that we maintain objectivity, integrity, and independence in all assurance engagements.

What technology platforms do you use in your audit and advisory work?

We use modern, secure, and globally recognised technology platforms to enhance the quality, efficiency, and consistency of our work. Our audit teams utilise cloud-based audit software, data analytics tool, and secure portals to streamline documentation, testing, and communication. For advisory and consulting assignments, we employ specialised tools in areas such as financial modelling, valuations, process automation, and digital transformation. Our technology environment includes robust cybersecurity controls, access management, and encrypted data storage, ensuring that client information is always protected. Together, these tools support a more insightful, efficient, and risk-focused approach across all our services.

General Tax FAQs

Which federal taxes are currently imposed under the UAE tax framework?

The UAE imposes several federal taxes relevant to business activities. They are:

• Corporate Tax (CT)
• Valued Added Tax (VAT)
• Excise Tax (ET)
• Top-up Tax

What is Corporate Tax (CT) in the UAE?

CT is a direct tax imposed on the taxable income of a taxable person. In many jurisdictions, this type of tax is commonly referred to as “Corporate Income Tax” or “Business Profits Tax”. CT applies to most juridical persons established in the UAE. It also applies to foreign juridical persons that carry out certain activities in the UAE which give rise to a taxable presence. Although CT primarily targets juridical persons, it may also apply to natural persons. A natural person conducting a business or business activity in the UAE may be subject to CT.

What is Value Added Tax (VAT) in the UAE?

Like in many other jurisdictions, VAT in the UAE is designed to tax consumption throughout the supply chain, where businesses collect and remit the VAT but can reclaim VAT on their purchases, which results in the final customer to bear the ultimate tax burden. Both legal and natural persons conducting business in the UAE must register, collect, and remit VAT to the government. 

What is the definition of “business” under UAE tax laws?

The definition of “business” under both the CT and VAT laws is broadly aligned. It refers to any activity conducted regularly and on an ongoing basis. The activity must also be carried out independently. It can take place in any location. The type of activity may include industrial, commercial, agricultural, vocational, professional, service-based, or excavation-related operations. It may also be the other activities related to the use of tangible or intangible assets.

What is Excise Tax (ET) in the UAE?

ET is a form of indirect tax that aims to tax specific products that are deemed harmful to human health or the environment. As with VAT, the intended taxpayers are final consumers. It applies to specific categories of excise goods. These include:

• Tobacco and tobacco products
• Electronic smoking devices, including the devices and the liquids used in them
• Sweetened beverages, carbonated drinks, and energy drinks

Legal and natural persons engaged in excise related activities must register, collect, and remit ET to the government. These activities include:

• Production or stockpiling of excise goods in the UAE, where such activities are carried out in the course of business.
• Import or release of excise goods from a designated zone. The ET Law provides its own definition for a “designated zone.”

What is Top-up Tax in the UAE?

Top‑up Tax in the UAE is a tax introduced in line with the OECD’s global minimum tax rules under Pillar Two. 

The Top‑up Tax applies to UAE entities that are part of multinational enterprise (MNE) groups with annual revenue of €750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity. This revenue threshold must be met in at least two of the four fiscal years immediately preceding the fiscal year in which the Top-up Tax applies.

The UAE Top‑up Tax applies to fiscal years starting on or after 1 January 2025. It is aligned with the OECD’s Global Anti‑Base Erosion (GloBE) Model Rules and forms part of the UAE’s commitment to international tax transparency and a consistent global minimum tax framework.

When is UAE Top-up Tax nil under the Domestic Minimum Top-up Tax (DMTT) rules?

The UAE DMTT rules include several safe harbours and exclusions.
These measures are intended to simplify compliance where Top-up Tax exposure is considered low.

De minimis exclusion

This provision applies where a group’s UAE activity is below prescribed thresholds. 

Top-up Tax is nil where:

• the Average Pillar Two Revenue is less than EUR 10 million; and
• the Average Pillar Two Income or Loss is a loss or less than EUR 1 million.

The application of the above is subject to an annual election. The assessment is based on the current year and the two preceding fiscal years.

Transitional CbCR Safe Harbour

This relief supports groups during the transition into Pillar Two by allowing reliance on simplified Country‑by‑Country Reporting data.

For fiscal years that:

• begin before 1 January 2027; and
• end before 1 July 2028,

Top-up Tax may be nil if one of the following tests is met:

• the De minimis Test;
• the Effective Tax Rate (ETR) Test; or
• the Routine Profit Test.

Access to this relief requires a Qualified Country‑by‑Country Report  and Qualified Financial Statements.

Simplified Calculations Safe Harbour

This safe harbour offers a simplified alternative to full Pillar Two calculations beyond the transition period.

Top-up Tax may be treated as nil where the simplified computation rules are satisfied, using an alternative income calculation methodology aligned with Pillar Two principles.

Limited international activity exclusion

This exclusion applies to groups with a restricted international footprint, particularly in the early stages of cross‑border operations.

Top-up Tax is nil where:

• the group operates in six or fewer jurisdictions;
• tangible assets outside the main reference jurisdiction are below EUR 50 million; and
• UAE entities are not owned by a parent applying the Income Inclusion Rule (IIR).

The exclusion applies for up to five years from when the group first becomes subject to Pillar Two.

Important note

Even where Top-up Tax is nil:

• DMTT registration is still required;
• Compliance obligations remain in place; and
• Eligibility must be assessed annually.

If a foreign company is active in the UAE but has no local presence yet, what UAE tax risks should it consider?

When a foreign company is active in the UAE but does not yet have a local presence, it may still be subject to UAE tax obligations depending on the nature of its activities and connections to the UAE.

Under the UAE Corporate Tax regime, a foreign juridical person may be considered a taxable person if it has a permanent establishment (PE), a nexus, or derives UAE state-sourced income (SSI). A foreign entity that maintains a PE or has a nexus in the UAE is required to register for Corporate Tax and comply with all obligations applicable to taxable persons under the UAE CT Law. If the foreign entity only derives SSI, it is not required to register for Corporate Tax. However, it may still be subject to withholding tax (WHT). Currently, the applicable WHT rate in the UAE is 0%, and there is no reporting obligation associated with it under the present framework.

If the foreign juridical person is effectively managed and controlled in the UAE, it will be treated as a resident juridical person under the UAE CT regime. As a result, the entity will be subject to corporate tax on its worldwide income and must comply with all obligations imposed on UAE-incorporated companies.

In assessing whether a foreign company has a permanent establishment, nexus, or is effectively managed and controlled in the UAE, reference must be made to the relevant provisions of the UAE CT Law, related implementing decisions, and, where applicable, international tax agreements such as double tax treaties.

For VAT purposes, a foreign company may be required to register in the UAE even without a physical presence. This obligation may arise under two distinct conditions. 

The first condition applies when the foreign company has a fixed establishment (FE) in the UAE. This refers to a place with sufficient human and technical resources to carry out business activities on a regular basis. In this case, the foreign company must assess whether the FE exceeds the mandatory VAT registration threshold. If not, it may still opt for voluntary registration. These thresholds mirror those applicable to UAE resident businesses.

The second condition applies when the place of supply is in the UAE and there is no other person in the UAE obligated to account for the VAT. In such cases, the foreign company must register for VAT regardless of the value of supplies made. No registration threshold applies in this scenario.

How are UAE federal taxes administered?

The administration of UAE federal taxes is the responsibility of the Federal Tax Authority (FTA). The FTA is mandated to administer, collect, and enforce federal taxes and related penalties. It also supervises the distribution of tax revenues and ensures the consistent application of tax procedures across the UAE. In addition, the FTA is responsible for implementing cooperation frameworks between the UAE and other countries or international organisations. 

The UAE’s federal tax system operates within a unified procedural framework, established by the principal legislation governing tax administration—commonly referred to as the Federal Tax Procedures Law (FTPL). This law applies across all federal taxes, including VAT, ET, and CT.

At its core, the FTPL defines the legal rights and obligations of both taxpayers and the FTA. It establishes the fundamental compliance framework that taxpayers must follow and the procedural guarantees to which they are entitled. These include tax registration and deregistration, filing of returns, assessment of liabilities, payment obligations, mechanisms for appealing decisions, and the conduct of UAE tax audits. This framework ensures legal certainty, transparency, and consistency in the relationship between the taxpayer and the FTA. The FTPL must be read in conjunction with each respective federal tax law. The specific rules governing VAT, ET, and CT take precedence in areas where the procedural law defers to the relevant tax legislation.

From an operational standpoint, the FTA administers UAE federal taxes through a fully digital infrastructure. The EmaraTax platform is the central system used to manage tax obligations. It allows taxpayers to complete registration, file returns, make payments, and submit various UAE tax related service requests online.

The platform also strengthens the FTA’s administrative capacity. It enables integration with other government systems and supports automated processing. This “digital by default” model reflects the FTA’s commitment to efficiency, accessibility, and alignment with the UAE’s broader e-government strategy.

To what extent has the UAE adopted electronic invoicing (e-invoicing) in line with global developments?

 The UAE has evolved from permitting electronic invoicing under its VAT rules to mandating a structured, law-based e-invoicing system. The VAT Executive Regulation permits the issuance of tax invoices electronically, provided the origin, content integrity, and legibility are ensured, and records are stored securely and remain accessible. This earlier flexible approach has now been formalised through the FTPL, which introduced the concept of an official “Electronic Invoicing System.” This system is intended for the structured issuance, transmission, and storage of tax invoices and credit notes.

 Implementation is driven by Ministerial Decision No. 243 of 2025, which establishes core technical obligations such as using machine-readable XML formats, digital signing, timestamping, QR code generation, and routing invoices through an Accredited Service Provider (ASP). Unstructured invoice formats such as PDFs are no longer compliant under the new model. Ministerial Decision No. 244 of 2025 defines the phased rollout schedule:

• By 30 October 2026: Persons subject to e-invoicing and whose revenue is equal to AED 50 million or more must appoint an ASP.
• By 1 January 2027: These persons must fully implement the e-invoicing system.
• By 31 March 2027: Persons subject to e-invoicing and whose revenue is less than AED 50 million must appoint an ASP. This also applies to government entities.
• By 1 July 2027: Persons whose revenue is less than AED 50 million must fully implement the e-invoicing system.
• By 1 October 2027: Government entities must implement the e-invoicing system..

The mandate does not apply to business-to-consumer (B2C) transactions.

The UAE e-invoicing regime is closely aligned with the OECD’s Tax Administration 3.0 vision, which promotes real-time data reporting and digital integration to enhance compliance. It also reflects regional alignment, notably with Saudi Arabia, which has implemented a two-phase structured e-invoicing system, and the European Union, where e-invoicing is being rolled out through a unified framework.

Administrative penalties apply to non-compliance, including failures to onboard an ASP, transmit structured invoices, or notify system malfunctions. These are governed by a dedicated cabinet decision on e-invoicing violations.

Corporate Tax FAQs

Which persons are exempt from UAE Corporate Tax?

The UAE Corporate Tax regime exempts specific categories of persons under Article 4 of Federal Decree-Law No. 47 of 2022. These include Government Entities, Government Controlled Entities, persons engaged in Extractive Business or Non-Extractive Natural Resource Business, Qualifying Public Benefit Entities, Qualifying Investment Funds, qualifying pension or social security funds, certain wholly owned subsidiaries of specified Exempt Persons, and any other person designated by Cabinet decision.

The exemption route differs by category. Government Entities are generally automatically exempt, provided they do not conduct a separate taxable business. Extractive Businesses and Non-Extractive Natural Resource Businesses may be exempt where they meet the prescribed conditions and are subject to Emirate-level taxation. Government Controlled Entities and Qualifying Public Benefit Entities generally rely on being listed in the relevant Cabinet decision and satisfying their ongoing conditions. 

By contrast, Qualifying Investment Funds, qualifying pension or social security funds, certain wholly owned subsidiaries of specified Exempt Persons, and other Cabinet-designated persons must generally register, apply to the FTA, and obtain approval for exemption before the exemption is effective.

From a practical perspective, businesses should not assume that exemption status removes all administrative obligations. Depending on the category, an Exempt Person may still need to register for Corporate Tax, submit an exemption application, maintain supporting records, monitor continued eligibility, and notify or deal with the FTA where its circumstances change. The correct classification should therefore be confirmed before relying on exempt status in tax filings, group structuring, financing arrangements, or investor communications.

If the conditions for exemption are not met, the consequences can be significant. For categories that require FTA approval, failure to satisfy the relevant conditions at any time during a tax period may cause the person to cease being an Exempt Person from the beginning of that tax period. This can create Corporate Tax registration, filing, payment, record-keeping, and potential amendment obligations. It may also affect access to reliefs, group planning, and tax representations previously made to stakeholders. Businesses should therefore review exemption conditions periodically and maintain evidence demonstrating that the conditions were met throughout the relevant tax period.

What is a Free Zone under the UAE Corporate Tax regime?

Under the UAE Corporate Tax Law, a Free Zone generally means a designated and defined geographic area in the UAE that is recognised for Corporate Tax purposes. This definition is critical because Free Zone status is the starting point for applying the Free Zone Corporate Tax regime.

A business should not treat itself as falling within the Free Zone Corporate Tax rules simply because it is licensed by an authority commonly described as a free zone, or because it operates from an area that has customs, logistics, or VAT-related features. The relevant area must be recognised as a Free Zone for Corporate Tax purposes. This distinction often creates uncertainty, as the meaning of “free zone” for licensing, customs, VAT, or commercial purposes does not necessarily determine the Corporate Tax position.

This matters because the UAE Corporate Tax framework applies in stages. First, there must be a recognised Free Zone. Second, the taxpayer must be a Free Zone Person. Third, the taxpayer must meet the conditions to be treated as a Qualifying Free Zone Person. Only a Qualifying Free Zone Person may benefit from the 0% Corporate Tax rate on Qualifying Income, while other taxable income may remain subject to the standard 9% Corporate Tax rate. In practice, this analysis can directly affect pricing, customer contracts, supply chain design, substance requirements, transfer pricing compliance, and the taxpayer’s long-term operating model.

Who can form a Tax Group for UAE Corporate Tax purposes?

UAE resident companies may elect to form a Tax Group where the conditions prescribed under the Corporate Tax Law are satisfied. Broadly, the parent company must directly or indirectly hold at least 95% ownership and meet the relevant voting and economic entitlement requirements in relation to the subsidiary members. 

Forming a Tax Group can provide several practical benefits. It allows eligible group companies to be treated as a single taxable person for Corporate Tax purposes, which can simplify compliance, reduce administrative burdens, and potentially facilitate the utilisation of losses and group relief mechanisms where applicable. 

It is also important to distinguish consolidated financial statements prepared for audit or general financial reporting purposes from aggregated financial statements required for Corporate Tax purposes. Audited consolidated financial statements are generally prepared under the applicable accounting standards and may reflect consolidation adjustments, such as business combination accounting, goodwill, fair value adjustments, and elimination of the parent’s investment against subsidiary equity. By contrast, aggregated financial statements for a Tax Group are prepared under the Corporate Tax framework by combining the standalone financial statements of the Parent Company and each Tax Group member, generally eliminating intra-Tax Group transactions, but not necessarily applying all accounting consolidation adjustments. This distinction matters because the Corporate Tax return is based on the tax-specific aggregation framework, not merely on the statutory audit consolidation pack.

However, a Tax Group is not always the optimal choice. Businesses should evaluate the commercial and tax implications before joining or forming a Tax Group, particularly where group entities operate different business lines, benefit from specific tax incentives, have varying shareholder arrangements, or intend to undertake future restructuring transactions. A detailed assessment can help determine whether a Tax Group will deliver long-term compliance and tax efficiencies. 

Indirect Tax FAQs

How can businesses improve the likelihood of a successful VAT refund claim under the FTA's enhanced review procedures?

Businesses should ensure that VAT refund claims are accurate, fully reconciled and supported by sufficient documentation before submission. This includes valid tax invoices, proof of payment and reconciliations to the VAT return.

The FTA may also request additional information to support a refund claim. Businesses should therefore retain documentation supporting the transaction, the parties involved and the basis for the VAT recovery. They should also maintain records of any checks performed on suppliers.

Does appointing an Accredited Service Provider (ASP) mean a business is ready for UAE e-invoicing?

Appointing an ASP is an important component of the UAE e-invoicing framework, but it is only one element of a broader e-invoicing implementation project and should not be viewed as a measure of overall e-invoicing readiness.

While the ASP provides the connectivity and technology platform required to exchange e-invoices, a business’ readiness ultimately depends on the organisation's ability to generate accurate, complete and compliant invoice data.

Specifically, businesses should assess their ERP systems, invoicing processes, master data, VAT determination logic and internal controls to ensure they can meet the new e-invoicing requirements. In practice, e-invoicing extends beyond the IT function and requires coordination between tax, finance, procurement, legal and technology teams to manage the broader operational and compliance impacts.

How should businesses deal with natural shortages and losses of Excise Goods?

Businesses should carefully distinguish natural shortages, such as evaporation, moisture loss or production residues, from losses resulting from theft, negligence, operational issues or inadequate inventory controls.

Natural shortages may not be subject to Excise Tax, provided the business can demonstrate that the shortage arises from the inherent nature of the Excise Goods and complies with the FTA's prescribed requirements. This includes obtaining the necessary independent assessment, maintaining adequate supporting documentation and fulfilling the applicable reporting obligations.

Businesses should therefore ensure that natural shortages are properly documented and supported by appropriate evidence. Shortages that are not adequately substantiated, or that exceed the approved levels, may be treated as a release for consumption and become subject to Excise Tax.

Virtual Assets Regulation in the UAE

Which authority regulates virtual asset businesses in the UAE?

Virtual asset businesses in the UAE are regulated under a multi‑regulator framework, depending on where the activity is conducted and the nature of the virtual asset service. At a high level:

• The Capital Markets Authority (CMA) regulates investment‑focused virtual asset activities onshore across the UAE.
• The Virtual Assets Regulatory Authority (VARA) regulates virtual asset activities in Dubai (excluding DIFC).
• The Dubai Financial Services Authority (DFSA) regulates virtual assets within the DIFC.
• The Financial Services Regulatory Authority (FSRA) regulates virtual assets within ADGM.
• The Central Bank of the UAE (CBUAE) regulates payment‑related tokens and stablecoins. 

What is the scope of the Capital Markets Authority (CMA)?

The CMA (formerly the Securities and Commodities Authority) is the federal regulator for investment‑purpose virtual asset activities conducted onshore in the UAE, outside DIFC and ADGM. Its scope covers activities such as virtual asset exchanges, brokerage, custody, advisory, portfolio management, lending and issuance of investment tokens. CMA sets the baseline licensing and compliance standards applicable across the UAE.

What is VARA’s role in regulating virtual assets in Dubai?

VARA is the specialised virtual assets regulator for the Emirate of Dubai, excluding the DIFC. It regulates the full lifecycle of virtual asset activities, including issuance, trading, custody, brokerage, advisory and promotion. Virtual asset businesses operating in Dubai mainland must be licensed by VARA and comply with its comprehensive rulebooks covering governance, market conduct, technology and compliance. 

Which authority regulates payment tokens and stablecoins?

Virtual assets used primarily for payment or settlement purposes, including fiat‑backed stablecoins, fall under the exclusive supervision of the Central Bank of the UAE (CBUAE). Such activities are regulated under the Payment Token Services framework and are outside the remit of CMA, VARA, DFSA and FSRA when used purely as a means of payment.