RERA Audit Assistance in UAE: Ensuring Compliance for Real Estate Developers
16/12/2025
YOUNG AND RIGHT ACCOUNTING & TAX CONSULTANCY
From corporate tax registration to audits and bookkeeping, Young & Right offers personalized solutions that keep your business compliant and stress-free. Let’s take the complexity off your plate—starting with a free consultation.
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The introduction of UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022) has fundamentally changed the UAE tax landscape. Since its effectivity on June 1, 2023, the new federal corporate tax regime, featuring a 9% rate on taxable income exceeding AED 375,000 (with 0% for income up to that threshold), has imposed new tax obligations and brought increased scrutiny from the Federal Tax Authority (FTA). Whether operating from the mainland or a Free Zone, companies must be prepared for corporate tax audits in UAE. This is where essential corporate tax audit assistance becomes crucial. At Young & Right, we specialize in helping UAE business navigate this terrain, ensuring robust tax compliance and minimizing risks associated with tax matter
The corporate tax framework demands rigorous adherence to tax laws and regulations. While the UAE offers one of the lowest corporate tax rates globally, this necessitates mandatory tax registration and corporate tax filing requirements. Businesses are now required to maintain audited financial statements for corporate tax purposes and adhere to international tax rules, especially concerning related-party transactions under Transfer Pricing. As the corporate tax system is enforced across the UAE, tax audits are increasing, making audit readiness a core part of financial governance and compliance in the UAE.
A corporate tax audit is a process where the FTA reviews a business’s financial and tax records to ensure compliance with corporate tax laws and regulations. The purpose is to verify that the tax return submitted is accurate and that the company has not underreported income or overstated expenses.
Audit Triggers
FTA audits are not always random. Common triggers include:
• Sudden spikes in deductible expenses
• Claiming losses or refunds
• Irregularities in financial reporting
• Repeated adjustments or voluntary disclosures
• Mismatched records between VAT and CT returns
• Free Zone entities claiming 0% without substance
• Related-party transactions without TP documentation
Engaging professional tax consultants in Dubai and the wider UAE provides significant advantages, primarily centered on tax compliance and tax planning. By leveraging expert corporate tax knowledge, businesses can ensure tax compliance with the federal corporate tax framework, thereby avoiding fines and penalties from the FTA. These services in UAE streamline complex requirements like corporate tax filing and the maintenance of accurate financial records and tax filings. Furthermore, expert tax advice and tax advisory services enable strategic tax planning to optimize tax liabilities, potentially leveraging reliefs and the lowest corporate tax rates available, which boosts business and tax efficiency and supports long-term success in the UAE.
Corporate tax audit assistance involves comprehensive advisory services and tax audit support from tax experts throughout the entire tax audit process:
→ Audit readiness checks specific to the relevant tax period.
→ Thorough document compilation and review of all necessary financial records and tax filings.
→ Managing direct Federal Tax Authority communication, responding professionally to FTA queries and notices.
→ On-site audit representation by our expert corporate tax team.
→Transfer pricing file preparation (Master File/Local File).
→ Developing a post-audit strategy and appeals for efficient audit resolution.
A corporate tax audit is the FTA’s formal review of a business’s financial records and tax filings to ensure full compliance with tax regulations and the corporate tax framework. Audits are rarely random; they are often initiated by specific red flags that suggest potential errors in the corporate tax return.
Common audit triggers that increase the likelihood of an audit process include:
→ Significant, unexplained spikes in deductible expenses.
→ Aggressive claims for tax losses or refunds.
→ Inconsistencies between VAT and Corporate Tax reporting.
→ Free Zone entities claiming 0% tax without demonstrating proper economic substance.
→ Complex related-party transactions lacking proper Transfer Pricing documentation.
→ Repeated instances of voluntary disclosures or late filing of the corporate tax return.
Understanding these triggers is the first step toward audit readiness.
The audit procedure will meticulously scrutinize areas prone to non-compliance. To ensure a smooth UAE corporate tax audit, businesses must have their documentation watertight in these key areas:
Financial Statements for Corporate Tax: The FTA verifies that audited financial statements for corporate entities are IFRS-compliant and precisely align with the figures used for corporate tax filing.
Taxable Income and Deductions: Scrutiny focuses on ensuring non-deductible items (like certain fines) are excluded and that validation exists for all claimed costs, especially those involving related parties.
Transfer Pricing and Related Parties: This is critical. If revenue exceeds AED 200M, preparing the Master File/Local File is mandatory. The FTA checks for arm’s length pricing and timely submission of Form 204 (transfer pricing disclosure).
Free Zone Qualification: For entities claiming the preferential rate, rigorous checks confirm they meet all substance and activity conditions under the corporate tax regulations.
The audit procedure specifically scrutinizes areas where errors or non-compliance are common. Our expert corporate tax services ensure these areas are robust:
→ Financial Statements: Verification that they are audited financial statements for corporate entities, IFRS-compliant, and consistent across VAT and corporate tax filings.
→ Taxable Income and Deductions: Ensuring non-deductible items (like fines) are excluded and that proper validation exists for related-party costs.
→ Transfer Pricing and Related Parties: Checking for arm’s length pricing, presence of required documentation (Master File/Local File, especially if revenue > AED 200M), and timely submission of Form 204 (transfer pricing disclosure).
→ Free Zone Qualification: Rigorous checks for Free Zone companies claiming 0% corporate tax to ensure they meet all substance, activity, and documentation conditions under the corporate tax regulations.
The FTA imposes strict penalties for non-compliance, errors, or failure to respond to audit requests. Common penalties include:
→ Failure to file tax return: AED 10,000 to AED 20,000
→ Failure to maintain records: AED 10,000 to AED 20,000
→ Late payment of tax: 1% per month
→ Incorrect returns: 50% of underpaid tax
→ FTA audit obstruction: AED 20,000 or more
→ Failure to submit transfer pricing disclosure: AED 500 to AED 20,000+
Having proper corporate tax audit assistance protects your business from unnecessary penalties and reputational damage.
Example 1: Free Zone Company with Related-Party Loans
A Free Zone company claimed 0% tax but failed to maintain documentation for an intercompany loan to its mainland parent. The FTA challenged the 0% eligibility, imposed a 9% tax, and issued a penalty for transfer pricing non-compliance.
Example 2: Startup Missing Records
A startup that claimed large R&D expenses could not present supporting invoices and agreements. The FTA denied the deduction and issued an assessment plus 50% penalty.
In both cases, audit assistance from Young & Right would have prevented or mitigated the fallout.
Our services are tailored for:
→ SMEs and startups unfamiliar with FTA audits
→ Free Zone companies claiming 0% corporate tax
→ International groups with related-party transactions
→ Healthcare, tech, media, and logistics sectors under heavy compliance watch
→ Businesses seeking post-audit recovery or appeals
We also assist companies preparing for voluntary disclosures to correct past errors before they are audited.
At Young & Right, we combine technical expertise with a practical understanding of your business. Our firm is known for:
→ Senior advisor involvement in every engagement
→ Deep knowledge of UAE Corporate Tax Law, VAT, and FTA practice
→ Transparent communication, no legalese
→ Technology-driven compliance workflows
→ Strict confidentiality and client protection
With offices in Dubai and a growing roster of regional clients, we help businesses stay compliant, reduce tax risks, and grow with confidence.
The introduction of UAE Corporate Tax (CT) Law marks a significant step in the UAE's tax framework, requiring companies to comply with tax regulations and fulfill their tax obligations. With a new federal corporate tax in place—despite the UAE offering one of the lowest corporate tax rates globally—preparing for a potential tax audit by the Federal Tax Authority (FTA) is crucial for UAE business success.
Young and Right, as professional tax experts and corporate tax consultants in Dubai and across the UAE, offers comprehensive audit assistance and audit support services to help your company achieve tax compliance and ensure a smooth UAE corporate tax audit.
Navigating a corporate tax audit without professional tax audit assistance is a high-risk venture. With tax regulations evolving and the FTA expanding its reach, treating audit readiness as a priority is essential for compliance with the Federal Tax Authority. Whether you’re currently facing an audit or proactively seeking tax advice to report their tax liabilities correctly, Young & Right ensures you are protected, compliant, and confident in your company's tax position. If you need to get help from tax consultants to discuss the audit process or adhere to UAE tax processes, contact us today.
Prepare your business for FTA scrutiny with end-to-end audit support, from documentation and transfer pricing files to post-audit strategies for 2025–2026.
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