Costs of a regular audit for Free Zone entity in Dubai

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traveler111

New member
Hello people,

As you're probably already aware of, audits will become mandatory for Free Zone entities in order to benefit of the 0% tax rate exception provided to Free Zone entities after the new 9% corporate tax rate hits us in July 2023.

As someone with a Free Zone entity in IFZA who never had to do any kind of audit, I was wondering how much I can expect to pay for such audit?

Simple corporate structure, single-owner who is a resident of the UAE with substance, about 75 invoices per months all paid by my clients via credit card online and under 1M AED revenue per year. We do social media management.

Anyone has a rough estimate of what I should be expecting to pay an auditor?

Thanks!

@Fred
 

traveler111

New member
@traveler111
As far as I know, regulation and requirements are not decided yet. Where did you hear the audit requirement?e
The regulations are still under advisement and compagnies are invited to comment and participate to shape it but they already put out the first draft so we should assume that most of it will stay the same.

You can find a very well explained PDF here: https://www.emiratesca.com/contents/uploads/documents/uae-corporate-tax-ecag-version-2-0-pdf.pdf
 

calnana

New member
Has there been any clarification on taxing personal crypto investing/trading?

Could this apply? (page 6)
“Income earned by Individual from activities carried out under a freelance license / permit OR from an activity which requires a license/permit to perform such activity as per local laws”
 

rowena

Entrepreneur
The regulations are still under advisement and compagnies are invited to comment and participate to shape it but they already put out the first draft so we should assume that most of it will stay the same.

You can find a very well explained PDF here: https://www.emiratesca.com/contents/uploads/documents/uae-corporate-tax-ecag-version-2-0-pdf.pdf
Then it looks like we need to deal with audit as well but I think we don't need it until the end of 2024. If your company financial year starts on 01 October, then you should be subject to CT starting from 01 October 2023 and your first tax return should be after 2023.
 

Nomad12

New member
Has there been any clarification on taxing personal crypto investing/trading?

Could this apply? (page 6)
“Income earned by Individual from activities carried out under a freelance license / permit OR from an activity which requires a license/permit to perform such activity as per local laws”
Good question, I remember there was some talk about a possible license requirement for trading crypto but never really understood if this actually applied to individuals doing personal trading...

"Meanwhile, Kemp said there are no direct bans on specific cryptocurrencies. “Rather, the new laws require persons engaging in crypto-related activities such as offering, issuing, promoting, listing and trading of cryptocurrencies, to be licensed by the Securities and Commodities Authority (SCA), and to obtain approval of offering documentation and other aspects of their operations."

 

traveler111

New member
Then it looks like we need to deal with audit as well but I think we don't need it until the end of 2024. If your company financial year starts on 01 October, then you should be subject to CT starting from 01 October 2023 and your first tax return should be after 2023.
Sounds about right but I wanted to see if anyone had paid for annual audits here and if they could share what is a normal price to do such audit.

In some Free Zones, it is actually mandatory for a few years now (DMCC for example) so I believe a lot of people have been through it here.
 

zzzzzz

Active Member
Has there been any clarification on taxing personal crypto investing/trading?

Could this apply? (page 6)
“Income earned by Individual from activities carried out under a freelance license / permit OR from an activity which requires a license/permit to perform such activity as per local laws”
Also page 13:
"Income of natural person will be taxable only if it is earned from their business activity carried out in the
UAE"

If you have UAE residence and trade at foreign brokers as individual with personal capital with stocks/crypto/derivatives/fx and make 100s or 1000s of trades, is that considered business activity carried out in UAE?
 

rowena

Entrepreneur
Sounds about right but I wanted to see if anyone had paid for annual audits here and if they could share what is a normal price to do such audit.

In some Free Zones, it is actually mandatory for a few years now (DMCC for example) so I believe a lot of people have been through it here.
Yes it is better to check how to deal with the audit thing. By the way, I wrote the wrong dates. If your company's financial year starts on 01 October, then you should be subject to CT starting from 01 October 2024 and you need to deal with the audit and returns in 2025.
 

JackAlabama

Entrepreneur
Hello people,

As you're probably already aware of, audits will become mandatory for Free Zone entities in order to benefit of the 0% tax rate exception provided to Free Zone entities after the new 9% corporate tax rate hits us in July 2023.

As someone with a Free Zone entity in IFZA who never had to do any kind of audit, I was wondering how much I can expect to pay for such audit?

Simple corporate structure, single-owner who is a resident of the UAE with substance, about 75 invoices per months all paid by my clients via credit card online and under 1M AED revenue per year. We do social media management.

Anyone has a rough estimate of what I should be expecting to pay an auditor?

Thanks!

@Fred
Still too early to tell inmo, also such random docs (which are not official) change frequently.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Still surprised no one knows the approximate cost of an audit in UAE. I understand the costs will vary wildly based on activity, turnover etc etc. But I can't even find an example cost on internet of someone who paid for audit...lol. Can anyone else find an example?

As an unrelated example last time I spoke to KPMG. They changed their rules and now they have to do due diligence on you before they even take you on as a client. I imagine this applies to all KPMG offices globally but I maybe wrong. The due diligence alone starts from approximately 2,500 euros for a natural person and then there is another cost for one on company. Then they can do audit and accounting services at another cost. For me it would have been 5 figure cost. Hopefully it is nothing like this in UAE and you can find local cheaper companies rather than using big 4 pricing.
 

debudubai

New member
Hello people,

As you're probably already aware of, audits will become mandatory for Free Zone entities in order to benefit of the 0% tax rate exception provided to Free Zone entities after the new 9% corporate tax rate hits us in July 2023.

As someone with a Free Zone entity in IFZA who never had to do any kind of audit, I was wondering how much I can expect to pay for such audit?

Simple corporate structure, single-owner who is a resident of the UAE with substance, about 75 invoices per months all paid by my clients via credit card online and under 1M AED revenue per year. We do social media management.

Anyone has a rough estimate of what I should be expecting to pay an auditor?

Thanks!

@Fred
Hey! Sorry for the random note. There doesn't seem to be an option to DM you. Any chance we can connect via email? I'm in the process of setting up an entity in IFZA and it would be great to learn a bit more about the process and so on.
 

Bill D

Silver Member
Also page 13:
"Income of natural person will be taxable only if it is earned from their business activity carried out in the
UAE"

If you have UAE residence and trade at foreign brokers as individual with personal capital with stocks/crypto/derivatives/fx and make 100s or 1000s of trades, is that considered business activity carried out in UAE?
Most brokers are now licensed in UAE, binance, kraken, etc, so I don't know if this make it even worst in term of taxation, or better ?

If you trade from UAE, your center of operation is from uae, then does it make you taxable at 9%, whether you trade on local or foreign brokers ?
 

rowena

Entrepreneur
Still surprised no one knows the approximate cost of an audit in UAE. I understand the costs will vary wildly based on activity, turnover etc etc. But I can't even find an example cost on internet of someone who paid for audit...lol. Can anyone else find an example?

As an unrelated example last time I spoke to KPMG. They changed their rules and now they have to do due diligence on you before they even take you on as a client. I imagine this applies to all KPMG offices globally but I maybe wrong. The due diligence alone starts from approximately 2,500 euros for a natural person and then there is another cost for one on company. Then they can do audit and accounting services at another cost. For me it would have been 5 figure cost. Hopefully it is nothing like this in UAE and you can find local cheaper companies rather than using big 4 pricing.
The big four is another thing and very expensive in any country. It shouldn't be more expensive than $1-2K for a company with under $1M turnover. Here is the example: Leading Audit Firms in Dubai | Auditing Companies in Dubai
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member

traveler111

New member
Still surprised no one knows the approximate cost of an audit in UAE. I understand the costs will vary wildly based on activity, turnover etc etc. But I can't even find an example cost on internet of someone who paid for audit...lol. Can anyone else find an example?

As an unrelated example last time I spoke to KPMG. They changed their rules and now they have to do due diligence on you before they even take you on as a client. I imagine this applies to all KPMG offices globally but I maybe wrong. The due diligence alone starts from approximately 2,500 euros for a natural person and then there is another cost for one on company. Then they can do audit and accounting services at another cost. For me it would have been 5 figure cost. Hopefully it is nothing like this in UAE and you can find local cheaper companies rather than using big 4 pricing.
That's why I'm posting that here, I was shocked to see that literally there is zero post or thread on Reddit or anywhere else telling us about the costs of such audits in the UAE.

I believe there is many local auditors in the UAE and that some Free Zones even have a full list of approved auditors on their websites so hopes are high that it won't be that expensive!

The big four is another thing and very expensive in any country. It shouldn't be more expensive than $1-2K for a company with under $1M turnover. Here is the example: Leading Audit Firms in Dubai | Auditing Companies in Dubai
Thanks for your reply! Have you personally or know someone who has recently gone through the process of such audit in the UAE or it's more of a guess based on what you have heard? (The 1-2k)
 

Sols

Staff member
Mentor Group Gold
Simple corporate structure, single-owner who is a resident of the UAE with substance, about 75 invoices per months all paid by my clients via credit card online and under 1M AED revenue per year. We do social media management.

Anyone has a rough estimate of what I should be expecting to pay an auditor?
Just to add another answer the original question, I'd estimate an audit like that to cost around 8,000 – 12,000 AED with a mid-range auditor. Depends on quality of the data and existing accounting records. You can certainly find cheaper auditors, and more expensive.
 

rowena

Entrepreneur
That's why I'm posting that here, I was shocked to see that literally there is zero post or thread on Reddit or anywhere else telling us about the costs of such audits in the UAE.

I believe there is many local auditors in the UAE and that some Free Zones even have a full list of approved auditors on their websites so hopes are high that it won't be that expensive!
There are too many auditors in UAE but it is hard to find good one with good pricing. REGISTERED TAX AGENTS

Thanks for your reply! Have you personally or know someone who has recently gone through the process of such audit in the UAE or it's more of a guess based on what you have heard? (The 1-2k)
I just asked my friend who has a DMCC company. He should have $1-2M yearly turnover and told me that he pays 6000 AED for audits.
 
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Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Have you personally or know someone who has recently gone through the process of such audit in the UAE or it's more of a guess based on what you have heard? (The 1-2k)

Just in case anyone missed it. Scroll to very bottom of link @rowena supplied below. It has actual pricing per monthly transaction amounts. I missed it first time around conf/(%.

 
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