As businesses adapt to corporate tax in the UAE, several common issues have already surfaced. If you want to avoid unnecessary penalties and headaches, here’s what to watch for.

1. Delaying Tax Registration
Some businesses assume corporate tax doesn’t apply to them. Registration is mandatory, even if income is below the threshold.

2. Misclassifying Income or Entities
Free zone companies may qualify for 0% CT only under strict conditions. Misclassifying can lead to costly mistakes.

3. Ignoring Transfer Pricing Rules
Related-party transactions now fall under OECD-aligned regulations. Proper documentation is critical.

4. Lack of Internal Controls
Without strong accounting systems, businesses risk filing incorrect returns. Invest in professional help or software.

5. Unpreparedness for Audits
The FTA may audit any business. Keep documentation for at least 7 years and ensure readiness for review.