Corporate Tax Health Check

Filing correctly addresses the current period going forward. A health check looks backward and sideways — it independently re-tests the positions already taken in filed returns, the registration and profile details on record, and any Free Zone or related-party positions, to confirm they would hold up if the FTA reviewed them today. It is a diagnostic exercise, not a filing exercise, and it produces a written report rather than a submission to the FTA.

Yes — arguably it is most valuable precisely when there is no live FTA matter, because every finding can still be addressed on the taxable person's own terms and timeline. A health check performed after an audit notification has already arrived is functionally closer to audit-readiness work under time pressure; one performed with no notification pending has the full range of remediation options available, including the more favourable voluntary disclosure route where a genuine error is found.

No — a health check is an internal diagnostic engagement between PNPC and the client. It is not filed with, or reported to, the FTA, and its findings remain the client's own confidential information unless and until the client chooses to act on them, for example by filing a voluntary disclosure. The report itself is a working document to guide the client's own decisions, not a submission.

It covers four broad areas: whether your Corporate Tax registration and EmaraTax profile are accurate and complete; whether your taxable income computation correctly applies the add-backs, deductions, and elections the Corporate Tax Law requires; whether any Free Zone Qualifying Free Zone Person claim genuinely meets all of its conditions; and whether related-party transactions are priced and documented defensibly. The exact scope is agreed with you at the outset based on your structure and risk profile.

Scope and fee depend on the number of entities, tax periods, and the complexity of Free Zone and related-party positions involved — a single straightforward entity with one filed period is a modest, fixed-scope engagement, while a multi-entity group with several periods and Free Zone claims is priced accordingly. We provide a written scope and fee estimate before beginning substantive work. Timelines typically run from a few weeks for a simple entity to six to eight weeks for a more complex group.

Because the QFZP conditions — adequate substance, the Qualifying Income mix, the de minimis threshold, and audited financial statements — must all be satisfied together for a given tax period, and failing any one of them generally means the entity is treated as a standard, non-Qualifying Free Zone Person for that period, converting income that would otherwise have been taxed at 0% to the standard 9% rate. There is no partial credit for mostly meeting the conditions, which makes this one of the highest-consequence areas to get independently re-checked.

There is no automatic obligation triggered by the health check itself; it is a diagnostic report, and what you do with its findings is your decision. That said, where a genuine error is identified, the practical and financial case for correcting it promptly through a voluntary disclosure is usually strong, because the favourable penalty treatment available for self-correction under the Tax Procedures Law disappears once an FTA audit notification is issued.

Yes, and this is a common scenario. We independently re-derive the computation and re-test the underlying positions from first principles, rather than simply reviewing whether the original preparer's arithmetic was internally consistent — the FTA would test the substance of the position regardless of who prepared the original return, so the health check does too.

The core scope is Corporate Tax, but because VAT and Corporate Tax records frequently touch the same underlying transactions, we flag any VAT-relevant inconsistency we identify during the review even though a full VAT health check is a separate, distinctly scoped engagement. Where a client wants both reviewed together, we can scope a combined engagement.

There is no statutory requirement to run one at any particular interval — it is a discretionary, proactive exercise. In practice, running one after the first one or two Corporate Tax filing cycles is valuable given how much interpretive guidance has developed since the earliest returns were filed, and re-running a scoped check after any material business change — a new Free Zone entity, a significant related-party arrangement, a restructuring — is generally worthwhile.

Yes — this is one of the highest-value times to run one. A Corporate Tax exposure discovered by an investor's or buyer's own due diligence team, rather than by you first, tends to get treated more conservatively by the counterparty, can slow the transaction, and can become a specific indemnity or escrow condition in the deal terms. Running the health check first lets you remediate what can be fixed and disclose clearly what cannot, on your own terms.

That is a genuinely useful outcome in itself — a clean report gives the business documented assurance, useful for its own governance, for investor or lender conversations, and for board reporting, that its Corporate Tax position has been independently tested and holds up. We do not manufacture findings to justify the engagement; where the position is sound, the report says so plainly.

No — they serve different purposes. A statutory financial audit expresses an opinion on whether the financial statements present fairly under the applicable accounting standard. A Corporate Tax Health Check tests whether the Corporate Tax return correctly reflects those financial statements and the specific tax law provisions that convert accounting income into taxable income. The two are complementary; the health check in fact starts by reconciling the audited financial statements to the filed Corporate Tax return as one of its first steps.

Scope is agreed at the outset and can cover a single entity, a subset, or the full group, including entities that have formed a Tax Group election for Corporate Tax purposes. For a Tax Group, the review also tests the consolidated position and the intra-group eliminations, since the FTA generally reviews the group's consolidated return but can still request records from individual member entities.

At minimum: the filed Corporate Tax returns and their computation workpapers for the periods in scope, the audited or management financial statements for those periods, the trade licence and EmaraTax profile details, and a schedule of any related-party transactions. Free Zone entities additionally need their Free Zone licence, lease or facility documentation, and evidence supporting the QFZP conditions. We confirm the full list against your specific structure at scoping.

Scope is agreed at the outset, but reviewing only the most recent period while ignoring earlier filed periods leaves those earlier periods equally exposed and untested — they remain open to FTA review in their own right. Most clients scope the review to cover every period filed to date, particularly for the earliest tax periods, which were filed with the least settled interpretive guidance available at the time.

Yes. A narrowly scoped review focused on one specific concern is a legitimate and proportionate engagement, and we price and scope it accordingly. The trade-off is that a narrow scope only gives assurance on the area reviewed — it does not tell you whether the computation, related-party pricing, or other positions outside that scope would also hold up.

Not quite — a health check reviews positions already taken in filed returns and an existing registration. If you have not yet registered or filed, the more relevant starting point is a Corporate Tax Impact Assessment, which establishes your taxable person status, applicable tax period, and likely liability from first principles, ahead of registration and the first filing.

Yes, where a Tax Group election is in place. We review whether the ownership and control conditions for the group continue to be satisfied, whether the consolidated return correctly reflects intra-group eliminations, and whether each member entity's individual position — including QFZP status for any Free Zone member — has been correctly incorporated into the group position.

A statutory audit opinion addresses whether the financial statements present fairly under the applicable accounting standard — it is not itself an opinion on whether the Corporate Tax return correctly applies the Corporate Tax Law to those financial statements. It is entirely possible, and not unusual, for financial statements to be fairly presented while the tax computation built from them still contains an error. Where our findings differ from an existing position, we set out the specific legal basis for our conclusion so the client and their other advisors can evaluate it directly.

They overlap heavily but are not identical. A health check is scoped around the target's own filed positions and internal risk tolerance. Tax due diligence for a transaction is scoped around what a specific buyer or investor needs to know to price and structure a deal, and often needs to be delivered to a tighter timeline and in a format suited to transaction documentation (representations, warranties, indemnity schedules). We can run either, and a recent health check materially shortens a subsequent due diligence exercise.

No — a meaningful health check requires reviewing your actual filed returns, computation workpapers, and financial statements, which cannot be done anonymously. What we can do is have an initial, no-commitment scoping conversation about your general situation before any engagement or document sharing begins, so you understand what a review would involve before committing to it.

Nothing happens automatically — the report is not filed with or reported to the FTA. But an ignored finding does not disappear; it remains exactly the exposure it was when identified, and it stays that way until either the business corrects it or the FTA finds it independently, at which point the more favourable voluntary disclosure penalty treatment is no longer available.

Yes. We retain the report and its supporting workpapers as part of our own engagement file, consistent with the broader Corporate Tax record-retention expectation of seven years from the end of the relevant tax period. We recommend clients retain their own copy of the report and the underlying evidence for at least the same period.

Yes. A prior voluntary disclosure is itself a position that can be tested — we review whether the disclosure correctly and completely addressed the underlying error, or whether it left a related issue unaddressed. A disclosure that fixed the symptom but not the root cause can leave a recurring version of the same error in later periods.

We work with what is available and are explicit in the report about which conclusions rest on complete records versus which are qualified because supporting documentation for that specific period could not be located. An incomplete record for an early period is itself a finding worth noting, since it affects how defensible that period's position would be if the FTA asked for the same documentation.

Yes, scope is the client's decision. The consideration to weigh is that the earliest filed periods are often the ones with the least settled interpretive guidance behind them at the time of filing, which can make them, in practice, more rather than less likely to contain a finding — 'less worried about' and 'lower risk' are not always the same thing until the review is actually done.

Where relevant, yes. ESR notification and reporting obligations were discontinued for financial years starting on or after 1 January 2023 under Cabinet Decision No. 98 of 2024, so there is no ongoing ESR filing to test for current periods. Where an entity has an earlier financial year with a historical ESR filing history, we review that history for completeness as part of the broader diagnostic, and note that the substance evidence gathered for a QFZP determination under Corporate Tax is a separate, distinct legal test in its own right.

A documentation gap means the underlying position is substantively correct but the contemporaneous evidence supporting it — a benchmarking study, board minutes, a technical memo prepared at the time — is thin or missing; the fix is to build that record now. A genuine error means the position itself is wrong under the Corporate Tax Law, regardless of documentation; the fix generally involves correcting the position and assessing whether a voluntary disclosure is warranted. The two require materially different remediation, which is why we classify every finding as one or the other rather than a single undifferentiated 'issue'.

Yes, this is a standard part of the review for any client with a foreign parent, affiliate, or personnel working across borders. We assess whether the UAE branch's own filed position correctly reflects income attributable to the UAE presence, and separately flag where foreign group personnel working extensively on UAE matters — or UAE personnel supporting foreign operations — could be creating a Permanent Establishment question that has not yet been considered on either side.

Yes, and this is a common and entirely workable arrangement. The health check is a discrete, bounded engagement — it does not require replacing your existing advisor, and many clients use it specifically as an independent check alongside an existing advisory relationship, then decide separately whether to act on any findings through their existing advisor, through PNPC, or jointly.

Yes — it gives the incoming advisor a documented, independently tested starting point rather than having to take the prior filings on trust, and it gives you clarity on whether anything needs remediating before responsibility for the position transitions. Many clients commission a health check specifically at the point of changing advisors for exactly this reason.

We rate each finding on two dimensions: the likely quantum of adjustment if the position were disallowed, and the likelihood the position would actually be tested and surface under FTA scrutiny given its nature and how common it is as a review focus. A finding that is both financially significant and squarely within an area the FTA is known to test closely — QFZP status or related-party pricing, for instance — is rated highest priority; a small, low-probability documentation gap is rated lower.

A QFZP failure generally means the entity's income for the specific tax period in which the conditions were not met is taxed at the standard rate rather than 0% on Qualifying Income for that period — it is assessed period by period, not as a single blanket retroactive reclassification across every year the entity has ever filed. Whether an earlier period is also affected depends on whether the same failure existed in that earlier period specifically, which is exactly what the health check tests for each period in scope.

Yes. A mid-year health check typically focuses on already-filed prior periods rather than the current, still-open period, though it can also flag emerging issues in the current period's data as an early warning ahead of the eventual filing. Running it mid-year, rather than waiting until immediately before the filing deadline, gives more time to act on any findings before the next return is prepared.

Where the business has material third-party or related-party financing, we test the interest deduction position as its own specific line — confirming whether the general interest deduction limitation has been correctly applied against the relevant adjusted earnings figure, and whether any related-party financing arrangements underlying the interest expense have arm's length support of their own.

Yes, where Small Business Relief has been claimed. Small Business Relief is not available to certain categories of taxable person, including members of a multinational enterprise group meeting the relevant consolidated revenue criteria, among other exclusions set out in the applicable Ministerial Decision. We re-test whether the claimant genuinely fell outside these exclusions for each period the relief was claimed, since this is a condition that can change if the wider group's structure or revenue changes.