Common issues include:
- Applying zero-rating to exports without retaining the required evidence that the goods left the UAE and that the transaction meets the relevant conditions.
- Recording imports in the wrong VAT period or failing to reconcile customs data with the VAT return and purchase ledger.
- Applying the reverse charge mechanism without checking the nature of the transaction, supplier status, place of supply, and supporting documents.
- Confusing a designated-zone movement with a transaction that automatically falls outside VAT; the legal conditions and nature of the movement must be tested.
- Incorrect inventory valuation, unrecorded landed costs, stock write-offs, damaged goods, samples, free-of-charge items, or stock discrepancies.
- Booking sales net of marketplace, agent, freight, or payment-provider deductions, which can understate revenue and distort margin analysis.
- Failing to identify related-party cross-border purchases and document transfer-pricing support where required.
- Inconsistent foreign-currency rates, credit notes, rebates, and cut-off between goods dispatch, delivery, invoicing, and accounting.
Each transaction should be assessed using the real supply chain and current legal requirements; export or free-zone status alone is not proof of a particular VAT result.
- Applying zero-rating to exports without retaining the required evidence that the goods left the UAE and that the transaction meets the relevant conditions.
- Recording imports in the wrong VAT period or failing to reconcile customs data with the VAT return and purchase ledger.
- Applying the reverse charge mechanism without checking the nature of the transaction, supplier status, place of supply, and supporting documents.
- Confusing a designated-zone movement with a transaction that automatically falls outside VAT; the legal conditions and nature of the movement must be tested.
- Incorrect inventory valuation, unrecorded landed costs, stock write-offs, damaged goods, samples, free-of-charge items, or stock discrepancies.
- Booking sales net of marketplace, agent, freight, or payment-provider deductions, which can understate revenue and distort margin analysis.
- Failing to identify related-party cross-border purchases and document transfer-pricing support where required.
- Inconsistent foreign-currency rates, credit notes, rebates, and cut-off between goods dispatch, delivery, invoicing, and accounting.
Each transaction should be assessed using the real supply chain and current legal requirements; export or free-zone status alone is not proof of a particular VAT result.