DDA Free Zone Audit Readiness and Compliance

What slows down a DDA company year-end

• Authority rules for DDA. Dubai Development Authority sets its own licence renewal and reporting requirements, so confirm what your authority asks for and keep records aligned with it.
• Aiming for 0% corporate tax. To access the 0% rate on qualifying income, a free zone company has to satisfy the Qualifying Free Zone Person conditions. One of these is audited accounts.
• Splitting your income streams. Each revenue line should be tagged so that qualifying and non-qualifying income can be separated at year-end.
• Selling outside the zone. Work for customers outside the free zone needs clear contracts and invoices, since it can affect tax treatment.

Revenue from content, campaigns and licences

Media, technology and creative companies under the Dubai Development Authority often earn from several sources in the same month. These include production fees, retainers, licensing royalties, advertising and software subscriptions. Each stream should have its own revenue account, invoice template and supporting contract.

Project-based work needs a work-in-progress schedule. If a campaign is billed in stages, record how much has been delivered, how much invoiced and how much remains. This puts revenue in the right period. Where one client contract covers several deliverables, split the fee between them in the contract itself. That way the allocation is agreed with the client and not decided afterwards.

Freelancers and subcontractors

Creative businesses rely on freelancers, studios and production crews. For every payment keep the contract or purchase order, the invoice, proof of payment and a note of what the work was for. If the supplier is overseas, record the country and currency and keep the bank transfer advice.

Allocating these costs to the client project they served lets you show margin by job. It also makes it easier to spot when a supplier cost has been booked twice or to the wrong period.

Equipment and software spend

Creative and technology companies spend steadily on tools that are easy to forget. A short quarterly look at this list keeps costs under control and the asset records accurate.

• Capitalise cameras, servers and studio equipment in the asset register with serial numbers.
• Keep software subscriptions on a schedule showing renewal dates and monthly cost.
• Separate development or production costs from day-to-day running expenses.
• Review the list every quarter to cancel unused tools and catch duplicate charges.
• Keep the licence agreement for any third-party content or music used in client work.

Evidence reviewers usually request

• Licence, lease and shareholder documents
• Revenue analysis split by qualifying and non-qualifying income
• Bank reconciliations at year-end
• Contracts supporting major income and cost items
• Fixed asset register and depreciation workings
• Evidence of staff, premises and decision-making in the UAE

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