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DMCC Audit Readiness and Compliance
DMCC is a major commodities and trading hub. Companies there handle high value trades, multi-currency balances and international counterparties, so records need to be precise.
Four steps to readiness
Check status
We review your DMCC licence type and the tax position you are aiming for. We start with how commodities, gold, diamond, tea and general trading companies usually earn their income.
Tidy the ledger
We reconcile accounts and tag each DMCC revenue line to the right income category.
Prepare the file
We assemble the schedules, contracts and substance evidence a reviewer of a DMCC company will ask for.
Plan the year
We set monthly routines suited to commodities, gold, diamond, tea and general trading companies, so the next year-end is easier.
Multi-currency trade records that reconcile
A trading company in DMCC may buy in one currency, sell in another and bank in a third. Every trade needs a file that links the purchase contract, the sales contract, the invoices, the payment confirmations and the transport or inspection documents. Give each trade a unique reference and use it on every entry in the ledger.
Revalue open receivables, payables and foreign bank balances at each month-end using documented rates. Keep exchange gains and losses in their own account so they do not hide trading margin. A reviewer should be able to trace one trade from contract to cash without asking you for missing pieces.
Inventory in transit and held with others
Commodities are often stored in third-party warehouses or are still on a vessel at the reporting date. Keep warehouse receipts, storage statements and bills of lading, and confirm quantities with the holder in writing at year-end. Record when risk and ownership passed to you or to the buyer, because that decides which period the stock or the sale belongs to.
Hedges, advance payments and letters of credit should each have a separate schedule. Mixing them into trade balances makes the accounts difficult to follow.
What banks and counterparties ask for
Counterparties and lenders in commodity trade ask detailed questions before they extend credit or release payment. Have these ready, so each request can be answered from one file. Update the file after every large trade, not only at quarter-end.
- Recent financial statements or management accounts with a list of trading counterparties.
- A schedule of open positions, advances and security given.
- Evidence of the source of funds for large transfers.
- Know-your-customer files for new buyers and suppliers, kept up to date.
- A short note explaining any unusual movement in the accounts.
More questions
How do I record a trade that spans two year-ends?
Track it by trade reference. Decide from the contract terms when ownership and risk passed, and book revenue, cost and stock to the periods that follow.
Why keep counterparty files?
Banks and reviewers often ask who you trade with and why. Complete files show you know your counterparties and support the transactions in your books.
What exchange rate should I use?
Use a consistent, documented source and apply it the same way every month. Record the source in your accounting policy note.
Does DMCC set specific audit requirements?
Confirm the current requirement with the authority. For corporate tax, Qualifying Free Zone Persons must keep audited financial statements.
How do I keep trade records when prices move daily?
Record each trade with its date, quantity, price, currency and counterparty, and revalue open positions at period end using a rate source you document. Keep the contract, the delivery document and the payment advice with each entry. Consistency in the rate source matters more than which source you choose.
What to put in the file
- 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
Risks to watch in DMCC company books
Authority rules for DMCC
DMCC sets its own licence renewal and reporting requirements, so confirm what your authority asks for and keep records aligned with it.
Keeping your free zone tax status
Qualifying status is not automatic. It depends on income type, substance in the UAE and audited statements, so the records must show it.
Income tagging from day one
Coding income by type as it is booked is much easier than untangling it after the year closes.
Mainland and overseas clients
Where your customers are located matters, so keep client details and service descriptions on every invoice.
Where our service stops
We work under licence No. 1360308, as accountants, tax and risk consultants. That means preparing and reviewing your records. It does not include signing audit reports or statutory audit opinions.
Tell us your deadline
Share your year-end date and current accounting set-up, and we will suggest where to start.
Speak to our teamCall +971 50 771 2258 WhatsApp us Email us Numerix Accountants does not issue audit opinions or perform statutory audits, which are outside our licence.
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