External Audit Services in IFZA

How IFZA Defines Turnover

Turnover means the gross amount of income derived during a financial year. It should be determined on market-related principles, similar to those applied for UAE Corporate Tax Law, and — importantly — income from all business activities undertaken by the company must be included.

That last point catches companies out. Licensees running several activity lines under one licence sometimes test only their main revenue stream. The threshold applies to the total.

• Gross, not net — turnover is measured before costs, not as profit.
• All activities count — every business activity the company undertakes is included.
• Market-related principles apply, consistent with the Corporate Tax approach.
• Measured per financial year, so a single strong year can move you into the audited bracket.

How IFZA Defines an Employee

An employee is any individual performing work or services under an executed employment contract — whether directly sponsored or otherwise — provided they operate under the company's supervision and contribute to its business operations.

This is broader than a visa count. Staff seconded from a related entity, or engaged under contract but working under your direction, can fall inside the definition. The test is also measured at any point during the year, not at year end — so a company that peaked at eleven staff in June and finished with seven still fails the test.

• Not limited to your own sponsorship — "whether directly sponsored or otherwise".
• Executed employment contract is the starting point for the definition.
• Under your supervision and contributing to business operations.
• Peak headcount governs — measured at any point during the completed year.

Timing, Signing and Submission

Unlike free zones with a single fixed calendar deadline, IFZA ties the obligation to your own renewal date. That is simpler in one sense and riskier in another — there is no zone-wide reminder date, so the responsibility to plan sits entirely with you.

• Submitted during renewal — the statements form part of the trade licence renewal process, annually.
• Period covered — the most recently completed financial year as at the renewal date.
• Financial year — determined at incorporation and stipulated in your Articles of Association at Section 75.
• Signature — electronically signed by the authorised signatory, being a Manager, Director or Shareholder.
• Channel — submitted via the electronic form shared during the renewal process.

Who Can Prepare Your IFZA Audit?

Any registered UAE auditor may be used for the preparation of audited financial statements. IFZA does not currently restrict you to a closed approved-auditor list, which sets it apart from DMCC, RAKEZ, DAFZA and JAFZA, where the zone maintains its own register and rejects reports from firms outside it.

That flexibility is real, but it puts the burden of quality on you. An audit accepted at renewal still has to withstand Federal Tax Authority scrutiny and support your Corporate Tax position, so the choice of firm matters even where the zone does not mandate one.

Scenario: Consultancy Caught by the Headcount Test

An IFZA consultancy turning over AED 900,000 assumed it qualified for simplified filing. It had briefly employed eleven people during a project peak before returning to six. Because the test is measured at any point during the year, the employee condition failed and full audited statements were required. KGRN identified this two months before renewal and completed the audit in time.

Scenario: Trading Company Using One Audit Twice

An IFZA trading company with AED 12 million turnover needed audited statements for both its Corporate Tax position and its IFZA renewal. Rather than treating these as separate exercises, KGRN prepared a single IFRS for SMEs audit that satisfied the Federal Tax Authority filing and was then submitted for the licence renewal — one engagement, one fee, both obligations met.