A young, service-weighted population
Meydan’s membership skews towards services and digital businesses: consultants, agencies, e-commerce sellers, software and media firms. Many are recently formed, owner-operated, and running on a bank account plus a spreadsheet.
That profile produces a specific set of issues. Revenue is often from a mix of UAE and overseas customers, which matters for both VAT and corporate tax. Overseas software and advertising spend is substantial, which brings reverse charge obligations that are almost universally missed. E-commerce sellers face marketplace settlement reporting that does not map neatly onto an accounting system. And substance for QFZP purposes is a genuine question for a business whose owner works from wherever they happen to be.
None of these are difficult once identified. All of them are invisible until someone looks.
Who this is for
Meydan companies in consultancy, marketing and creative services, e-commerce, technology and media. Owner-operated businesses with straightforward but unrecorded finances.
Also Meydan companies buying significant services from overseas — software subscriptions, advertising platforms, offshore development — which is nearly all of them and which creates a reverse charge population most of them do not know they are in.
What the work involves
How we run it:
- Confirm corporate tax registration, and assess the penalty position if it is missing.
- Test the VAT threshold against a rolling twelve-month figure, including the forward-looking test.
- Set up bookkeeping appropriate to a service or e-commerce business, including platform and payment gateway reconciliation.
- Identify the reverse charge population — overseas software, advertising, contractors — and get the entries right.
- Reconcile marketplace and gateway settlements where the business sells online, since gross sales and net settlements are different numbers.
- Prepare financial statements to support the tax computation.
- Assess QFZP realistically, and compare against Small Business Relief.
- File the corporate tax return and run the VAT cycle.
Reverse charge: the entry almost nobody makes
A Meydan services or e-commerce business typically buys a substantial amount from outside the UAE: design software, cloud hosting, advertising on international platforms, freelance development, SaaS subscriptions.
Every one of those is a service imported into the UAE, and the reverse charge mechanism applies: the buyer declares output tax on the purchase and, where entitled, recovers the same amount as input tax in the same return.
For a fully taxable business the net cash effect is nil, which is precisely why the entries get skipped. But their absence is one of the first things noticed when a return is examined — a business with obvious overseas costs and no reverse charge entries at all is an immediate anomaly.
The fix is a configuration question rather than a judgement one: set the tax codes correctly at the point of entry and it happens automatically thereafter.
E-commerce settlements are not revenue
For online sellers, the most common bookkeeping error is treating the money received from a marketplace or payment gateway as revenue.
It is not. It is gross sales less commission, less payment processing fees, less refunds, less advertising deducted at source, less whatever else the platform nets off before remitting. Recording only the net understates revenue, understates costs, hides the actual commission rate, and produces a VAT return based on the wrong figure.
Proper treatment requires reconciling the settlement report to gross sales, recognising each deduction as the expense it is, and handling refunds and chargebacks correctly. It is more work than recording a bank deposit, and it is the only way the business can see its real margin — which for most e-commerce sellers is the number that determines whether the business works at all.
What goes wrong
These are the failures we are brought in to correct, in rough order of frequency:
- Assuming formation included tax registration. It did not.
- No reverse charge entries in a business with obvious overseas software and advertising costs.
- Recording marketplace settlements as revenue, which hides both the true revenue and the true cost base.
- Assuming QFZP status where the owner works from anywhere and substance in the zone is nominal.
- Missing the Small Business Relief election, which for this population is frequently the relevant relief.
- Measuring the VAT threshold against the financial year rather than a rolling twelve months.
- Personal and business spending through the same account, which makes every subsequent step harder.
Deadlines that apply
Registration immediately if it is not in place, because Filing within 7 months of financial year end (by 31 July 2026 for a December 2025 year end) waives the AED 10,000 late-registration penalty
Bookkeeping should start now rather than at the year end — for an e-commerce business in particular, reconstructing twelve months of marketplace settlements retrospectively is substantially harder than reconciling them monthly. The Small Business Relief expiry on 31 December 2026 is the planning date for record quality.
What lands on your desk
- Corporate tax registration confirmed or completed
- Bookkeeping set up with correct tax codes, including reverse charge
- Marketplace and gateway settlements reconciled to gross revenue
- VAT registration assessment and returns where required
- Financial statements supporting the tax computation
- A realistic QFZP versus Small Business Relief comparison
- Corporate tax return prepared and filed
What we need from you
The list is short and you will have most of it already:
- Meydan licence and formation documents
- Corporate tax registration status
- Bank statements since incorporation
- Marketplace and payment gateway settlement reports, where applicable
- Details of overseas suppliers and subscriptions
- Revenue split between UAE and overseas customers
- Details of premises arrangements in the zone
What it costs
Scaled to the size of business this zone actually hosts. Registration is a fixed fee, bookkeeping is a modest monthly fee at low volumes, and the return is a fixed annual fee.
E-commerce businesses are priced slightly higher for bookkeeping because settlement reconciliation is genuinely more work than processing bank transactions — and it is the part that makes the numbers mean something.
Related
Frequently Asked Questions
Does a Meydan company need to register for corporate tax?
Yes. Registration follows carrying on business rather than making a profit, and it applies to free zone companies including dormant ones. If nobody mentioned it at formation, assume it has not been done — the penalty is AED 10,000 per entity.
What is reverse charge and does it apply to us?
If you buy services from outside the UAE — software subscriptions, cloud hosting, international advertising, offshore developers — then yes. You declare output tax on the purchase and, where entitled, recover the same amount as input tax. The net cash effect is nil for a fully taxable business, which is exactly why the entries get missed.
We sell on a marketplace. Is the money we receive our revenue?
No. It is gross sales less commission, processing fees, refunds and advertising deducted at source. Recording only the net understates both revenue and costs, hides your real commission rate, and produces a VAT return based on the wrong figure.
Will we get the 0 per cent free zone rate?
Only if you meet the QFZP conditions, which include substance in the zone with core income-generating activities performed there. For an owner-operated consultancy working from anywhere, that is a genuine question rather than a formality. Small Business Relief is frequently the more realistic route.
What is Small Business Relief?
Where revenue is at or below AED 3,000,000 in the current and every previous tax period, you can elect to be treated as having no taxable income. It is elected in the return rather than automatic, and it is currently set to expire on 31 December 2026.
When do we need to register for VAT?
Once taxable supplies exceed AED 375,000 of taxable supplies and imports over the previous 12 months, or expected within the next 30 days over a rolling twelve months, or where you expect to exceed it within thirty days. It is a rolling test rather than a financial year test, which is why businesses notice it late.
We use one account for business and personal spending. Does it matter?
Yes — it makes every subsequent step harder and it weakens the deductibility of genuine business costs. Separating them is the single cheapest improvement available, and it should happen before the bookkeeping rather than during it.
Then you have a reverse charge obligation, and almost nobody in this population is making the entries. It is a configuration fix, not a judgement call.
Check my compliance status 058 101 9570
Last reviewed 27 July 2026. Rates, thresholds and deadlines change — the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.