TRW & Co · Trade, shipping and audit
Audit Risks for Logistics and Marine Companies in the UAE
A logistics company audit UAE auditors carry out focuses on risks most businesses never face: duty-suspended goods that must be traced, fleets and vessels with complex depreciation, voyage revenue spanning year ends, fuel controls and related-party charges between hubs. This guide, current as of October 2026, explains each risk and how customs, tax and financial audits interact.
Key pointCustoms, tax and financial audits draw on the same data, so an unexplained stock difference found by the auditor can become a duty liability; reconciling customs records to the ledger before year end keeps the voluntary disclosure route open.
At a glance
Audited accounts often required
Ministerial Decision No. 84 of 2025 requires audits above AED 50 million revenue, for every Qualifying Free Zone Person and every tax group.
Logistics can qualify
Ministerial Decision No. 229 of 2025 lists ship operation, logistics services and designated zone distribution as qualifying activities, each with conditions.
Duty suspension is fragile
Goods in free zones, customs warehouses or transit that cannot be traced may be treated as imported without duty, with fines on top.
Short maritime time bars
Federal Decree-Law No. 43 of 2023 sets short limitation periods, often one year, for claims under carriage contracts and bills of lading.
Transfer pricing applies
Article 34 of the Corporate Tax Law requires arm's length pricing for management fees, container leasing, crewing and other intra-group charges.
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Logistics company audit UAE: the short answer
A logistics company audit UAE auditors run looks at the same financial statements as any other audit, but the risks sit in different places. Revenue is earned over voyages and shipments that straddle period ends. Assets are large, mobile and expensive to maintain. Goods move under customs regimes that suspend duty only while every movement is documented. Related-party charges flow between hubs in different countries. And freight, fuel and port costs are paid in several currencies to many counterparties.
Shipping, freight forwarding, warehousing and marine services businesses therefore face two kinds of audit at once: the annual financial audit, and audits by authorities, mainly customs and the Federal Tax Authority (FTA). The two interact. A customs finding can become a provision in the accounts; an inventory difference found by the auditor can become a duty liability.
This guide, current as of October 2026, explains the audit and regulatory framework, the main risk areas, how customs and financial audits relate, and what management should prepare. Audit and accounting work is delivered with our group company A&A Consultancy; TRW & Co, as a law firm, covers the legal and regulatory side: customs and tax disputes, maritime and logistics contracts, transfer pricing structures and claims.
Who carries out a logistics company audit UAE businesses face
The statutory audit
Mainland limited liability companies must have their accounts audited every year under the Commercial Companies Law, amended by Federal Decree-Law No. 20 of 2025 with effect from late 2025. Free zone companies follow their zone's regulations, and most zones require audited accounts with the licence renewal. Our guide to statutory audit requirements in the UAE covers the rules by jurisdiction.
Corporate tax audit requirements
Ministerial Decision No. 84 of 2025 requires audited financial statements for corporate tax purposes where revenue exceeds AED 50 million, for every Qualifying Free Zone Person and for every tax group. Many logistics businesses sit in free zones such as Jebel Ali or Khalifa Port's economic zones and rely on the 0% rate, so the audit is part of keeping that status. See our article on audited financial statements for corporate tax.
Ministerial Decision No. 229 of 2025 lists qualifying activities for free zone persons. It includes the ownership, management and operation of ships used in cross-border carriage, logistics services such as cargo handling, warehousing, freight forwarding and customs brokerage, and distribution of goods in or from a designated zone, each with conditions. The auditor's work on revenue streams therefore also supports the tax analysis of which income qualifies.
Customs audits
The UAE applies the GCC Common Customs Law. Federal customs policy is led by the Federal Authority for Identity, Citizenship, Customs and Port Security, while clearance and post-clearance audit are carried out by emirate administrations such as Dubai Customs. Post-clearance audits can revisit declarations several years after release. Dubai Customs also runs a voluntary disclosure system, formalised by a customs policy in 2024, which allows businesses to correct errors before an audit is notified. Our guide to customs audits and trade investigations explains the process.
Maritime law
Federal Decree-Law No. 43 of 2023 on Maritime Law replaced the 1981 maritime code and came into force in 2024. It covers ship registration, mortgages, maritime liens, arrest, charterparties, carriage of goods and limitation periods. Several claims under carriage contracts and bills of lading are subject to short time bars, often one year. That matters for auditors assessing whether cargo claims and receivables are still enforceable.
Customs and duty suspension: the highest-risk area
Logistics businesses rarely pay duty on most of the goods they handle. Goods move through free zones, customs warehouses, temporary admission and transit, where duty is suspended on condition that the goods leave or are properly accounted for. The risk is that goods which cannot be traced are treated as having entered the local market without duty.
A logistics company audit UAE auditors plan around this risk will usually test:
- reconciliations between the warehouse management system, customs declarations and the financial ledger;
- closure of transit and re-export declarations within the permitted period, with exit evidence;
- stock count differences, damaged and abandoned cargo, and how they were reported to customs;
- bank guarantees and deposits lodged with customs, and whether they are recoverable;
- valuation and classification used on import declarations where the company acts as importer of record.
For a freight forwarder or customs broker acting for clients, the exposure can arise even where the company never owns the goods. Brokers sign declarations, and authorities may pursue the declarant. Contracts should allocate responsibility for the accuracy of information supplied by clients. Our practice on customs and trade compliance advises on these allocations.
Run the customs reconciliation before the auditor does. A shortfall found by management can often be corrected through voluntary disclosure; the same shortfall found during a customs audit attracts fines as well as duty. Once customs notifies an audit, the voluntary route in Dubai generally closes.
Fleet, vessels and other assets
Trucks, vessels, containers, cranes and warehouses usually dominate the balance sheet. The accounting judgements are significant and attract close audit attention.
- Component depreciation. Under IAS 16, major components with different useful lives, such as engines or dry-docking costs for vessels, are depreciated separately. Dry-docking is usually capitalised and depreciated to the next docking.
- Useful lives and residual values. Scrap steel prices, environmental rules and second-hand markets affect residual values for vessels. Estimates should be revisited each year.
- Impairment. Falling charter rates, idle vessels or lost contracts are impairment indicators. Value in use calculations need supportable cash flow forecasts.
- Leases and charters. Under IFRS 16, time charters, bareboat charters, equipment leases and warehouse leases need careful analysis. A bareboat charter-in typically creates a right-of-use asset and lease liability; a time charter may contain a lease of the vessel plus a service component.
- Ownership and security. Vessel registration, mortgages and liens under the maritime law should match what the accounts say. Auditors may ask for registry extracts and financing documents.
Marine services and ship management
Ship managers, crewing agencies and marine services firms raise a different set of questions in a logistics company audit UAE engagement. Ship managers often hold owners' funds in trust or client accounts, so auditors check that those balances are segregated and not treated as the manager's own cash.
Crew wages, allowances and repatriation costs may be paid on behalf of owners and recharged, and the recharge basis should be documented. Marine contractors performing dredging, salvage or offshore support work usually recognise revenue over time on contracts, which brings estimates of progress, variations and claims into the audit. Insurance recoveries from hull and machinery or protection and indemnity cover should be recognised only when virtually certain.
Corporate tax depreciation follows the accounting figures in most cases, so asset judgements also affect taxable income. Fleet disposals between group companies raise transfer pricing questions.
Freight revenue, fuel and voyage costs
Revenue recognition
Under IFRS 15, freight and voyage revenue is generally recognised over time as the shipment or voyage progresses. At year end, voyages in progress must be split between periods, usually on a time or distance basis. Demurrage, detention and other variable charges are recognised only when it is highly probable that a significant reversal will not occur. Whether the company acts as principal or agent, for example when a forwarder arranges carriage through a third-party carrier, decides whether revenue is shown gross or net.
Fuel and bunkers
Fuel is often the largest cost. Auditors test bunker stocks on board, consumption against voyage reports, and purchase prices against supplier contracts and market benchmarks. Bunker surcharges billed to customers should reconcile to the underlying fuel cost formula in the contract. Weak fuel controls are a common route for fraud.
VAT on transport
International transport of goods and passengers is zero-rated under the VAT legislation, with Article 33 of the Executive Regulation setting out the detail, including some domestic legs that form part of an international journey. Article 34 zero-rates certain commercial vessels and aircraft. Purely domestic transport is standard-rated. Misclassifying domestic distribution as international carriage is a frequent finding. Current texts are on the Federal Tax Authority's legislation page.
Transfer pricing in logistics groups
Logistics groups often book revenue in one hub and incur costs in another. Typical related-party flows include ship management fees, crew management, container leasing, IT and network charges, agency commissions, intra-group freight and guarantees. Under Article 34 of the Corporate Tax Law, every related-party transaction must be at arm's length. Ministerial Decision No. 97 of 2023 requires a master file and local file where revenue is at least AED 200 million or group revenue is at least AED 3.15 billion, and the return's related-party schedule applies where aggregate related-party transactions exceed AED 40 million.
For a Qualifying Free Zone Person, transfer pricing compliance is also a condition of keeping the 0% rate. An intra-group charge that shifts profit into a free zone entity without substance risks both an adjustment and loss of qualifying status. Our pages on transfer pricing and qualifying free zone persons explain the rules.
How customs, tax and financial audits interact
| Audit | Carried out by | Main focus | Link to the others |
|---|---|---|---|
| Statutory financial audit | Registered external auditor | True and fair view of the financial statements | Provisions for customs and tax exposures; inventory and receivables testing |
| Customs post-clearance audit | Emirate customs administration | Valuation, classification, origin, duty suspension regimes | Findings become liabilities in the accounts; transfer pricing adjustments can affect customs value |
| FTA tax audit | Federal Tax Authority | VAT, corporate tax, transfer pricing | Uses accounting records and customs import data; VAT on imports links to customs declarations |
| Internal audit | In-house team or outsourced provider | Controls over operations, fuel, procurement and compliance | Finds and fixes issues before external audits; supports voluntary disclosures |
In a logistics company audit UAE authorities and auditors increasingly see the same numbers. Because the authorities share data, consistency matters. Import values in customs declarations, VAT returns and the general ledger should reconcile. A year-end transfer pricing adjustment that changes the price of imported goods may also require a customs correction. Our shipping and maritime practice and tax team coordinate these issues.
An illustrative scenario
Illustrative only; the parties are generic. A freight forwarding group runs a free zone warehouse at a Dubai port and a mainland trucking company. During the annual audit, the auditor finds that the warehouse system shows fewer pallets than customs records for several re-export consignments. Management explains that the goods were moved to the mainland company's trucks for delivery to a local customer, but no import declaration was filed.
The group's lawyers review the customs position and recommend a voluntary disclosure before any customs audit notice. The duty difference is paid and the fines exposure is reduced. The auditor requires a provision for the estimated liability at year end and reports a control weakness. The group then amends its customer contracts to make clients responsible for the accuracy of documents they supply, introduces a monthly three-way reconciliation and reviews whether the warehouse company's income still qualifies for the 0% free zone rate.
Risks and common mistakes
Treating customs records as operations, not finance
In many logistics businesses, customs declarations are handled by operations staff and never reconciled to the ledger. That leaves duty exposures invisible until an audit. Finance should own a regular reconciliation of customs data, warehouse records and accounts, with exceptions investigated promptly. The same data supports VAT returns on imports and the corporate tax analysis of free zone income.
Recognising voyage revenue too early
Recognising the full freight charge when a booking is made or a vessel departs overstates revenue for voyages in progress at year end. Under IFRS 15, revenue for carriage is generally recognised over time. Variable items such as demurrage need a separate assessment. Auditors will test cut-off around year end, so document the method and apply it consistently.
Ignoring time bars on cargo claims
Under the maritime law, several claims under carriage contracts and bills of lading must be brought within short periods, often one year. Claims that have become time-barred may no longer support a receivable or a contingent asset, and claims against the company may lapse. Track limitation dates in the claims register and involve lawyers before deadlines, not after.
Intra-group charges without documentation
Management fees, container leasing and network charges between group companies are often set by habit rather than analysis. Without benchmarking and intercompany agreements, the FTA may adjust them, and a free zone entity may lose its 0% rate. Document the arm's length basis, sign agreements before charges are made and keep evidence that the services were actually provided.
Preparing for a logistics company audit UAE: a checklist
- Reconcile customs data. Match declarations, warehouse records and the ledger, and close or explain every open transit and re-export.
- Review the fleet register. Confirm ownership, registrations, mortgages, components, useful lives and impairment indicators.
- Test revenue cut-off. Split voyages and shipments in progress at year end and support variable charges.
- Analyse fuel. Reconcile bunker purchases, stocks and consumption, and compare surcharges billed with contract formulas.
- Document related-party charges. Update intercompany agreements and transfer pricing analysis, and confirm free zone qualifying income.
- Review claims and contingencies. List cargo claims, disputes and limitation dates, and agree provisions with legal advice.
- Agree the timetable. Align audit fieldwork with licence renewal and corporate tax filing deadlines.
A logistics company audit UAE businesses go through each year can either expose problems or prevent them. Treat it as part of a single compliance cycle with customs and tax, not as an isolated annual event. Our group company A&A Consultancy carries out audit and accounting work; TRW & Co advises on customs and tax disputes, voluntary disclosures, logistics and warehousing contracts, maritime claims and group structuring. Where proceedings before UAE courts are needed, we work alongside locally licensed advocates. To discuss your business, contact our Dubai team at info@trw.co or +971 58 942 1012.
Frequently asked questions
01Do logistics companies in UAE free zones need an audit?
In most cases, yes. Most free zone authorities require audited financial statements as part of licence renewal. Separately, Ministerial Decision No. 84 of 2025 requires every Qualifying Free Zone Person to prepare audited financial statements for corporate tax purposes, whatever its size. A logistics company relying on the 0% free zone rate for qualifying activities such as logistics services or ship operation therefore needs an audit to keep that status.
02What do auditors look for in a shipping or logistics company?
Auditors focus on revenue cut-off for voyages and shipments in progress at year end, the valuation and depreciation of vessels, trucks and equipment, leases and charters under IFRS 16, fuel purchases and consumption, receivables from customers and agents, provisions for cargo claims, and related-party charges. Where goods move under customs duty suspension, they also test reconciliations between customs records, warehouse systems and the ledger, because untraced goods can create duty liabilities.
03How does a customs audit differ from a financial audit?
A financial audit is carried out by an independent auditor to give an opinion on the financial statements. A customs post-clearance audit is carried out by the customs administration to check whether declarations were correct, covering valuation, classification, origin and the use of duty suspension regimes. The customs audit can lead to demands for duty and fines. Its findings feed into the financial statements as liabilities or provisions, so the two should be coordinated.
04Is international freight subject to VAT in the UAE?
International transport of goods from or to the UAE is generally zero-rated, as are certain domestic legs forming part of an international journey and related services, under the VAT Decree-Law and Article 33 of the Executive Regulation. Purely domestic transport is standard-rated at 5%. Logistics businesses should document the international nature of each shipment and avoid treating domestic distribution as international carriage.
05Does UAE corporate tax apply to shipping companies?
Yes, corporate tax applies to shipping and logistics businesses in the normal way, at the standard rate above the threshold. Free zone companies can benefit from the 0% rate on qualifying income if they meet the conditions for a Qualifying Free Zone Person. Ministerial Decision No. 229 of 2025 lists the ownership, management and operation of ships used in cross-border carriage, and logistics services, among qualifying activities, subject to conditions and exclusions such as local transport.
06What is the time limit for cargo claims in the UAE?
Federal Decree-Law No. 43 of 2023 on Maritime Law sets limitation periods for maritime claims. Claims arising from contracts for the carriage of goods by sea and bills of lading are generally subject to a one-year time bar, with different periods for other types of claim. Contracts can affect how the periods apply. Businesses should record limitation dates in their claims register and take legal advice well before a deadline.
Sources and official materials
- Ministerial Decision No. 84 of 2025 on Audited Financial Statements — When audited statements are required for corporate tax
- Ministerial Decision No. 229 of 2025 on Qualifying and Excluded Activities — Shipping, logistics and distribution as qualifying activities
- Federal Decree-Law No. 43 of 2023 on Maritime Law — Ship registration, liens, carriage and limitation periods
- Dubai Customs — Clearance, post-clearance audit and voluntary disclosure
- Federal Authority for Identity, Citizenship, Customs and Port Security — Federal customs policy
- Federal Tax Authority: Legislation — VAT and corporate tax law, including transport zero-rating
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
