Related-Party Plant Hire and Subcontracting: Disclosure

Third-party plant hire rate cards and quoted rates for equivalent equipment and periods — the market is transparent enough to benchmark well. Your disclosure shows the comparable rates and the adjustment per year; the ongoing hire agreement is then repriced to the benchmarked level.

Revenue recognised on the wrong basis, retentions and variations mistreated for VAT timing, subcontractor VAT mishandled, and project cut-off failures at period ends. Each repeats across the project life — rebuild contract by contract, then aggregate by period. Retain the complete file for five years under Article 3 of Cabinet Decision No. 74 of 2023, or seven years where it supports a corporate tax return (Article 56 of Federal Decree-Law No. 47 of 2022) — the disclosure's value is collected at verification, years later.

With the contract-by-contract revenue rebuild: each contract's revenue restated per period under the correct basis, aggregated to the period corrections for VAT output tax and the corporate tax restatement. File within 20 business days of awareness; the rebuild is the disclosure's main working paper.

Under the VAT time-of-supply rules — whether VAT is due on certification or on release of the retention depends on the analysis. Confirm the current position on tax.gov.ae and correct per period with the retention mechanics and contract terms shown.

Analyse each variation under the time-of-supply rules with the instruction trail as evidence — verbal variations formalised late are the weak point. The disclosure assigns each variation to its correct period; formalise instruction documentation going forward as remediation. Miss the window and the 1% monthly voluntary disclosure penalty keeps running until you file, and an audit notice issued first adds a fixed 15% of the tax difference (Cabinet Decision No. 40 of 2017 as amended; No. 75 of 2023 for corporate tax) — the window is the cheapest route.

Analyse the JV's actual mechanics from the JV agreement and correct each venturer's position consistently — mismatched JV filings are a standard verification flag. The lead document is the agreement, not the accounting treatment. Respond to any verification query from the disclosure file within days; the response speed is the variable you control.

Twenty business days from awareness where the understatement exceeds AED 10,000 (Article 10, Cabinet Decision No. 74 of 2023; an error of AED 10,000 or less is corrected in the next tax return instead) — awareness being when the revenue-recognition or treatment error was identified, often during a project review or audit. Date the discovery memo to that review and file by day 15. Calendar the 20-business-day deadline from the discovery memo date, and file by day 15 so the final days are buffer, not work time.

For multi-project businesses, yes — the contract rebuild methodology, time-of-supply analyses, and JV mechanics need professional construction. Single-project simple corrections can be filed directly with clean workings. Expect the FTA to re-perform your workings; the method shown step by step is what makes verification a formality.