Runway disappears fastest when cash leaks through preventable tax errors. In the GCC and wider MENA region, regulators are tightening rules while investors are demanding cleaner books. Here are seven high‑impact tax mistakes that quietly drain cash—and what founders can do this week to fix them.

1) Late VAT registration and filings

Why it hurts: Penalties, interest, and blocked refunds add up quickly. Missed returns also raise red flags in diligence. Fast fix: Track rolling 12‑month revenue monthly, pre‑prepare documents for registration, set automated reminders for filing dates, and separate VAT collected from operating cash.

2) Zero‑rated vs exempt confusion

Why it hurts: Misclassifying revenue can block input‑tax recovery and inflate costs. Fast fix: Map every product and geography to the correct VAT treatment. Keep a one‑page matrix for finance and sales so invoices are issued correctly from day one.

3) E‑invoicing and e‑receipts not aligned to your GL

Why it hurts: If e‑invoices/e‑receipts don’t reconcile to the general ledger, refunds stall and audits drag on. Fast fix: Integrate your billing/POS with the mandated e‑systems, run monthly tie‑outs (e‑invoice totals to GL revenue and VAT control accounts), and store evidence logs for each period.

4) Withholding‑tax blind spots on cross‑border payments

Why it hurts: Services, royalties, and interest paid abroad can trigger withholding tax. Ignoring this creates unexpected liabilities and payment blocks. Fast fix: Before paying a foreign vendor or HQ, check domestic rules and treaty relief. Add contract clauses for gross‑up, collect residency certificates, and document the rate applied.

5) Related‑party charges without transfer‑pricing support

Why it hurts: Management fees, intercompany loans, and IP charges draw extra scrutiny. Without documentation, deductions may be denied or adjusted. Fast fix: Put intercompany agreements in place, benchmark pricing, and maintain a simple TP file (who provided what service, at what cost/base, and why it’s arm’s‑length).

6) ESOP tax timing and IFRS 2 surprises

Why it hurts: Equity can trigger tax at grant, vest, exercise, or sale depending on the country. Poor tracking leads to payroll issues and audit adjustments. Fast fix: Map the tax point for each employee location, run formal option valuations, expense share‑based payments monthly, and ensure payroll disclosures match.

7) Import VAT and customs cash traps

Why it hurts: Paying import VAT upfront and failing to reclaim promptly ties up working capital. Fast fix: Use deferment/suspension mechanisms where available, capture import VAT in your VAT returns on time, and reconcile customs data to your GL and stock records.

Runway‑protection checklist

• One calendar for all tax filings and payments across entities and countries.

• A VAT treatment matrix that sales and finance actually use.

• Monthly reconciliations: e‑invoice/e‑receipt totals → GL → VAT returns.

• Contracts reviewed for withholding tax, with residency certificates on file.

• Intercompany agreements and a short TP memo updated annually.

• ESOP valuations and payroll workflows for equity benefits.

• Import VAT tracked and reclaimed on schedule.

Need a focused tax health check? E Advisory helps MENA startups close the gaps in days, not months.