Tax Audit in UAE – Know the Procedure & Prepare yourself

A tax audit is conducted by the Federal Tax Authority (FTA) to examine the tax liability of a business covering the VAT Laws and Excise Tax laws. Under law no.7 of the federal Decree-Law, a registered organization is responsible to comply with the tax laws laid by the authority. Here, all the processes fall in line with the provisions of the tax regulations, and the liabilities are paid in time. To implement provisions of Article (17) of the Law, the occupational tenant of the Premises or in the absence of the occupational tenant, any Person the Authority considers as having control over the Premises, shall provide the Authority with all reasonable facilities necessary for the effective exercise of its powers under this Article (ie. documents and assets that are available at the Premises).

A glance of the thorough course of action of Tax Audit by the FTA

A tax audit can be performed when the FTA wishes to examine the company’s records and documents. The tax audit involves a thorough course of action in which the authorities will check the returns and other details. Here, the authority shall execute the notification by any of the means no less than 5 days before the date in which the tax audit is scheduled under Article 17 of the Tax Procedure Law. Tax audit takes place during the FTA working hours per Article 19 of tax Procedures Law. After all, the Director-General of the FTA has the full right to carry on the UAE tax audit of business outside the working hours if it is an odd case. While performing audits by FTA full aid should be given the audit company, their legal representative, and the tax agents. There are chances for the re-audit if the auditors find anything odd during the audit.

How to Formulate for the UAE Tax Audit?

The Tax Auditor may do the tax audit at any time. Eventually, this exercise will minimize if we use tax consultants in Dubai who thoroughly guide you during the tax audit from the FTA. The taxable persons in the UAE should be in line with the tax requirement so that the business will be ready to face tax audit at any time by the authority and tackle the Tax audit:

Evaluation of the System

It is vital to establish an excellent accounting system. Or update the present bookkeeping to precisely record the transactions. The evaluation of the bookkeeping system is to be made where there is no disparity or irregularity in the purchases taped. A tax consultant in Dubai, UAE can aid you in preparing the audit by compiling and updating the required and analyzing the deals made within a tax obligation period.

Evaluation of Tax Calculations

The proper calculations of both output and input tax are needed to make sure that they are in accordance with the UAE VAT laws. All taxable supplies at standard-rated are charged at a 5 % tax rate at UAE. And to ensure that only eligible zero-rated supplies are charged as zero-rated and proper supporting documents are maintained. To check the aforesaid you can consult GVC to see that you are in line with the UAE VAT law.

Evaluation of VAT Returns

With the implementation of VAT in UAE, it is required that every taxable business should submit VAT to through the FTA portal. Before filing the Vat returns, you need to assure that all your tax requirements are met ie. value of sales, purchase, output VAT and input VAT, etc. And based on the aforesaid you will have to fill the pertinent boxes in the return form in the FTA portal. The You can get the assistance of VAT consultants in Dubai to achieve the result of VAT returns with professional guidance which helps you catalyze the timing of cash flows seamlessly. Above all, assuring that your VAT return is filed as per the scheduled time frame, thereby saving your business from violations and penalties.

What are the relevant records to be kept for the Tax Audit?

Article 78 of the Federal Decree-law of the UAE Government states that a Taxable Person should maintain the following records for the Tax Audit:

  1. Recordings of all supplies and imports of goods and supplies
  2. Total tax invoices and alternative documents related to receiving goods or services
  3. Whole Tax Credit notes and alternative documents received
  4. Total tax invoices and alternative documents issued
  5. Sum of Tax credit notes and alternative documents issued records of goods & services that have been disposed of or used for matters not related to business, showing taxes paid for the same
  6. Recordings of goods & services purchased for which the input tax was not deducted
  7. Recordings of Exported goods & services records of adjustments or corrections made to Accounts or Tax invoices
  8. Recordings of any taxable supplies made or received including any declarations provided or received
  9. Tax record that includes details of goods imported along with Customs declaration and supplier invoices.

This checklist only contains several of the records that require to be gotten ready for an Audit. The FTA may likewise request more records to be sent for the audit. Experts based on Dubai can help you preparing for an audit by compiling the required records and analyzing the deals made within a tax obligation period.

Beyond Numbers can help you in Tax Audit in UAE , Call us today for a free consultation on +971 50 452 0632

VAT Filing Service DubaiVAT Consultancy in DubaiAccounting Service DubaiAuditing Service DubaiAccount Reconciliation Service DubaiBookkeeping Services in DubaiPayroll Services DubaiChartered Accountants in Dubai

Leave a Comment