How should I be ready for a UAE VAT audit? FTA VAT Audit Services in Dubai, UAE | VAT Audit in UAE | VAT Audit in Dubai
Since VAT was implemented on the provision of taxable goods and services, the UAE has completed its second year. First and foremost, it is advised that all of these businesses have their tax records audited by licenced tax professionals in Dubai, United Arab Emirates, who will accurately ascertain their tax compliance and pay their taxes in accordance with the guidelines established by the Federal Tax Authority. Approximately 90% of VAT registrants have paid their taxes for the current tax year. As a result, the UAE is in a great rush to complete its VAT audit before the end of the tax year. Tax returns, which may be filed monthly or quarterly depending on the FTA’s registration requirements, must be filed within a 12-month period known as the tax year. Therefore, even if you plan to use internal auditors or any tax expert in Dubai, you need to become familiar with tax terms as you discover how to prepare for VAT Audit in the UAE.
What does VAT / Tax auditing mean in Dubai, United Arab Emirates?
Essentially, it is a formal audit of the business’s sales and purchase ledgers, VAT ledgers, and other financial records by authorized tax agents. Reconciling the trial balance with standard rated sales. Physical inspection of Purchase Tax Invoices and Sales Tax Invoices for the Tax Period, i.e. Jan. 2018 to Mar. 2018. Zero-rated sales, Out of scope and Exempt Sales. This guarantees that all debts are paid off and that all taxes are collected and paid to the government within the allotted time limit.
Companies are required to file VAT returns, which must be correctly prepared, recorded, and filled out with the appropriate values. You can obtain assistance from tax agents in the UAE and get it completed within the allotted period.
Most importantly, the tax owed must be paid in full and discharged on or before the deadline. Suppose you have previously hired a qualified tax agent. In that case, he will guarantee that the organization complies with FTA regulations regarding VAT (that your dealings are made valid and legitimate and you carry out a safe and clean business.)
Corrective Actions
Companies are typically anxious to handle a tax audit, but if you have a tax consultant on your side, you can plan and be well-organized.
The following could be the results of a VAT audit in the UAE by authorized tax agents before receiving notice of an FTA audit.
1. The entity’s management will receive the Accounting Archiving Report and Accounting Data Adjustment Report, observations, and recommendations for improvement.
2. Voluntary disclosures will be created and submitted to FTA if alterations to the tax periods are necessary.
3. Adjustment will be made in the following tax period if the impact of the VAT is less than the voluntary disclosure requirement.
Advantages
1. The company will be VAT compliant in accordance with FTA requirements, minimizing the possibility of receiving a fine from the FTA. 2. The business will be ready for the FTA audit. 3. During the audit, management can ask authorized tax agents further questions about VAT filing and FTA regulations.
How FTA Audit Works? The government may conduct a tax or VAT audit if it wants to look at the company's records and papers. In the UAE, a complex VAT audit involves a complex process during which the authorities will examine the returns and other information.
Here are some quick steps for the FTA audit process.
The Authority’s Methods of Notification and Correspondence Any of the following methods may be used by the Authority to execute the notification: Postal service; registered post. c. Via electronic mail sent to the address the person being notified has specified. d. Posting on the Taxable Person’s property e. Any additional methods that the Person and the Authority may decide upon
Right to Conduct a Tax Audit
1. The Authority may investigate the following items as part of a Tax Audit: a. The Premises.
b. The documents on hand at the location.
c. The assets on hand at the premises.
d. The accounting practises of the party being audited by the IRS. 2. In order to visit the portion of the Premises where the Premises or portions thereof are utilized as a residence for the purposes of carrying out the provisions of Clause (4) of Article (17) of this Law, the Tax Auditor must first get the Director-prior General’s written authorization.
3. The occupational tenant of the Premises, or, in the absence of the occupational tenant, any Person the Authority considers to have control over the Premises, shall provide the Authority with all reasonable facilities necessary for the effective exercise of its powers under this Article, in accordance with Clause (1) of this Article.
Notice of Audit
1. The Authority must outline the potential repercussions of interfering with the Tax Auditor’s performance of his duties in any notification of a Tax Audit it sends.
2. If a Tax Auditor is hired to conduct a Tax Audit in accordance with Clause (4) of Article (17) of this Law, he is required to notify the following in writing at the start of the Tax Audit:
If he is there when the Tax Audit starts, the occupational tenant of the premises.
1. The Authority must outline the potential repercussions of interfering with the Tax Auditor’s performance of his duties in any notification of a Tax Audit it sends.
2. If a Tax Auditor is hired to conduct a Tax Audit in accordance with Clause (4) of Article (17) of this Law, he is required to notify the following in writing at the start of the Tax Audit:
If he is there when the Tax Audit starts, the occupational tenant of the premises.
4. The permit issued by the Authority as well as the permit obtained from the public prosecutor, in addition to the proof of identity, must be presented each time a tax auditor is asked to do so in order to conduct a tax audit at the premises of a person with permission from the public prosecutor according to Article (12) of this Decision.