The excise tax law came into effect on the 1st October 2017 under the Federal Decree-Law No. (7) Of 2017. It is an indirect tax that is levied on particular excise goods manufactured, produced, and stockpiled in the United Arab Emirates. The regulatory authorities will verify the compliance of each taxable entity’s excise records through tax audits or inspections. Due to this small and medium-size enterprises must take care of inventories under the excise tax law.
For effective management of inventories business owners always prefer an Excise stock audit in UAE. This is the best way to assure the accuracy of tax records with the physical stock a company holds. Let’s understand the regulatory guidelines for conducting an inventory audit in all the Emirates.
A stock audit is conducted to verify the physical inventory available in the warehouse with the recorded stock in the books of account to find similarities or discrepancies. It is performed to assure the quantities and conditions of items held in factory stocks. This helps to monitor and protect inventory, the biggest asset of a company. An excise tax stock audit can also reduce the risk related to theft, damage, expiry of inventories, and the end of the life cycle of the product.
The stock audit is essential for businesses who are dealing in excisable goods in any Emirate of the UAE. Because stocks are the main assets of an organization that directly affect the profits and loss statement. Any ambiguities or miscalculations in inventory records lead your business toward loss. Furthermore, failure to maintain inventory records in accordance with regulatory requirements may lead to heavy penalties by the FTA.
So, a company must maintain accurate records of stock or inventory. You may hire our tax consultants for any excise tax services in Dubai, Sharjah, Abu Dhabi, and other Emirates that safeguard your business account from potential risks and fines.
Under the Federal Decree-Law No. (7) Article no. 24, each taxable entity in UAE must keep their records of all manufactured, imported, exported, and stockpiled excisable goods as well as inventory rates of the stock levels along with the details of the damaged goods.
While performing an excise tax stock audit in UAE, the taxpayer should consider the following checklist to make the records are compliant:
The excise tax stock audit in UAE is also known as inventory verification and its main purpose is to monitor the compliance of stock records as per tax laws. It assures the accuracy, existence, and value of the stocks stored in the company’s warehouse or factories. This is the perfect solution for making strategies for inventory management such as an excess or shortage of stock according to their leading time. Therefore, inventory verification will help individuals and businesses to supervise their stocks and generate profits. Some other objectives of doing a stock audit are mentioned below:
The Federal Tax Authority requires stock audit reports during the inspection of financial records. Also, the excisable stock report should be created by authorized and certified tax auditors. That’s the reason an excise tax stock audit in UAE needs expertise, proper knowledge of tax laws, and resources. To track in and out movement of excisable goods, the business person must hire third-party external auditors for inventory verification as per FTA standards. The auditors can evaluate the accuracy of physical stocks with transition stocks. They also help you in making an excise stock report in accordance with the new excise goods stockpiling Requirement by FTA.
BestaxCA is associated with the country’s leading auditing firm in the United Arab Emirates. Our team is combined with highly qualified and certified professionals and auditors to offer you the best excise tax compliance and advisory services. The auditor’s insight into your books of stock and inform you about the lacking areas or inaccuracy with the regulatory requirements to escape the penalties. They evaluate and verify all inventories along with the reconciliation of existing stock records. Don’t waste any more time and reach out to our highly-trained consultants and auditors in Dubai today!
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