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Excise Stock Audit

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Excise Stock Audit In UAE

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.

What Is Meant By Stock Audit? 

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.

Why Is Stock Audit So Important In Emirates?

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.

Laws Subject To Inventory Management In UAE

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.

Checklist Of Stock/ Inventory Audit

While performing an excise tax stock audit in UAE, the taxpayer should consider the following checklist to make the records are compliant:

  • Stock accounting and reconciliation as per excise tax laws
  • Fulfill the latest stock reporting requirements of FTA
  • Proper valuation and evaluation of stored inventories
  • Proper maintenance of stocks or inventories
  • Accurate inventory coding and insurance
  • Assess the software being used for recording inventories
  • Categorization of inventory into low, medium, and high-value stocks
  • Stock-related MIS contents and formats

Purpose Of Excise Inventory Verification

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:

  • Significantly helps in the FTA financial audit
  • To find discrepancies in the actual stock
  • Identify the quantity of lost or damaged stock
  • Quantify the non-moving or overstocked inventory

Why Do Entities Hire External Auditors For Excise Stock Audit?

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.

How Does BestaxCA Help You?

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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However, I was the head of the finance department yet still found it difficult to conduct a financial audit in accordance with UAE regulations. Although, due to the competence and experience of BextaxCA's qualified auditors, all my concerns have been resolved

ylie Johnson

Accounts Manager, Abu Dhabi, General Trading Company

I utilized BestaxCA's accounting and bookkeeping services for my retail business in Abu Dhabi. It was fascinating to observe how they handled the finances. They provided me with out-of-the-box accounting solutions, which were really useful

Abdul Kaleem

Finance Manager, Dubai, Manufacturing Company

As per FTA requirements, the Bestax Chartered Accountants in UAE assisted me with VAT registration and filing. I personally consult with their tax experts to ensure they have the expertise necessary to provide timely answers

Abdul Kaleem

Finance Manager, Dubai, Manufacturing Company

I was so happy with the BextaxCA's services that I decided to use them for my personal tax planning and return filing. They really know their stuff when it comes to taxes!

Dwayne Perkins

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