As per Federal Decree-Law no. 7 of the Tax Procedures Law, each taxable business must prepare its financial records for FTA tax audit. The relevant authorities ensure that the company is complying with UAE tax audit laws. The FTA official representatives verify accounting and bookkeeping records and financial statements. This is the reason, taxable persons outsource tax audit services in UAE to determine the accuracy of their tax liabilities. Also, FTA assures other tax provisions are conducted within the specified timeframe. Below we will discuss more details on UAE tax audit type, procedure and essential requirements for entities:
Value-added Tax Audit in UAE
VAT is an indirect tax that is applied by the regulatory authorities to specific products and services. According to the UAE VAT laws, the auditors need to assure the accuracy of VAT registration, VAT invoices, VAT returns, and refund submission. The taxable person provides a VAT compliance report under the regulation of the Federal Tax Authority (FTA). During the VAT audit in UAE, the business is required to make sure that it is collecting and reporting the VAT within the assigned time frame and complying with VAT Laws.
Excise tax is the other essential type of UAE tax that is levied mostly on harmful products to discourage their consumption or usage. To verify that the entity has submitted accurate excise tax liabilities in the reportable period, you may seek assistance from an expert audit firm in the UAE before an official FTA Audit is conducted.
How FTA Conducts Tax Audit in UAE?
The United Arab Emirates requires that all businesses registered must be VAT compliant before the FTA verify its financial records. Depending on the Tax Procedure Law, the FTA has the right to carry out a tax audit at any time for any company. The FTA doesn’t need any specific reason for doing an audit. Tax audit in UAE will take place in the offices of the concerned business or at the choice of the Federal Tax Authority (FTA). As per Article 19 of the Tax Procedure Law, the audit is conducted during official working hours and authorities inform the companies before at least 5 days of the actual audit. The audit notification includes details such as audit timing, place, involved parties and any particular reason etc.
The official FTA auditors evaluate your tax liabilities and other tax-related information during conducting a tax audit in UAE. The company’s tax agents and legal representatives may also assist to provide help to FTA tax auditors. The authorities have the right to re-audit the company if they find any fraud, irregularities and suspicious activity in financial records. The companies can seek advice from certified tax advisors and chartered accountants in Dubai to ensure compliance.
Record-keeping for UAE tax audits
The FTA auditors may ask for certain records and documents (original/ copies) from the authorized personnel of the company. This may include the following details:
- Records of all supplies & imports
- Tax invoices and other documents on receiving goods and services
- All tax credit documents received.
- All tax invoices and documents issued.
- Goods and services purchased without deducting input tax.
- Data of exported Goods & Services.
- Accurate records of adjustments or corrections made to accounts or tax invoices.
- Invoices of goods imported, along with the Customs declarations
Preparation for Tax Audit in Dubai, UAE
When the FTA decides to audit your company, a tax consultant can help you to be always organized beforehand. They will prepare all your documents and accounts to be compliant with UAE VAT laws. The tax consultants can assist you in the following ways:
1- Assessment of the System
When companies prepare for a Tax Audit in UAE, the tax advisors must review your accounting system to ensure accuracy. They deeply analyze that each department has the latest and advanced accounting software to maintain data in FTA’s required formats. Our team makes sure that each financial record and transaction comply with state laws. Reviewing the system will ensure that the recorded transactions are consistent and correct.
2- Evaluate Tax Calculations
The evaluation of tax calculation is necessary when businesses prepare accounts for VAT Audit in UAE. In order to comply with UAE VAT laws, the tax consultants assure that the business is calculating both output and input taxes accurately. Additionally, they assist you in preparing documents for standard and zero-rated goods and services supplies.
3- Review of Tax Due Payment
It is necessary to pay the correct amount of taxes due. The tax consultant will make sure that you are paying taxes to the government without missing the deadline.
How BestaxCA Assist you in Tax Audit Services in Dubai?
BestaxCA is one of the prominent accounting and audit firms in UAE. With over 15 years of experience, our chartered accountants come up with financial advisory services in almost all major industries. We help you in providing the top VAT Audit Services in Dubai, United Arab Emirates. Our tax auditors fully assist you in pre-audit and post-audit to ensure compliance with VAT audit laws. They make sure all the tax-related information and books of the record are in line with the FTA’s law and regulation.