What is VAT Audit?
A VAT audit is a process of investigating the financial data & records of taxpayers in the UAE. With a VAT audit, the Federal Tax Authority (FTA) determines the accuracy of the taxpayer’s VAT liability. After that, it also monitors whether the taxpayer complies with the relevant UAE VAT laws or not.
Why is VAT audit essential?
A Vat refund Dubai is essential to understand compliance with the UAE VAT laws. You will understand your internal tax procedures related to UAE’s VAT law. The first step is to identify the areas of non-compliance and rectify them within the framework of UAE laws. Therefore, you must be adequately prepared to assess your compliance before the FTA conducts a VAT audit.
FTA tax audit process
Before the VAT audit, FTA sends a notification to taxpayers at least five days in advance. Taxpayers must keep all VAT returns documents as well as other supporting evidence. Moreover, the employees responsible for accounting and taxation records must also be present to facilitate the audit process. These records include:
- Supply invoices as well as receipts
- Tax invoices from suppliers and related documents
- Tax credit notes
- Documents showing the proof of imports and exports
- Customs declarations
- Non-deducted input tax records
Tax auditors need all these documents for assessment. They keep an eye on all the discrepancies in payments, receipts, as well as documentation of all VAT-specific transactions. Therefore, any suspicious information or missing data is listed and rechecked for irregularities.
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Our VAT Audit Services
We have been a leading provider of VAT audit services since its implementation. With a dedicated team of tax experts & diverse experience of over 35 years, we have the right resources & expertise to provide outstanding VAT audit services in the Emirates.
Along with coordinating with Tax Authorities throughout the audit, we provide the tax auditors with the relevant documents, records, data, and information about finances, stock inventory, & assets for a detailed examination. NR Doshi’s VAT experts prepare a VAT audit checklist to ensure a proper review following the UAE VAT law. Lastly, we have successfully represented the client from various industry verticals, thereby complying with FTA’s rules.
- We are FTA-registered tax agents with a good track record of providing pre-audit and post-audit assistance.
- Our detailed and accurate VAT audit checklist gives us a well-defined structure for conducting a tax audit. It ensures no errors or inaccuracies are found within the UAE VAT laws.
- Our tax auditors give astute assistance with documentation to accomplish hassle-free VAT compliance.
- Our seasoned tax advisors offer complete guidance regarding the UAE vat laws to eliminate non-compliance and take appropriate actions.
Where does the VAT audit take place in UAE?
FTA conducts VAT audits at the taxpayer’s office during business hours. If the FTA cannot conduct audits at the taxpayer’s business place, then FTA may conduct them at its office.
Is there any fixed time when FTA conducts a VAT audit?
There is no fixed month or date of the year when FTA conducts VAT audits. FTA decides to audit a taxpayer’s VAT liability at its discretion. Other factors such as a taxpayer’s delayed VAT return submission, incorrect returns, tax evasion cases, and non-compliance issues may have a significant impact.
FTA may conduct VAT audits multiple times in a year or just once, and it is entirely up to them. Generally, the FTA informs the taxpayer at least five days before conducting an audit. However, in cases of tax evasion or any other suspicion regarding taxpayer’s non-compliance, it may conduct VAT audit without prior notification.
What are the primary accounting records that FTA reviews during the VAT audit in UAE?
FTA reviews the following things during VAT audit:
- Checks whether taxpayers are using a proper accounting system to ensure accurate bookkeeping, maintain records, as well as generate basic reports with the UAE VAT laws or not.
- Reviews whether you have applied the correct VAT rate to the products as well as services sold to customers or not.
- Examine whether the correct VAT rate is imposed on products and services purchased from suppliers, along with proper invoices and evidence for each.
- Investigates whether taxpayers have filed timely as well as accurate VAT returns or not.
How and when do we come to know about the VAT audit results?
FTA notifies businesses of the VAT audit results within ten business days of the audit completion.
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