What is VAT Audit?
A VAT audit is a process of investigating the financial data and records of taxpayers in UAE. With VAT audit, The Federal Tax Authority (FTA) determines the accuracy of the taxpayer’s VAT liability. It monitors whether the taxpayer complies with the relevant UAE VAT laws or not.
Why is VAT audit essential?
VAT health check in UAE is essential to understand your non-compliance with the UAE VAT laws. You will be better aware of your internal tax procedures regarding the UAE VAT law. You identify the areas of non-compliance and rectify within the framework of UAE laws. Therefore, you must be well prepared before FTA conducts a VAT audit to assess your compliance.
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 and other supporting evidence. The employees responsible for accounting and taxation records must also be present to facilitate the audit process. These records include:
- Supply invoices and 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 a check on all the discrepancies in payments, receipts, and documentation of all VAT-specific transactions. Any kind of suspicious information or missing data is listed and checked again for irregularities.
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Our VAT audit services
We are a leading provider of VAT audit services since its implementation. We have a strong team of tax experts with a wide range of experience. Therefore, we are well-equipped to provide the best VAT audit services to you.
We coordinate with Tax Authorities throughout the audit. We provide the tax auditors with all documents, records, data, and information about finances, stock inventory, and assets for the detailed examination. We prepare a VAT audit checklist to ensure a proper review under the UAE VAT law. We have successfully represented the client from various industry verticals before FTA.
- 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 provides us with a well-defined structure to conduct a tax audit. It ensures that no errors or inaccuracies are found within the UAE VAT laws.
- Our tax auditors give astute assistance with documentation to accomplish a hassle-free VAT compliance
- Our seasoned tax advisors offer full guidance regarding the UAE vat laws to eliminate non-compliance and take appropriate actions to do so.
Where does the VAT audit take place in UAE?
FTA conducts VAT audit at the taxpayer’s office during the usual business hours. If it is not possible there, then FTA may conduct it at its office.
Is there any fixed time of the year 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 own discretion. Other factors such as a taxpayer’s delayed VAT return submission, incorrect returns, tax evasion case, non-compliance may also affect it.
FTA may conduct VAT audits multiple times in a year or just once. It is entirely up to them. Generally, FTA informs the taxpayer to be audited at least five days before audit. However, in cases of tax evasion or any other suspicion regarding taxpayer’s non-compliance, it may conduct VAT audit without any notification.
What are the major accounting records that FTA reviews during the VAT audit in UAE?
FTA reviews the following things during VAT audit:
- FTA checks whether taxpayers are using a proper accounting system to ensure accurate bookkeeping, maintain records, and generate basic reports with the UAE VAT laws or not
- FTA reviews whether you have applied the correct VAT rate to the products and services sold to customers or not
- FTA examines whether the right rate of VAT is imposed on products and services purchased from suppliers along with the existence of proper invoice and evidence for each or not
- FTA investigates whether taxpayers have filed timely and 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 10 business days of the audit completion.
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