Tax Audit in UAE
A tax audit
in UAE will be conducted by the official representatives of the Federal Tax
Authority (FTA). The objective of the tax audit is to determine the VAT
compliance and to ensure that the tax liability is correctly determined and
must prepare themselves for the tax audit by the FTA. Tax audit will verify the
liability of VAT through examining the accounting and bookkeeping records and
VAT return filings which are maintained by the taxpayer.
will be conducted at the offices of the concerned business or at the place of
choice of Federal Tax Authority (FTA). FTA will notify the business at least 5
business days in advance. FTA will conduct tax audit in official working hours.”
businesses registered under VAT will not be audited. FTA will choose randomly
and select the companies that are required to be audited. The decision to audit
a company will be FTA’s choice.
Factors of Tax Audit
business for a tax audit lies completely with the FTA’s decision. Certain
factors can be considered before selecting a business for a tax audit, such as:
Large scale businesses
History of late tax submissions
The occurrence of incorrect tax filings
The complexity of a business
VAT Audit in UAE
a VAT audit, the government will verify that whether the business is following
all the VAT laws and implementing VAT as per the regulation of FTA. Through the
VAT audit in UAE, FTA will check the VAT returns and VAT refunds submitted by
the taxpayer. The purpose of the VAT audit is to make sure that the business is
collecting and submitting the VAT to the FTA within the assigned time frame.
will include reviewing and accessing all the financial records of the company
along with the bank statements. FTA will ask for the documents in hard copy and
soft copy. FTA will check the sales and purchase invoices and review the books
of accounts along with the VAT returns submitted to FTA.
VAT Audit Services
who are subject to VAT audit must cooperate and facilitate FTA auditors in
every possible way. A taxpayer or the legal representatives of the taxpayer
must provide complete assistance to the tax auditor to conduct the audit in a
smooth way. If your business receives a notification of VAT audit, you should
prepare the following:
Office is accessible.
Financial records such as books of accounts
The staff of Accounts department and VAT agents
If the audit is conducted outside the business office
then the presence of the relevant person from the business is mandatory at the
time of the VAT audit.
If FTA finds
out a non-compliance in the tax operations or discovers any violation of the
FTA law then heavy VAT fines and penalties will be imposed on a business. The
severity of violation or non-compliance might lead to the cancellation of the
trade licenses or closing of a company.
v Based on tax
evasion, the following penalties will be levied on businesses by the FTA:
v Penalty of AED
10,000 will implement for not maintaining financial records.
v Submission of
Incorrect Tax return by the Registrant will be AED 3,000 for the first time and
then AED 5,000 in case of repetition.
v Failure of the
person conducting business to facilitate the work of the Tax Auditor will be
v Failure of the
taxable person to submit a VAT registration application within the time frame
specified in the tax law will be AED 20,000.
v Tax Violations in
UAE will also lead to shutting down of the business entirely and the
cancellation of the Trade license.
How GoTrack Auditing
Auditing will entirely represent your business in front of the Federal Tax
Authority (FTA). Our tax experts will ensure that everything is in line with
the FTA’s law and regulation. Let GoTrack handle all your VAT aspects and save
your business from unnecessary fines and penalties.
Auditing is providing a VAT health check to ensure VAT compliance. We highly
recommend that all VAT registered businesses must conduct a VAT health check at
least twice a year to ensure that the business is compliant with updated tax
laws and regulations. GoTrack is providing the best VAT services that are in
line with the standards and rules of the FTA. For all kinds of services related
to VAT, Contact GoTrack!