VAT is an indirect tax on the supply of taxable goods & services in the UAE. Entities registered for VAT will be subject to a VAT audit voluntarily initiated by FTA to ensure that the entity has appropriately complied the law and all the tax liabilities are paid. The main purpose of VAT audit is to ensure there is no tax evasion and non-compliance. The FTA notifies the entity at least five days prior to their date of inspection so as to enable the entity to prepare for the audit. Tax Agency in Dubai can help you to systematically prepare all the documents, & records that would be required to face the FTA authorities.
The VAT audit UAE might range from examining invoices of the entity to a thorough examination of the company’s financial records. The auditors will also verify the VAT returns so far submitted by the entity, the related books of accounts, samples of stock, assets etc.
If there are any discrepancies discovered during the audit that the returns resulting in the underpayment of VAT or over claiming the input VAT, the authority can call for a re-audit of the entity to investigate further.
What circumstances will invite an audit for VAT in Dubai?
- VAT Registration after the deadline: If you do not register for VAT registration within the timeframe specified by the VAT Law, you may be subject to a tax audit in the future.
- Deregistration of VAT: To ensure that the deregistration is genuine and is not to evade any tax and that the deregistration process was carried out properly and within the timeframe specified. The authorities can commence a Tax Audit within the timeframe mentioned in the law.
- Incomplete or incorrect tax returns: Submitting incorrect or incomplete VAT return that would bring in suspicion to the FTA authorities.
- Failure in providing appropriate records and documents: If the taxable person fails to submit the documents as demanded by the authorities.
- Tax avoidance: Where the Tax authority, FTA has reasons to believe that a registrant has wilfully evaded tax by claiming excess input or by reducing the output VAT, it can demand the assess for an audit of its books of accounts.
What documents should be presented for a VAT audit UAE?
- All tax invoices issued in relation to the supply of goods/services.
- All tax credit notes are both issued and received.
- All tax invoices for which an input claim is made.
- Documents supporting the export of goods/services.
- Records of goods imported into the UAE, along with the customs declarations and related documents.
In addition to those listed above, the Federal Tax Authority may request any other records or documents as deemed necessary.
How Elevate First Accounting & Auditing help you with the VAT audits UAE?
Any prudent business, should always make sure they comply with laws of the land and attract no penalties. This however requires continuous awareness of the changing legalities and resources who can make sure such updates are implemented and maintained promptly.
As FTA approved TAX AGENTS, we have been assisting clients from a wide array of business in handling all their VAT requirements starting from:
- VAT registration & deregistration,
- VAT return filing,
- Filing voluntary disclosure forms,
- Filing reconsideration forms
- VAT consultancy
- VAT audit services
Elevate will be able to assist you in preparing your books ready for the FTA audit by giving necessary guidance and solutions through a similar audit thus equipping you to go through a hassle-free audit from the authority.
Apart from this our expert team will also be to assist you for any of the above-mentioned services.