A tax audit in the UAE is a process where the Federal Tax Authority (FTA) checks the business records, information, and data of a person or company. This is to ensure that they are following the tax laws, especially the VAT and Excise Tax laws.
The FTA audits businesses to make sure they:
Pay all the taxes they owe.
Collect and pay the correct amount of tax to the government on time.
According to Article 17 of the Tax Procedures Law (Federal Decree-Law no. 7)
The FTA can carry out a tax audit at:
Its own office.
The business premises of the taxable person.
Any place where the business keeps its records or stores its goods.
It's important for businesses to be prepared for a tax audit by keeping accurate and up-to-date records. This helps ensure compliance and avoid penalties.
How to Prepare for a UAE Tax Audit
Tax consultants in Dubai can help businesses get organized for a tax audit by the FTA. Following their advice can give businesses the confidence to handle a UAE tax audit smoothly. Here are some top tips to prepare for a tax audit in the UAE:
1. Review Your System
Tax auditors will look at all your tax-related transactions, so make sure your records are accurate. Experienced tax consultants in Dubai can help you review your systems to ensure transactions are recorded correctly. Also, ensure your accounting software complies with VAT accounting requirements.
2. Check Your Tax Calculations
Focus on both output and input tax calculations to ensure they meet UAE VAT laws. The standard VAT rate in the UAE is 5%, but some goods or services have a zero or exempt rate. Make sure these are treated correctly and supported by documentation. Consulting with experts like GVC can help ensure compliance with UAE VAT laws.
3. Review Your VAT Returns
VAT-registered businesses must file VAT returns online through the FTA portal. This involves submitting sales, purchases, output VAT, and input VAT in the correct sections of the VAT return form. With the help of top VAT consultants in Dubai, businesses can ensure returns are filed correctly and on time. These consultants can help you enter the right values in the right boxes and meet the FTA's deadlines.
Records to Keep for a Tax Audit
According to Article 78 of the Federal Decree-Law, a registrant must keep certain records available for the Federal Tax Authority (FTA) upon request. These records include:
Records of all supplies and imports.
Tax invoices and documents related to receiving goods and services.
All tax credit notes and related documents were received.
All tax invoices and documents issued.
Records of goods and services disposed of for non-business purposes, including tax paid on these.
Records of goods and services purchased where Input Tax was not deducted.
Records of exported goods and services.
Records of any adjustments or corrections made to accounts or tax invoices.
Details of imported goods, including customs declarations and supplier invoices.
This list is not exhaustive. The FTA may request additional documents. To ensure compliance with tax laws, consult the best tax agents in Dubai for assistance.
How Catnyx Consultants Can Help You
Catnyx Consultants is a reliable firm offering tax audit services in the UAE, supporting both businesses and individuals. Their skilled team knows UAE tax laws well and ensures you follow them correctly while managing any risks during the tax audit in the UAE.
The professionals at Catnyx Consultants carefully review your financial statements, records, and tax returns. They look closely at your transactions to find any possible compliance issues or errors. Using advanced software and techniques, they spot irregularities and patterns, making sure the audit is thorough and covers all necessary areas.
Catnyx Consultants takes an objective and unbiased approach, providing you with fair and accurate assessments of your tax situation. They also offer advisory services, giving you valuable advice on tax-saving strategies, compliance steps, and risk reduction.
By choosing Catnyx Consultants for your tax audit needs in the UAE, you gain from their expertise, efficient audit processes, and proactive methods. This helps you stay compliant, reduce risks, and improve financial transparency.
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