Starting January 1, 2018, the UAE government has applied VAT on the delivery of taxable goods and services. The Federal Tax Authority (FTA) can audit companies that are required to pay taxes to determine their tax compliance. It’s time to brush up on your tax vocabulary in order to keep up with the UAE’s new tax system. It’s also advisable to hire a professional company that provides tax audit services in Dubai
What Is A Tax Audit?
A tax audit is essentially an examination of a company’s taxable entity duty by the government. This type of audit is performed by the FTA to ensure that all liabilities are met and all taxes are collected and remitted to the government within the time frame specified. The government also analyses a company’s compliance with specific responsibilities imposed by tax rules that relate to their firm (VAT Law, Excise Tax Law, etc.).
All tax-registered companies in the UAE are legally required to keep account books that can be audited by Dubai Government recognized audit firms, according to UAE company law. These audited reports are presented to the company’s board of directors. Most free zone authorities in the UAE now demand audit reports to be submitted on a regular basis. Because the UAE has now implemented VAT legislation, all tax-registered businesses must keep supporting papers for their account books in a ready-to-inspect state for inspection by UAE Federal Tax Authority inspectors.
What Are The Documents Needed To Be Submitted In The Event Of A Tax Audit In The UAE?
- Payroll reports
- All tax invoices and other associated paperwork for goods or services received
- All bank accounts are listed on this page.
- Documents of all imported materials and goods/services.
- Records of all tax credit notes and alternative papers received.
- Copies of legal documents
- All tax invoices and other papers that have been issued
- Numbers of tax registrations
- Copies of loan documents, leasing agreements, and material contracts, for example.
- Trial balance
- Minutes of board meetings
- General ledger
- Returns on VAT
- All alternative documents including tax credit notes issued
- Keep records of goods and services for which no input tax has been deducted.
- Record goods and services that have been dispensed with or consumed for non-business purposes, and the taxes paid on them.
- Record adjustments or modifications to account or tax invoices.
- Details of commodities imported into the state, including customs declarations and invoices from suppliers
What Are The Penalties For Failing To Comply With A Tax Audit In The UAE?
Tax Authorities are particularly demanding when it comes to providing a revenue stream to the Federal Reserves, and as a result, non-compliant or non-conforming tax registration carries severe penalties.
- Failure of a person conducting business to retain the required documents and other information as specified in the Tax Procedures Law and the Tax Law: AED 10,000 for the first offense; AED 20,000 for subsequent offenses
- If the Registrant submits an inaccurate tax return for the first time, the penalty is AED 1,000; if it happens again, the penalty is AED 2,000.
- Failure of the person conducting business to assist the tax auditor: AED 20,000 in violation of Article 21 of the Tax Procedure Law.
- Failure of a taxable person to file a registration application within the deadline set forth in the tax law: AED 10,000.
The majority of these offenses can result in harsh punishments, including incarceration.
How Can We Help?
We, at ebs, work with a wide range of organizations, assisting them with audit concerns and managing their tax transactions while ensuring complete compliance with VAT legislation. As a result, we are in a position to provide effective answers to our valued clients’ compliance issues. During audit assignments, we adopt a client-friendly audit technique that focuses on areas that are considered high risk. We offer competitive packages for tax audit services in Dubai. You can also request a customized package.
Contact us +971 50 172 1071 to discuss your requirements.