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Tax Audit Service In UAE

    Tax Audit Service In UAE

    Tax Audit UAE – Tax Audit
    Services in Dubai, UAE

    An independent review of various tax records, financial statements and accounting books of a tax registered company is referred to as Tax Audit.

    According to the UAE company’s’ law, all tax registered companies are legally bound to maintain their account books which can be audited by Dubai Govt approved audit firms. These audited reports are submitted to the board of directors of the company. Most free zone authorities in UAE now require mandatory submission of the audit reports. As UAE has now introduced VAT laws, all tax registered companies are legally bound to maintain supporting documents of all account books in a ready inspection state for the UAE Federal Tax Authority inspectors to check. 

    Rules and regulations
    for the audit

    In the absence of financial reporting standards, UAE encourages and recommend companies to follow and adopt International Financial Reporting Standards for recording all their financial transactions. Dubai audit firms are directed to get their financial statements audited as per applicable IFRS during the audit process of Dubai auditors.

    Tax Audit Service In UAE

    Tax Audit Service In UAE
    Tax Audit Service In UAE

    Tax Audit Service In UAE

    When can the authority in
    the UAE initiate a Tax Audit?

    Authorities in the UAE, under federal decree law -36 can trigger an audit of a firm, if they suspect that tax revenue or any compliance issues are being compromised and financial integrity is at stake. If there is any instance that a newly found piece of information can alter the results of a previously conducted audit, the law gives complete authority to tax authorities to initiate a re-audit of a tax registered entity.

    In case, this were to happen, the public prosecutor gives permission to the tax auditor to visit any premises. They can undertake inspection of all the financial and accounts related documents, all the assets on the premises as well as the premises itself for the purpose of re-audit.

    Notification on
    Tax Audit in the UAE

    The Federal Tax Authority of Dubai usually intimates the registered tax entity through a notification to conduct the desired tax audit 5 business days prior to the expected start date. Certain exceptions are however made if auditor has reason to believe that prior notice would hamper conducting the audit, or they suspect evasion of tax. In which case no notice of tax audit will be served.

    The notification generally elaborates on the reason as to why the audit assessment is being conducted, which tax is the audit related to, tax summary etc. The Federal decree empowers the auditor to enter any premises and close the business while it performs the audit for 72 hours without prior notice if,
    Tax Audit Service In UAE

    Tax Audit Service In UAE

    Tax Audit Service In UAE

    FTA has enough evidence and reason to believe that an instance of tax evasion is under scrutiny

    Tax Audit Service In UAE

    FTA has reason to believe that by not closing the premises the audit activity will be hampered

    Documents to be submitted
    during a Tax Audit in the UAE

    Tax Audit Service In UAE

    The auditor can ask for any of the following documents while he performs it as he finds appropriate

    corporate tax in uae

    Reports on the payroll

    Tax Audit Service In UAE

    All tax invoices and related alternative documents related to goods or services received

    Tax Audit Service In UAE

    List of all bank accounts

    Tax Audit Service In UAE

    Records of all supplies and goods/services imported

    Tax Audit Service In UAE

    All tax credit notes, and alternative documents received

    Tax Audit Service In UAE

    Copies of legal docs e.g. MoMs, MoUs, Articles of incorporation etc.

    Tax Audit Service In UAE

    All tax invoices and alternative documents issued

    Tax Audit Service In UAE

    Tax registration numbers

    Accounting services in dubai

    Board minutes of meeting

    Accounting services in dubai

    General ledger

    bookkeeping services

    Trial balance

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    Copies of loans, leases, and material contracts etc.

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    VAT returns

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    All tax credit notes, and alternative documents issued

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    Records of goods and services that have been dispensed with or are consumed for matter NOT related to business and showing taxes paid against them

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    Records of goods and services purchased, and for which input tax is not deducted

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    Record of exported goods and services

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    Record of adjustments or corrections made to account or tax invoices

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    Details of goods imported to the state with customs’ declaration and supplier invoices

    Penalties associated with
    Tax Audit in the UAE

    Tax Authorities in the UAE are very particular when it comes to ensuring revenue stream to the Federal reserves and as such impose strict penalties on non-compliant or non-conforming tax registration. Most of these penalties can lead to heavy penalties and even imprisonment.

    Details of types of penalties, their fines and some solutions can be studied in the following link.
    Tax Audit Service In UAE

    Tax Audit Service In UAE

    Tax Audit Service In UAE

    Tax Audit Service In UAE

    Our role in
    Tax Audit in the UAE

    Tax audit is often considered a less thought after area with little understanding amongst the clients in the UAE region. It is thus imperative to not only sensitize business communities about its critical importance, but it is also advised that all these companies undergo a pre-audit evaluation of their entities in order for them to have a clear idea of where they stand.

    This helps them understand their company’s exposure to any noncompliance beforehand and allows them to understand the causes of such noncompliance and take proactive remedial measures and save later inconvenience.

    We at ebs, deal with a multitude of varied businesses and assist them with their audit issues and manage their tax transactions ensuring total conformity with the VAT laws. As a result, we are able to offer practical solutions that help our valued clients with their compliance problems. We use client friendly audit methodology during the audit assignments by focusing on those areas which are categorized as high risk.

    FAQ’s

    A tax audit is an examination of your tax return to ensure that your deduction and income are accurate. You need auditing to ensure that the financial statements are presented fairly and comply with the generally accepted accounting principles. It promotes objectivity and consistency in financial reports and helps other outside parties to make sure that the reports are accurate and fair.

    There can be many reasons to initiate a tax audit. For instance, if a company is unable to report all income on tax returns then a tax audit is required. If there are business losses or deductions that are questionable or unable to report the foreign accounts, then a tax audit is required.

    There are a few documents that you need to have prepared for a tax audit. These include analyses conducted, audit plans, checklists, representation letters, confirmation letters, summaries of significant findings, etc.

    Many people are concerned about the time period of conducting a tax audit. Commonly, the audit period should take no longer than five or six months. Sometimes with proper preparation auditing process can be done faster.

    Internal Revenue Service (IRS) does the auditing by mail and also notify the taxpayer within seven months of filing. Mail audits are completed usually in three to six months, and it also depends on the situation of auditing.

    If you receive a tax audit notice then do not panic. The notice you receive will have specific information about why your tax return is going to be examined. There will be a mention of what documents are required from you and how you will proceed.

    First of all, be concerned with the companies or professionals who have to carry out your tax audit mandatorily. Prepare all the required documents for your audit and get good consultation about your auditing.

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    Tax Audit Service In UAE

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