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To verify the accuracy of a taxpayer’s VAT liability, a tax audit reviews various documents maintained by the taxpayer. This process assesses whether taxable entities are meeting their obligations in accordance with tax laws.
The Federal Tax Authority (FTA) conducts annual tax audits to ensure that all liabilities are correctly calculated, collected, and submitted to the government on time. Consequently, taxpayers will receive an audit notice ahead of time.
To ensure your company is prepared for the tax audit, a tax consultant can assist in organizing and preparing all necessary documents for the tax assessment.
Make sure all required documents are ready for presentation during the assessment. Keep in mind that poor record-keeping can lead to penalties.
System Review
Ensure your accounting software is up-to-date and compliant with the Federal Tax Authority’s requirements.
Tax Calculation Review
Verify that the calculations for your company’s output and input taxes align with UAE laws, which set the tax rate at 5%.
VAT Return Review
Your tax consultant should thoroughly check the VAT returns to ensure all values are accurately recorded and all necessary information is included.
Tax Payment Review
Confirm that all tax payments are made accurately and on time, before their due dates.
Failing to comply with tax laws can lead to penalties. The Ministry of Finance (MOF) has outlined several consequences for those who do not comply, including:
These violations can also result in imprisonment for the authorized signatory and may be classified as a criminal offense.
