-VAT Health Check
Ensuring VAT compliance requirements
The provisions of the Federal Law on Taxation provide the Federal Tax Authority (FTA) with the legal right to perform a tax audit on any person to determine their compliance with the provisions of the relevant laws. Therefore, it is important to be accurate with VAT returns and other legal requirements to avoid penalties for non-compliance.
An audit of the FTA agreement not only to find out about administrative and financial shortcomings in the business but also to improve how the corporate entity complies with laws and regulations. With this in mind, it is opportune time for taxpayers to prepare themselves for the eventual audit. One of the best ways to prepare for this is by undertaking a Tax Health Check to examine key areas of Tax Compliance and the controls thereon.
A high-level health check may highlight key taxes or compliance areas where more attention is required. The Federal Tax Authority (FTA) will verify returns and other details / documents such as sales invoices, purchase invoices, Custom and VAT documents related to import/export of goods and services. There need not be a specific reason for the FTA to conduct an audit of a company.
They can do this for any reason or whenever they want. A notice will be issued to the company, at least five days before the scheduled date of the audit. It will contain details, such as the audit schedule, the location, the parties involved, the reason (if anything specified), etc. All business entities in the UAE are advised to prepare themselves for tax audit in a timely manner as the Federal Tax Authority only allows 5 days to respond to their inquiries.
The tax professionals at MAI TAX Services are experience in providing tax health checks that combine our knowledge with our experience in the area of taxation and related internal controls. These health checks enable clients to take any necessary corrective action before an audit. With health checks, clients will also be more prepared to deal with a tax audit because they would have collected the necessary documents that were gathered during the health check and could continue to ensure that these documents were readily available.