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Tax Audit has become a reality with the implementation of Value Added Tax on the supply of taxable commodities and services by the Federal Tax Authority of UAE. FTA can conduct the audit of taxable organizations at any time to determine their tax compliance. The tax audit conducted by the Federal Tax Authority is the review of an enterprise’s role as the taxable entity. Through this process, the government auditors ascertain the operations of a business that whether it is operating in-line with the UAE tax laws such as Value Added Tax, Excise duty and so on. The objective of the tax audit is to ensure the cognize payment of tax liability and the tax payment by the organizations within the stipulated time.
What is a Tax Audit?
Two-third of the earth’s surface is covered with water. The other third is covered with tax auditors, It might seem funny but the complexities of tax compliances have increased drastically with VAT introduction in Dubai. The tax audit is fundamentally a government’s evaluation of an organization about its responsibility as a taxable entity. Tax audit is conducted by the Federal Tax Authority in the UAE to set the seal that every tax liability is settled up and every due tax is collected within stipulated time by the government. The UAE government evaluates the organization whether it is complying with the regulatory tax laws in force.
How Does a Tax Audit Work?
There are two types for the tax audit in Dubai; the government auditors may set one’s sight on conducting the audit within the premises of the organization or the Federal Tax Authority may designate the organization to represent its documents under the nose of FTA. The organization needs to hire the top document attestation companies and be prepared in advance for the call of the Federal tax Authority for the completion of the auditing process without having any thorn in one’s flesh.
Are you prepared for the Audit?
Having trouble in accounting? Hire the best translation companies in the UAE to meet the auditing requirements of the tax authorities and to ensure the maintenance of the documents with the emerging technologies. Our tax auditors can assist you to be always well ordered so that the company documents are well settled all the time prior to the call for audit by the tax authorities. The audit ensures whether the company is:
- Adhering to relevant tax laws
- Obeying the prescribed taxing process
- Proper retention and maintenance of accounting books
- Filing tax returns in a compliant manner within the stipulated time frame
Following are some of the assessments for which an organization needs to be prepared for the approaching audit:
Assessment of the system:
With the implementation of the Value Added Tax by the UAE government, the companies are required to update their accounting system on a priority basis. With the implementation of the new tax policy, the companies are required to install the advance accounting software in their systems for the double-checking of the accounting entries. An assessment of the system ensures any inconsistency in the recorded transactions. Books checking at the secondary level are required jobs that must be performed by the authorized tax auditor for the convenience of the organization.
Assessment of the Tax Calculations
A fundamental assessment of the tax calculations is required by the businesses to ensure whether they are complying with the tax laws set by the Federal Tax Authority of UAE. The basic tax rate in UAE is 5%. If any transacted good or any service is considered under the zero-tax rate policy then the specific documents regarding that product should be represented by the company.
Assessment of the Tax Returns
The tax reviewer will review the accounting transactions and the VAT returns that are required to be filed by the organization. The auditors with Aviaan Accounting ensure that the tax returns are filed properly in the right boxes with the needful information such as the input credits, zero-rated supplies or the tax exempted transactions. The reviewer ensures that the tax returns are filed within the stipulated time frame by the organization.
Assessment of Due Tax Payment
Auditors with translation companies ensure that the appropriate amount of tax has been submitted by the organization before or within the given due date. Our tax reviewers keep eyes on whether the organization is drawing negative attention of the Tax Authorities by skipping the stipulated timeframe of the tax payment or not submitting the satisfactory documents.
The Federal Tax Authorities check the tax returns and the other details submitted by the organization. The tax authorities are required to represent the valid reasons to conduct the tax audit for any organization. A notice will be issued to the organization prior to conducting the audit at least before the five days of time. The notice should include the reasons, the date of conducting the audit, the parties involved, venue or the other required information. The organization has the right to ask for identity cards or the other credential to ensure the authority of the professionals.
The audit is conducted within the office hours of the Federal Tax Authority. The subjected organization along with its legal representatives and the tax agents is required to cooperate with the tax auditors to perform their task. Any suspicious data or record found by the authorities affects the tax returns and the operations of the organization. The authority may ask for re-audit for further analyses at the secondary level.
Why Aviaan Accounting?
Be the one to stand out from the crowd!
Tax auditors with Aviaan Accounting have the capability to outperform in the accounting world. Our team conducts accounting with the emerging technologies and they are experienced professionals having VAT certificates representing their expertise in the accounting world. Turn over a new leaf for your accounts to stabilize your tax records in UAE and hire the experts from Aviaan Accounting, being one of the best accounting and audit firms in the country. We provide our clients with the in-house team of tax experts and professionals having significant tax exposure to deal with VAT and Excise tax implementation in UAE. Get in touch for expert audit and consultation services.