Tax Audit in UAE

Know the procedure and how to be prepared for Tax Audit in UAE

Tax Audit in UAE: The UAE government has already implemented VAT on the supply of taxable goods and services starting from January 01, 2018. The companies that are required to pay taxes can be audited by the Federal Tax Authority (FTA) to determine their tax compliance. It’s time to get familiar with the terminology to keep up with the era of the tax system in the UAE.

What is Tax Audit?

Tax Audit is one of the compliance checks to verify a person’s VAT liability is correct by way of examining various records which are maintained by the taxpayer. A tax audit may be carried out at the taxable person’s business premises known as ‘field tax audit’ or in the offices of the FTA. Generally, prior notification of an audit will be given to the taxpayer.

Tax Audit in UAE

Detailed procedure

The FTA authorities will check the returns and other details. There need not be a specific reason for the FTA to conduct an audit of a company. They can conduct it for any reason or whenever they want. A notice will be issued to the company, at least five days before the scheduled audit date. It will contain details, such as the audit schedule, place, involved parties, reason (if anything particular), etc. The auditor/s and the company will meet at the scheduled place at the scheduled time and the process will begin. The auditor may ask for business records, in original and/or copies, and take samples of goods and other assets as available at the place at the time.

Note: The audited party has the right to ask for the credentials, such as professional identification cards, from the tax auditors in order to determine their authority.

The tax audit is required to be conducted during the official FTA working hours, unless the Director-General decides to conduct the audit of business outside regular hours, in an exceptional case. The Company subject to a tax audit, along with their legal representatives and tax agents, are required to provide full assistance to the auditors performing their task. If anything suspicious is found in the result of the audit that might impact the tax return, the authority may order a re-audit for further analysis. The audited person has the right to ask for the notification copy and related documents and be present during the auditing procedures that are conducted outside of the official places.

Related Links:

VAT Services(Opens in a new browser tab)

Tax Invoices: FTA Decision No. (4) of 2018 on Tax Invoices(Opens in a new browser tab)

VAT UAE – Value Added Tax(Opens in a new browser tab)

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