VAT Audit

VAT Audit in UAE is the review performed by the Federal Tax Authority (FTA) in order to verify that whether the business is following all the VAT laws and implementing VAT as per the regulation of FTA.

All the businesses registered under VAT will not be audited. FTA will choose randomly and select the companies who are required to be audited. The decision to audit a company will be FTA’s choice.

The FTA will ask the businesses to submit the information which will be verified with the VAT returns submitted. Also, the authority might check the sales and purchase invoices and review the books of accounts along with the VAT returns submitted to FTA. & the relevant supporting documents like tax invoices, credit notes, export documents, contracts etc. to ensure the compliance with the UAE VAT Law.

The FTA may choose any business or taxable person for VAT Audit in UAE based on various factors observed through the procedures like a review of VAT returns submitted, Vat refund application processes, Voluntary disclosures submitted, clarifications provided etc. or even when the authority receives or identifies sufficient reason to believe that a Tax Audit is required on a taxable person.

Hence, the FTA may start the VAT Audit in UAE when it has reason to believe that a taxable person needs to be audited. FTA will notify the business at least 5 days in advance. FTA will conduct tax audit in official working hours.

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What are the Records to Be Maintained for VAT Audit?

  • Records of all supplies and Imports of Goods and Services.
  • All Tax invoices raised for the supplies of goods and services
  • All tax credit notes issued and received for the supply of goods and services.
  • All tax invoices received for which input is claimed.
  • Supporting documents for the export of goods
  • Records for import of goods into UAE, like the custom declaration.

Further, the Federal Tax Authority may ask any such records or document in addition to some specified in the above list.

At RVG, we can help you to review VAT compliances on yearly basis, and can submit you the weaknesses in compliance and recommendations to improve the same.