VAT Health Check

Ensuring VAT compliance requirements

The provisions of the Federal Law on taxation have mandated 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. So, it is important to be accurate with the VAT returns and other statutory requirements to avoid non-compliance penalties.

FTA Audit is not only to find out Administrative and Financial deficiencies in the business but also to improve how a corporate entity’s compliance with the Laws and Regulations. With this in mind, it is an opportune time for taxpayers to prepare themselves for the eventual audit. One of the best ways to prepare for this is to undertake 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 FTA authorities will check the returns and other details/documents like 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 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. It is advisable to all the business entities in UAE to prepare themselves for Tax Audit in a timely manner as the FTA allows only 5 days for responding to their queries.

The tax professionals at MBG Corporate Services are experienced in providing Tax Health Checks that bring together our knowledge and experience in taxation and related internal controls. These Health Checks enable clients to undertake any necessary corrective action before an audit takes place. With the Health Checks, clients will also be better prepared to handle a tax audit as they would have collected the necessary documentation that was put together during the Health Check and can continue to ensure such documentation is readily available.

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