Why Conduct An Audit?
During a tax audit in the UAE, taxable enterprises must go over a number of key points that the FTA will examine. During an audit, there is a multitude of things to keep track of, as mentioned below:
1. Companies that are required to pay taxes in the UAE must utilize the most up-to-date accounting software to ensure compliance with the UAE VAT Law. When filing VAT taxes in the UAE, having the right software is essential. Under Article 2 of the Tax Procedures Law, FREEZONER aids businesses in implementing the appropriate accounting software to generate records and reports.
2. The UAE tax auditors also check the zero-rated, exempted, and standard-rated taxes, according to UAE tax laws. They make certain that regular tax rates of 5% or 0% are applied to taxable supplies. In addition, zero-rated tax goods are applied with zero tax with proper official and commercial documentation.
3. The input tax is scrutinized during a tax audit to see if the expenses and purchases are tax-deductible. Tax auditors verify that input credits are applied for 5% or 0% supplies and are not levied for exempted goods or other restricted input taxes, such as entertainment services.
4. To ensure the completeness of the records and the VAT returns, the tax auditor will compare the submitted VAT returns to the accounting records. Before submitting VAT return files to the FTA, tax consultant agents inspect them to ensure compliance with UAE legislation. As a result, hiring a tax consulting agent must meet the FTA's stated standards during the tax audit.