- July 7, 2020
- Posted by: Dhivya Krishna
- Category: audit, FTA
The main significance behind the VAT registration in Abu Dhabi is the prototype to raise the financial system of the nation like all other countries. Examining the tax records, documentations and the return files of a person to check their proper tax history is termed as ‘audit’. The FTA- Federal Tax Authority processes the audit checklists. However, the business person’s documentation will be checked and verified which is filed against the VAT or FTA returns. A tax audit is, indeed, the assessment of the business person’s title role as a taxable system by the government.
Firstly, the main goal of the audit is to make sure that the tax liability is correctly filed, and the tax is correctly collected. Meanwhile, VAT registration in Abu Dhabi makes sure about the detailing and declaration of details based on the eligibility. It will be difficult for businessmen to accumulate transactions for VAT return filing. It makes you skip the risky deadlines that will obviously end in non-compliance. For business people, tax accounting software will be a major role for their immense success.
How to get ready for the audit?
- The company must adhere to all the taxes
- The process must be adapted
- Records must be maintained perfectly
- VAT returns must be filed inappropriate manner
What all you must know about the FTA Tax Audit in UAE?
- Firstly, as a part of the internal process and guidelines, the audit is carried on in the UAE.
- The audit is conducted either in the office campus or at the FTA (the FTA requests the business person to bring down all the documents to the office or send it electronically
- An Audit may, indeed, include processing and scrutinizing the tax records of the company. Meanwhile, in UAE, if the data is stored even remotely, the law requires to process all the financial systems of the businessmen.
- The FTA will send a notice 5 days or a week prior to the audit.
- During the audit, the auditor will check a few documents and make sure everything is right
- The audit takes place only during the FTA work hours. Indeed, there may be some exceptional cases that auditors of the FTA may audit over hours with the Director General’s permission
- The company or business place will need to make sure that all the assistants and other officials whose presence is needed for the audit
- At the end of the audit, final reports will be given by the FTA which will include any mistakes found. Penalties may be charged accordingly. However, if needed, re-audit can be conducted with any suspects in the audit.
The detailed process in the FTA:
Firstly, the FTA audit is preceded by collecting all the information and documents from a particular business person. In short, this file will be called as the audit file. Indeed, the audit file should be in the FAF file format as requested by the FTA officials. The FAF format should be produced at the invoice level. At the end of the audit, the auditors determine if a business is following properly the tax laws and processes like the VAT. Moreover, VAT registration in Abu Dhabi is always perfect and famous.
The following are the information needed to be submitted:
Information about the company:
- Registration Number- TRN
- Name of the tax agency
- Tax Agency Number- TAN
- Name of the tax agent
- Tax Agent Approval Number- TAAN
Details about the customer and supplier:
- Customer and supplier’s location. i.e., UAE
- TRN number may be needed if required
- Tax codes like the ZR for zero-rated supplies should be submitted. Subsequently, this will help to identify the nature of the supply.
The FTA audit checklist should be submitted in the FAF format and include the details such as invoice number, date, value, VAT amount should be mentioned.
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1. What is a Tax Audit?
It is conducted by the FTA. Tax audit means examining the financial records and documentation for a company or business place.
2. How to file VAT returns in the UAE?
Any taxable person in the UAE can file its VAT return through the online portal in the FTA website
3. What Can You Do to Be Prepared for the Audit?
Stay organized so that anytime an audit will be conducted. All this can be done by tax consultants in order to skip stress and worries
4. What does the tax consultant review about the VAT Returns?
A tax consultant will review the VAT returns that are filed by the companies. It makes sure that all the required information is filed properly without any flaws.
5. What is meant by VAT return filing?
At the end of the duration, every taxable person must submit the VAT return files to the FTA.
To demonstrate the VAT liability, a VAT return encapsulates the value of the supplies and purchases a taxable person has made during the period of tax payment.
6. What is meant by the liability of VAT?
The difference between the output tax paid during a given tax period and the input tax during the same tax period is called the liability of the VAT. Here the output tax will be more than the input tax. However, the liability of the VTA is paid to the FTA.
7. When does a business require filing VAT returns?
Taxable businesses should file VAT returns in the FTA on a regular basis, within 28 days of the end of the tax duration or tax period.
8. What is the tax period?
A tax period means the duration of time for which the taxes are paid