Tax audits in the UAE will be usually conducted by the Federal Tax Authority (FTA) Representatives. Not all the businesses registered under VAT will be audited. FTA will pick random companies for VAT audits.
Factors of Tax Audit
The factors which FTA consider before choosing a business for a tax audit are
- Large scale businesses
- Business with a history of late tax payments
- Incidence of incorrect tax filings
- The intricacy of a business
During the VAT audit, businesses must cooperate and make it easy for the FTA auditors. The taxpayer or the legal representatives should offer assistance to the tax auditor for smooth processing. If in case your business obtains a notification of VAT audit, here are the things you have to prepare:
- Accessible Office Space or if it’s outside, a relevant person needs to be present at the VAT Audit time
- Original documents
- Financial records such as books of accounts
- Tax invoices
- VAT Agents and Staff of Accounts department
Tax Violation Penalties
If the Federal Tax Authority (FTA) finds out a Tax Violation, then the penalties will be:
- For not maintaining financial records, a penalty of AED 10,000 will be applied
- Failure of the business owner to facilitate the Tax Auditor will be AED 20,000.
- Incorrect Tax return submission will be fined about AED 3,000 if it’s the first time and AED 5,000 in case of repetition.
- Failure to submit a registration application within the time frame will be AED 20,000
- As a serious fact, Tax Violations in the UAE may lead to business shut down
As a reliable TAX agent, Standard Auditing will completely represent your business in front of the Federal Tax Authority (FTA) during the VAT Audit. Our professionals handle all your VAT aspects with care and let your business survive without unnecessary fines.
For VAT Audit Assistance, Contact us!