VAT returns must be accurate and fully compliant with UAE VAT laws and corresponding Executive Regulations. The Federal Tax Authority (FTA) holds the authority to conduct audits of any tax registrant to ensure adherence to VAT laws and regulations.
To ensure alignment with UAE VAT laws, registrants should conduct a Tax Health Check. This proactive measure helps identify areas where compliance and controls need strengthening, reducing the likelihood of errors in the future. It is suggested for companies to avail services of Tax agents or consultants in the UAE like ATC Group, who have seasoned consultants who would be in a position to offer advises best suited for your company.
A thorough Health Check pinpoints areas requiring particular attention, allowing for the formulation of corrective actions to prevent non-compliance and future instances thereof. By conducting a comprehensive health check, registrants can significantly improve their compliance with VAT laws and regulations. Key components of the health check encompass a review of sales and purchase invoices, import and export reporting, documentation practices, and accurate reporting of sales in the VAT return.
FTA initiates audits by issuing a notice to the registrant. However, the extent and focus of the audit are often not disclosed beforehand, making it essential for registrants to proactively prepare for potential audits by conducting a Tax Health Check. This ensures adherence to compliances and the implementation of effective controls to identify and address non-compliance, should it arise.