As per the UAE’s Tax Procedures Law (Federal Decree-Law No. 7), a tax audit is an official process conducted by the Federal Tax Authority (FTA) to inspect the business records and financial information of taxable entities. The primary objective of an FTA tax audit is to ensure compliance with UAE VAT Law and related tax regulations. The audit verifies that all tax liabilities have been properly reported and paid within the stipulated time frame.
AARMAK is a leading tax auditing firm in Dubai, providing pre-audit and post-audit support to ensure complete VAT compliance. It is essential to work with registered tax agents to avoid non-compliance. At AARMAK, our experienced team of FTA-registered tax agents offers expert guidance to safeguard your business and prepare you for any FTA audit.
The FTA's tax auditors will assess tax returns and other records during the audit to confirm compliance. As per Article 17 of the Tax Procedures Law, the FTA may conduct an audit for any reason at any time. Typically, businesses receive at least five days' notice before the audit, but the FTA may conduct audits without notice in cases of suspected tax evasion.
To ensure smooth audits, businesses must provide full cooperation. In cases where irregularities are found, the FTA may re-audit the company. AARMAK assists businesses with expert advice and representation to ensure complete compliance with FTA regulations.
In line with Article 78 of the Federal Decree-Law on Value Added Tax, businesses must maintain the following records for tax audits:
According to Federal Law No. 7 of 2017, tax auditors have the right to:
Enter Business Premises: Auditors can enter and inspect business locations where records are stored. In cases of suspected tax evasion, they can temporarily close premises for up to 72 hours.
Seize Assets: Auditors have the authority to access original records, take stock samples, and seize assets if necessary.
Audit New Information: Auditors can investigate any new evidence that emerges during the audit and may impact the outcome.
Accounting Software & Systems: Proper systems must be in place to comply with VAT laws. AARMAK helps businesses deploy and manage compliant accounting software to reduce risks.
Output Tax Review: Auditors check that standard and zero-rated tax calculations are correct and supported by valid documentation.
Input Tax Review: Auditors assess the validity of input tax credits, ensuring that claims are made in line with VAT laws and supported by appropriate invoices.
VAT Returns Review: Auditors will cross-check VAT returns with accounting records to verify their accuracy. AARMAK’s VAT experts ensure that returns comply with FTA requirements.
After the audit, the FTA notifies businesses of the results within 10 business days. Businesses have the right to review the documents used by the FTA to assess their due tax. AARMAK ensures your business is fully prepared to navigate this process smoothly.
Partnering with registered tax agents like AARMAK is crucial to ensure VAT compliance and minimize risk during a tax audit. Our FTA-registered tax agents offer a full range of tax audit services, from documentation support to transaction advisory. We provide pre-audit assessments, highlight risks, and advise on post-audit actions, ensuring your business is always compliant with UAE tax laws.
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