Your UAE VAT Returns form a legally binding statement of your UAE tax liabilities as a self-declared assessment, this means the preparation and accuracy are the responsibility of the taxable person.
As the UAE VAT system settles in the UAE, FTA Tax Audits are likely to increase. In this blog, we discuss the key questions that better answer the key questions surrounding a UAE FTA Tax audit.
What Is A UAE Tax Audit?
Under the Organization for Economic Co-operation and Development (OECD) guidelines, an audit is defined as:
“Examination of whether the taxpayer has correctly assessed and reported their tax liability and fulfilled other obligations.”
Under a self-assessment system, audits are considered essential to promote voluntary compliance and:
• Identify non-compliance to the Legislation
• Gather intelligence on the state of the tax system.
• Gather supply chain information (an audit on any business could trigger an audit on another business)
• Educate businesses and assist in the implementation of the law and identify areas that require may require clarification.
The UAE Tax Authority will require access to accounting records, documentation, and personnel to conduct their audit.