The VAT has already been applied to the people in UAE on all the taxable goods and services since 1st January 2018. Companies that are registered under VAT should comply with all the rules and regulations of the federal tax authority (FTA). The registered companies must carry out detailed audits of their companies financial standing in order to determine the VAT compliance.
Understanding all the legal terminologies may not be easy for everyone. That is why tax agents in UAE along with auditors are helping the people in complying with tax for helping the companies keep up with VAT and its implementations. If you want to learn more about this topic keep reading and visit this link: https://farahatco.com/services/audit-firms-in-dubai.
VAT audit in UAE
The audit is actually the assessment of the financial status of the company by the government. This is a formal procedure that should be carried out by all the registered taxable entities in the UAE. The basic reason why FTA carried out the audit is to make sure that the registered company is paying tax properly and is complying with the rules and regulations of FTA in a good manner. Also, all the companies that are established in the UAE have certain responsibilities. The audit also checks whether the companies are keeping up with their responsibilities or not. If not, they will face heavy fines and penalties.
Benefits of auditing as per VAT Compliance
Auditing comes with a number of great benefits for the companies. All the companies in UAE are always advised to carry out the audit through the help of auditors in the UAE in order to stay in the legal boundaries. Here are some of the advantages of audit in UAE;
- The audit makes sure that the company is applying VAT to all the taxable goods and supplies
- Audit report helps the auditors in UAE in understanding whether the amount of VAT being applied to the goods and services is accurate or not
- The audit shows that the company is complying with all the rules and regulations of FTA in UAE
- The audit shows that the company is paying tax on time
Audit procedure in UAE
Auditors in UAE like Farahat and Co conduct the audits but it is not necessary to carry out the audit only by the external auditors. There are many companies which conduct the internal audit for generating internal audit reports in order to check the effectivity of the business records. Different companies have different audit schedules. Some go for years while some go for quarterly basis audit. The process of audit in UAE is started when the FTA decides to carry out the audit of a particular company. It is to be noted here that FTA doesn’t need a proper reason for the audit. 5 days before the audit, the company has issued a notice regarding the audit date. The notice will be comprised of all the necessary details including the venue, involved parties and the schedule of the audit. At the scheduled time and place, the involved parties meet to start the process of audit. Different business records are seen thoroughly if asked along with samples of goods and other assets of the company, they can be protected and stored with the help of the companies like Price Bailey.