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Audit

Tax Audit Service in UAE

15

Years of
Excellence

ExpertTax Auditing Services in UAE

At Secure Track, we offer comprehensive tax auditing services in the UAE to ensure businesses remain compliant and optimized. Our team of seasoned professionals meticulously assesses financial records, identifying potential risks and opportunities for improvement. We prioritize transparency and accuracy, providing detailed reports and actionable insights to our clients.

With a deep understanding of UAE tax regulations and a commitment to excellence, we strive to minimize liabilities and maximize efficiencies for our clients. Trust Secure Track for reliable, confidential, and tailored tax auditing solutions that empower businesses to thrive in the dynamic landscape of the UAE market.

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RulesUnderstanding Rules and Regulations of an Audit

The Federal Tax Authority (FTA) of the United Arab Emirates governs tax audits. Here’s a breakdown of the key points to know:

Authority:

The FTA has the right to conduct tax audits on any business or individual in the UAE at any time, without needing a specific reason.

Notification:

The FTA will notify you at least five working days before the scheduled audit date. This notification will include details like the audit location, timeframe, and assigned auditors.

Location:

The audit can take place at the FTA office, your business premises, or any location where you keep relevant records.

Working Hours:

Normally, tax audits occur during official FTA working hours. Only under exceptional circumstances authorized by the Director-General may they happen outside these hours.

Documentation:

You are required to provide the auditors with all requested documents related to your tax filings and financial records. These can be originals or certified copies. You have the right to request identification from the auditors to verify their authority.

Compliance:

The auditors will assess your tax returns and supporting documentation for accuracy and adherence to UAE tax laws and regulations.

Rights and Responsibilities:

Both the FTA and the taxpayer have specific rights and responsibilities outlined in the Tax Procedures Law. It's recommended to consult a tax professional if you're unsure about your rights during the audit process.

If you need a professional tax audit service in Dubai reach us now.

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Tax AuditUnderstanding Tax Audit Triggers in the UAE

The authority in the UAE, the Federal Tax Authority (FTA), can initiate a Tax Audit at any time without needing a specific reason.

There are no restrictions on when they can choose to audit a business or individual. However, they will typically notify you at least five working days beforehand.

Here are some situations that might trigger an audit, though the FTA isn’t obligated to disclose their reasoning:

  • Discrepancies in your tax returns: If the FTA identifies inconsistencies in your VAT returns or tax filings, they may choose to investigate further through an audit.
  • High-risk industries: Businesses operating in sectors with a higher risk of tax evasion might be selected for audits more frequently.
  • Suspicious activity: Any information suggesting potential non-compliance with tax regulations could prompt the FTA to initiate an audit.
  • Random selection: The FTA may also choose businesses for audits randomly as part of their regular compliance checks.
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Understanding Tax Audit Triggers in the UAE

Audit ChecklistDocument Checklist for UAE Tax Audit Compliance

The Federal Tax Authority (FTA) won’t provide an exhaustive list of documents beforehand, but they will request specific records relevant to your tax filings during the audit. Here’s a general idea of what you might need to submit:

Financial Statements:
  • Audited financial statements (if applicable)
  • Balance sheets
  • Income statements
  • Cash flow statements
Tax Records:
  • VAT return forms and supporting documents
  • Excise tax return forms (if applicable)
  • Corporate tax return forms (if applicable)
  • Any supporting documents for claimed tax deductions or exemptions
Business Records:
  • Sales and purchase invoices (both local and international)
  • Credit and debit notes
  • Customs declarations (for import and export)
  • Inventory records
  • Fixed asset registers
  • Payroll records
  • Bank statements
  • Contracts and agreements related to taxable transactions
Additional Documents:
  • Tax registration certificate
  • Internal control procedures related to tax matters
  • Any communication you've had with the FTA regarding taxes

If you need a professional tax audit service in Dubai reach us now.

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PenaltiesUnderstanding Tax Audit Penalties in the UAE

There are two main categories of penalties you might face during a Tax Audit in the UAE:

1. Administrative Penalties:

These are imposed by the FTA for non-compliance with tax procedures, regardless of whether the audit uncovers any tax due. Some examples include:

  • Late filing of tax returns: Penalties start at AED 500 per month and can escalate to AED 1,000 per month after a year.
  • Failure to keep proper records: First-time offenses can result in a fine of AED 10,000, increasing to AED 50,000 for repeat offenses within 24 months.
  • Inaccurate tax return (without intent to deceive): A penalty of AED 500 may apply, but this can be avoided by correcting the return before the official submission deadline.
  • Failure to submit requested documents in Arabic: A fine can be imposed for not providing documents in the required language.
2. Tax Liabilities and Penalties:

If the audit reveals underpayment of taxes due to errors, omissions, or deliberate attempts to evade tax, you will be liable to pay the outstanding tax amount along with additional penalties. These penalties can be significant:

  • Interest on unpaid tax: A monthly interest of 14% per year is charged on the outstanding tax amount from the due date onwards.
  • Understatement penalties: These can range from 20% to 100% of the additional tax owed, depending on the severity of the offense.
Important Note:
  • The specific penalties will depend on the nature and severity of the non-compliance identified during the audit.
  • The FTA has the authority to waive or reduce penalties depending on the circumstances.
Recommendations:
  • Maintain accurate and complete tax records.
  • File tax returns on time and ensure their accuracy.
  • Seek professional guidance from a tax advisor if you're unsure about any aspect of tax compliance.
  • Cooperate fully with the FTA during an audit process.

By following these recommendations, you can minimize the risk of penalties associated with a Tax Audit in the UAE.

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Maximize Compliance and Minimize Risk

Ensure your financial compliance and peace of mind. Contact us today for expert tax audit services in the UAE. Let us safeguard your interests and optimize your tax situation

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+971 52 589 1206

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FAQWe Answer your
Frequently Questions

A tax audit is a review of your tax filings by the government to verify accuracy. It’s not mandatory for everyone, but can be triggered by discrepancies in your return. While it might sound scary, audits can actually uncover errors in your favor and help you avoid future penalties.

Tax audits can happen anytime, but red flags like missing info, high deductions, or belonging to a high-risk industry raise your chances. The tax authority might also choose you randomly or if your return just doesn’t seem quite right.

The exact documents for a tax audit in the UAE will vary, but expect to show financial statements, tax returns, invoices, receipts, and business records. Basically, anything backing up your tax filings and business activity could be requested. Keep it organized for a smoother process!

There’s no set timeframe for a UAE tax audit. It depends on the complexity of your business and any issues found. Straightforward audits can wrap up in a few weeks, while complex cases might take several months.

In the UAE, the Federal Tax Authority (FTA) will typically notify you at least five working days before a scheduled tax audit. This notification will include details like the date, location, and assigned auditors. So, you’ll have some time to prepare your documents.

Don’t panic! While a tax audit notice might be concerning, stay calm. You have five workdays to prepare. Gather documents, contact a tax advisor, and review your tax filings. Cooperate with the FTA and provide requested info.

To minimize issues in a UAE tax audit, stay organized beforehand. Keep financial statements, tax returns, invoices, and business records readily available. Review your filings for errors and consult a tax advisor for guidance. When the notice arrives, act promptly – gather documents and seek professional help if needed. Cooperation with the FTA goes a long way.

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