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FTA also checks whether a UAE company pays taxes on time and adheres to VAT regulations. The FTA is expected to review the tax records of businesses in the UAE. Tax audits assist in ensuring that companies are not dragged into financial and legal issues as a result of the correction of tax returns. This is implemented by filing taxes and keeping records in good time.
The FTA conducts VAT audits/inspections at different times. In order to ensure that the authority detects any errors or non-conformities in the audit, the business will face severe punishment in the form of fines and penalties. The authority can access any documents or data, including invoices and supporting documentation, in case a tax audit is conducted.
1.Preparation for FTA Tax Audits: Organisation and preparation of accounting records and VAT return filing that can be examined during an FTA audit are services that NAK Auditing assists businesses with.
2.VAT Compliance: The business helps clients to keep the proper records and does a full analysis of transactions that are concerned with VAT, and also verifies the responsibility.
3.Company Tax Advisory: NAK Auditing will help in registering, filing, payment and record keeping of tax within the new requirements as federal firm tax was implemented in the UAE.
⇒Key Features of the Service:
Determining and evaluating underreporting and reporting transactions in taxable and VAT able documents of a business.
1.Review of VAT Return Filing: All the transactions, records are accessed, and the cash and VAT returns are adhered to and systematically filed.
2.Regulatory Guidance: Proof helps businesses in meeting new compliance requirements efficiently and appropriately, based on the latest local and international trends in compliance with taxation.
3.Tax Audits: Reactions and preparation of FTA audits and support in possible conflict or evaluation. FTA also evaluates another area in tax evaluations.
NAK Auditing L.L.C. offers tax audits to UAE companies by providing professional tax audit preparation, compliance checking, and representation in the Federal Tax Authority (FTA) audit.
1.Tax Audit Support Services:
1.Ready to go Audit: NAK Auditing organises and bundles together all books of account and VAT records, then a formal audit is conducted in a manner that the books are right and complete as per the requirements of the FTA.
2.Compensation Assessment: To ensure that the company attains compliance with the company in the UAE and FTA inspection resistant, the company carries out a thorough analysis of the accounting, VAT returns, and tax returns.
3.Discrepancies Findings: Findings of the experienced auditors of NAK Auditing will introduce and eliminate any errors, gaps, non-compliance issues, provide practical advice and support the correction of the mistakes to avoid imposition of fines and penalties.
4.Representation: NAK Auditing may visit a company on its behalf during the FTA audits, and it will help to present the situations related to taxes and protect against the consequences and misunderstandings.
5.Continuing Advisory: The company provides its clients with advice on the best practices in documentation and administration of taxes on a periodical basis, and/or they are informed of any changes in tax legislation.
→Response to Anticipatory Risk Aversion:
1.Proper Keeping of Records: In accordance with the FTA regulations, maintain good and well-documented records within a period of seven years, comprising tax returns, invoices, contracts, reconciliations and financial statements.
2.Regular Internal Audits: Conduct. Before a formal audit, it is important that regular internal audits and tax risk analysis be done to identify any discrepancies or noncompliance issues.
3.Timely Submission: To ensure that no fines or unnecessary audit examination are imposed on the company, ensure all corporation tax and VAT returns are properly submitted and within the required time.
1.Digital Transformation: To ensure a major decrease in the number of employees and the percentage of errors, tax authorities and corporations are utilising automated systems and improved accounting software to simplify the process of tax reporting, filing, and audit preparation.
2.Experienced Auditors needed: The auditors have to be professionally qualified under the new regulations. This makes sure that audits are not inaccurate, unreliable and beyond the scope of ethics and makes their results quicker and more believable.
3.Real-Time Financial Monitoring: This helps companies to reconcile their costs automatically and respond with ease to audit questions by applying computer-aided VAT categorisation and built-in dashboards.
4.Preparation in Advance: To eliminate the last-minute mistake and make the auditing process completes quicker, the company should make sure that auditing documents and accounts are ready and prepared and at a convenient time before the FTA deadline.
5.Better FTA Strategies: The Federal Tax Authority has become more efficient and transparent in its work, and digital payments have become easier and offered a reference to enhance compliance and minimise tax evasion.
The strategic planning of the tax audit in the United Arab Emirates is founded on the premises of early planning, computerisation, and professional experience in response to the changing regulatory demands and mitigation of the compliance risk.
→Basic Methods:
1.Early Preparation & Early Engagement: Billing Corporate tax returns, transfer pricing documents and audited accounts should be prepared by business organisations early before the due dates. Early contact with authorised auditors would make sure that the auditors are available and minimise the frequency of filing errors, which would result in fines.
2.Digital Transformation: It is now possible to streamline audit processes through the use of automation, artificial intelligence, and analytics, which can be used to enhance risk analysis, find inconsistencies, and report faster. Digital infrastructure also ensures superior and faster auditing and compatibility with international standards.
3.Transfer Pricing and Documentation:Under the new standards, huge benchmarking research and transfer pricing tests will be carried out, and documentation will be prepared and forwarded according to the FTA guidelines. This would be required to keep up with the compliance and to avoid paying large fines.
Tax audit value addition in the UAE is represented by better compliance, less risk, transparency of the financial situation and advisory information on how the business improvement can be achieved.
⇒Advantages and Added Value:
1.Increased compliance: Tax audit helps to make sure that companies do not break the Federal Tax Authority laws to avoid huge fines and court disputes.
2.Risk Minimisation: Audit reveals the areas of vulnerability in the accounting systems and financial statements with the view of making sure that the business minimises risks and eliminates the possibility of fraud or inaccurate data.
3.Financial Credibility: Audited accounts provide the trust of shareholders, investors, banks and governmental organisations, which enhances improved stakeholder relationships and easy financing or selling of business.
4.Strategic Insight: The auditing process offers management viable recommendations for tax planning, cost-effectiveness, and high-profit margins by considering the financial and tax reports in detail.
5.True and Fair View: The audit by the tax authorities helps to prove the quality of the published accounts and credibility, as well as helps to improve the image of the company and retain the reputation in the market over the long term.
6.Growth Preparation: Clean books that will attract both buyers and regulators will enable regular audit firms to be better prepared to grow, merge or sell.
Here are some common questions about Tax Audit
The FTA typically informs the business of the audit at least 5 business days prior to the audit. There could however be no prior notice in situations such as suspected tax evasion. The audit can be conducted at the premises of the business or at the office of FTA during the regular working hours. To have an easy audit, businesses are required to make records and staff available to the audit team.
Tax returns, invoices, bank reconciliations, financial statements, purchase and sales records, and other pertinent accounting and tax records are some of the documents that are regularly reviewed to confirm that taxes have been paid.
The corporate tax returns should be submitted not later than 9 months of the end of the financial year.
The VAT returns are normally submitted quarterly or monthly depending on the size of the business.
These filings are associated with audits that may span several tax periods as long as they fall within the lawful retention period of 7 years.
Companies whose annual revenues are greater than AED 50 million.
Eligibility to Free Zone Persons (QFZP) irrespective of revenue.
Special purpose financial statements (audited) should be prepared by tax groups according to the Ministerial Decision No. 84 of 2025.
In case of any mistakes or oversights being identified, the FTA could impose further evaluation, fines or administrative penalties. Voluntary disclosures can help businesses to avoid the punishment prior to final settlements.
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