Tax Audit Services in Abu Dhabi

A Comprehensive Guide: Tax Audit Services in Abu Dhabi

Introduction

Commencing on January 1, 2018, the UAE is now subject to the Tax Law. To guarantee that every division is prepared for the new transition, all firms in the UAE should check.

According to the Federal Decree-Law No. 7 and the Tax Procedures Law, a tax audit is a procedure used by the Federal Tax Authority (FTA) to review the financial records or other information or data of taxable persons conducting business in the UAE.

To verify that all taxes are paid in total and are transferred to the government within the allotted timeline, the FTA conducts a tax audit on a taxable person.

The FTA may perform a tax audit at its office, the taxable person's business premises, or any other location where the person conducts business, in accordance with Article 17 of the Tax Procedures Law (places where the entity keeps records or stores goods).

The auditing scenarios are transforming. It’s becoming more stringent, and the regulatory bodies demand greater transparency. Auditing not only helps in ensuring that companies are presenting a true picture of financial statements to their users, but it also helps the company track its performance and support future planning.

The company's accounting software needs to be updated, and that is one of the main discussions. To ensure that the reported transactions match up, accounting systems should be examined.

Auditing services in UAE are working constructively towards meeting all the agendas required to build a base and meet the law of the land, the interests of the company, and other users and prospective users of the financial statements of the company.

How to Conduct a Tax Audit in Abu Dhabi

When the FTA conducts a tax audit of a business, tax advisors in Abu Dhabi can help the organization. Following the advice of qualified advisors will provide businesses with more confidence to handle the UAE tax audit.

The steps for preparing firms for UAE tax audits are listed below:

Analysis of the System

All tax-related transactions in the UAE are audited by tax auditors. Thus, companies must make sure that their records are accurate and without any discrepancies. Businesses in the UAE can evaluate their systems to make sure they are being accurately recorded with the aid of knowledgeable tax consultants in Abu Dhabi.

In order to retain data to the standards needed by the FTA, the UAE FTA evaluates whether each department has the most updated and cutting-edge accounting software.

Assessing Tax Calculations

To adhere to UAE VAT legislation, firms in the UAE must concentrate on the input and output tax calculations. Many products or services that are subject to zero or exempted VAT rates should be treated as such, and the usual tax rate in the UAE is merely 5%. Tax advisors will guarantee that the business computes input and output taxes with accuracy.

Reviewing VAT Returns

Businesses with a VAT registration must submit their VAT returns online via the FTA portal. The process of completing a VAT return entails entering data electronically into the appropriate fields on the VAT return form found on the FTA portal for values of sales, purchases, output VAT, input VAT, etc.

The best VAT consultants in Abu Dhabi can assist firms in ensuring that the returns are submitted appropriately. Businesses can get help from tax consultants in Dubai to record the values in the appropriate boxes and submit the necessary documents by the FTA's deadline. A tax expert will ensure that you file your taxes on time and pay them to the government.

What are the Documents Required to be Maintained for Tax Audit?

According to Federal Decree-Law Article (78), a registrant is required to keep the following records and make them available to FTA upon request:

Documentation of all imports and supplies
Tax invoices and other paperwork connected to accepting payments
All tax credit notes and documents obtained
Each and every tax invoice and document issued
Records of products and services disposed of for reasons unrelated to business and records demonstrating tax paid to the same
Records of goods and services bought but not subject to the input tax deduction
Export Goods and Service Records
Records of account changes or tax invoice revisions
Information on imported goods, including customs filings and supplier invoices

The list is not complete, but the FTA has the right to request any further documents. Engaging the top tax consultants in Dubai to draught the paperwork in accordance with the applicable tax laws will come in handy.

What are the Advantages of Tax Audits?

Since a tax audit involves the government reassessing a company's status as a taxable body, its impact on an organization is highly substantial.

The following benefits or significance for an organization come from a tax audit:

A tax audit safeguards the taxpayer's rights. The privilege to examine the tax auditors' official identification cards has been granted to the taxpayer. He can get a copy of the notification of the tax audit. He is welcome to participate in the auditing processes and get copies of any original paper documents or digital files.
It upholds professional discretion. If judicial authorities do not request the information, FTA employees are not allowed to share it.
A tax audit improves the company's credibility
It will ensure that the company enters the total income and the deduction claims appropriately and accurately.
It reduces the probability of fraudulent activities.
Tax audits aid in the accurate and comprehensive presentation of accounts to the tax authorities. It allows for the suggestion of system changes and highlights the shortcomings in the accounting system.
An audit gives shareholders reassurance that the financial data in the accounts and calculations are accurate and legitimate.

As per Federal Law No. 32 of 2021 on Commercial Companies (the New Companies Law), which has repealed and replaced Federal Law No. 2 of 2015 on Commercial Companies (the Repealed Companies Law), the following criteria must be met:

Every corporation must appoint one or more auditors for the annual review of financial statements, which must include a balance sheet and a profit and loss account.
The company must adhere to international accounting standards and practices while creating its periodic and annual reports in order to give investors an accurate and understandable picture of profits and losses.

According to the Commercial Companies Law, all mainland-based businesses must maintain their financial records for 5 years and obtain a certified copy of their financial records. The audited reports shall be submitted to the authorities within a period of 90 days of the company's year-end.

Whereas auditing may not be a mandatory requirement for a free zone company, again, it depends on the free zone in which the company is established.

Why you should choose us as the Tax Audit Service Provider in UAE:

Presents a true and fair picture of the organization
Detects and prevents fraud
Helps management in decision-making
Compliance with the law
Attracts investors
Expertise and experience
Saves time and resources
Verification of internal control
Reduction in cost
Increases goodwill

The team or individual who conducts the audit of a business is known as an auditor. In a company established on the mainland, the management can choose any auditor they please, but in the free zones, only an approved auditor can conduct an audit. In the UAE, jurisdiction is a matter of concern when considering the audit and assurance process; it is different for a different jurisdiction.

Conclusion

After setting up a business, it is essential to keep tabs on its activities. Auditing and assurance services can be of great use. By doing tax audit services in Abu Dhabi and providing reports, you not only help track the activities and meet the legal requirements but also help management in further decision-making, which boosts the business, leads to its growth, and attracts investors, which in turn increases its goodwill.

Hiring us as a tax audit service provider will not only save you time and resources but also give you an expert opinion and tailored solutions for your enterprise. The professionalism they work with has given them higher accuracy, transparency, confidentiality, and an orderly workflow.