Since the past three to four years, UAE has focused considerably on smooth collection of VAT from businesses. So much so that the Federal Tax Authority has now started auditing businesses to make sure that they have complied with the VAT regulations. In a case where enterprises fail to comply, FTA makes sure that they are penalized heavily. It should be noted that, there is no specific criteria for an entity to be selected for FTA audit; any taxpaying body can be selected for an audit, however, there are several aspects that have a high probability of welcoming an audit, some are listed below:
- Incorrect VAT filing
- Not paying taxes
- Size of the taxpayer, that is, large.
- There is a position of a VAT refund
- Type of business
- If any member of supply chain has been selected for an audit
The professionals at ACCBOOKS ensure that businesses or individuals that seek assistance from the firm are proactive when it comes to an FTA audit. ACCBOOKS does so by pooling expert advice and methods for its client and by making sure that its client is ready for an audit. But how does the firm ensure that its clients are actually proactive and ready for an audit by the FTA?
- Learn about an FTA audit
An FTA audit is an interactive form of inspection during which organizations may be asked to give their financial statements and several business documents to the authority that is assigned the task of inspection. It is a process to ensure that the taxpayer has paid the right amount of taxes and to point out any errors (if there may be). ACCBOOKS learns from the processes and results of its client’s previous audits and also from the audits of other companies.
- Knowing what is needed by the auditors
The company being audited must contact the auditors to find out which documents and materials will be needed by them during the inspection process. The team assigned to a particular client at ACCBOOKS is trained to perform this task well, so as to avoid any issues during the client’s audit process.
- Timely reporting and documenting
Companies are supposed to keep their financial statements aligned if they are to prepare for an FTA audit, timely reporting, documentation and organization of those business documents is extremely necessary for this to happen. By assigning the task of handling accounting and finance to ACCBOOKS, a company can be relieved of this burden and can be confident of proper alignment of business records, that too, without errors.
- Accounting standards and compliance
Another important point is about compliance, accounting and reporting must be in accordance with the standards set. This again is a task well-handled by the accountants at ACCBOOKS.
- Has the company been subject to any changes?
Operational, managerial, strategic or structural changes often distort the way a business performs and documents its activities. A company must also pay heed to any changes that have occurred in the tax year so that no mistakes are made during preparation of financial statements and while paying taxes. The clients of ACCBOOKS that allow the firm to handle their VAT processes are never worried about keeping track of such changes because the firm does it for them efficiently.
- Internal audits
Lastly, responsibilities should be assigned to personnel within the organization to make sure that correct reporting and documentation is taking place. Consequently, internal audit and internal controls are essential for an enterprise.
In one way or the other, all of the points listed above aid a company in making sure that it is proactive and ready for an FTA audit and makes it stronger than its competitors. This ultimately results in better performance and compliance.