A tax audit in UAE is a thorough review of financial information and accounts. Officers from the tax authority conduct tax audits to ensure compliance with all applicable tax laws. This includes reporting correct tax amounts.
These are some tips to help you ensure that your business is ready for audit. You can also get help from auditing companies in Dubai to help with preparation.
So, the FTA will notify you if there is a tax audit scheduled in the UAE. If this happens, the local tax authority may suggest that you:
Before the audit, establish a communication channel
It is best to ask an audit firm in Dubai what materials they will need before they arrive at your premises. This will reduce surprises and give you ample time to plan. It will allow you to make necessary changes to files or processes. FTA auditor is usually available to provide useful criteria and resources. These resources can be used to evaluate your options and potential solutions in accounting.
Keep your files organized and Up-To-Date
An audit firm in Dubai typically reviews the financial reports of companies. This includes voucher approvals, bank reconciliations, payroll documents etc. External reports like as contract progress billings, reimbursement requests and grant reporting will be checked. It is important to complete such documentation as soon as possible.
The local tax authority has the ability to monitor and manage company operations. They are also able to investigate variances easier. It is much easier to gather audit documents if you have well-organized and complete records.
Take a look at previous audit results
Are you able to resolve any prior audit recommendations? Are there any uncorrected errors from your tax audit? How will they impact your financial statements? Make sure to address any unresolved issues and make corrections immediately. This will give you a solid foundation for the tax audit.
Examine changes in company activity
Operational challenges can be improved by implementing new/discontinued policies, changing procedures and/or creating new projects. They can also create internal problems or raise new control concerns. It is important that IT be used to evaluate the activities. This is done to make sure that the business or organization is functioning properly and that no information has been lost during transitional changes. When you need to change a procedure, it is advisable that you reach out to independent audit companies in Dubai. They can help you establish the correct controls.
Document throughout the fiscal year
Federal Tax Authority tax auditors often ask for documents to show the process of review and preparation. Although you may be aware that a review was performed, an auditor will not be able to confirm it.
All supporting documents that are required for tax charges should be kept. Keep only records applicable to a specific period of time until the audit is concluded. Make sure all files are completed and retain any guidance provided by an outside source, such as an audit firm in Dubai. Make sure you have all supporting documents in case of unusual circumstances, such as overseas transactions.
Be aware of changing accounting standards
To be successful, they will often require resources and time. You might also consider looking at audit reports from other businesses to help you stay on top of emerging issues.
To prepare for an audit, review your list and assign each item to someone you believe is responsible. Include a due date, if feasible. It is important to plan a timeline and assign the task of compiling all necessary documents. This will help you be ready for the audit to begin.
Do a thorough self-review of your annual report
Check work papers and schedules for any errors. Next, take a step back and evaluate your financial statements. Review your financial statements for reasonableness. Read and amend the notes. Make sure to refer to your disclosure checklist to ensure you have included all information. Be prepared to explain line-item variations.
You may need to provide certain information in order to be able to answer questions from Federal Tax Authority officers. Ask them questions. This will prevent unnecessary delays when the audit begins. Talk to your decision-makers and people who you will be relying on for information. You must communicate fully with the tax authority. You want to know exactly what the FTA is looking for.
Get expert advice from Top Auditing Companies in Dubai today on how to prepare for a tax audit in Dubai.
Work with audit firms in Dubai to help you prepare for tax finance audit
If you are looking for a trustworthy partner to help you get ready for an FTA tax audit in Dubai, UAE get in touch with audit experts at Audit Firms in Dubai. We would be glad to assist you promptly and professionally.
Umapathy Anuruthan, is a Senior Auditor at the firm, holds a Business Management Degree and carries with him an experience of 6+ Years, having worked in two of the Big 4 audit firms. He has a ‘hands-on’ understanding of external audits and financial reporting and is well-known for his approach to ensuring the highest quality and accuracy in audits for clients of numerous industries.