In addition to periodic returns to be filed by taxable person, there are other compliance too which needs to be taken care of by taxable person. It includes maintaining proper records, FTA audit and inform FTA about changes in business which needs amendment in information related to its tax record kept with FTA.
A taxable business must maintain many accounting records required by the VAT Laws. Proper VAT related records by taxable person can help company saving itself from unnecessary tax payments. It also helps them stay up to date about all the information required to file a VAT return before the due date. Every taxable entity that is VAT registered must maintain its books of records for not less than 5 years after the end of tax period. FTA can demand to verify these records maintained by company anytime. In case of improper records, the FTA can penalize the organization.
Broadly, taxable persons need to keep below records for VAT compliance
1. Tax invoices issued by Taxable person for products sold/services provided with prescribed particulars.
2. Tax invoices or documents showing input supplies and services taken by taxable person for business.
3. Credit notes/Debit notes
4. Documents of imported goods and exported goods
5. Other books of accounts
1. Failure to keep the required records and other information specified in the Tax Procedure Law and the tax law. – AED 10000 for first failure and AED 20000 in case of repetition.
2. Failure to submit data, records, and documents related to tax in Arabic to FTA upon request – AED 20000
A VAT audit is a process of investigating the financial data & records of taxpayers by FTA to determine the accuracy of the taxpayer’s VAT liability and their compliance with VAT laws and procedures
VAT audit is triggered by variety of factors not limited to the size or the type of business. It includes system flags raised due to reasons such as delayed filing of returns, variation across returns filed by you, comparison of your business with your peers etc.
FTA reserves the power to audit anytime within 5 years. So it is necessary for taxable person to remain compliant and maintain all necessary documents for the period of 5 years.
FTA sends a notification to taxpayers at least five days in advance before commencing audit. Taxpayers must keep all VAT returns documents and records ready for providing to FTA officers in case of On-site audit. FTA can also choose to request information, documents and records to be submitted to them for remote audit.
1. Assisting in maintaining the required documents and keeping records required by FTA to avoid unnecessary penalties.
2. Assisting ensuring compliance with VAT laws relating to registration, return filing, record maintenance by constantly reviewing transactions, data, and records.
3. Assist you in FTA audit by helping in producing documents, records, data, and information demanded by FTA and seamless completion of FTA audit by proper co-ordination with FTA officers.