The Federal Tax Authority (FTA) conducts VAT audits service in Dubai periodically to ensure compliance with all the VAT Regulations by the companies in the UAE. This is part of the enforcement procedures of FTA as laid down by the Tax Procedures Law published by the Ministry to identify non-compliances and possible tax evasion among VAT registrants.
The Federal Tax Authority, UAE, has recently increased the tax audits so that a company can expect a call for a VAT audit at any time per the concerned authority's requirement. Therefore, it is pertinent that all VAT-registered businesses should be ready with their VAT records and accounts to avoid any possible penalties.
VAT Law in Dubai UAE
Before proceeding, it's essential to gather information about VAT law in Dubai. Refer to the list below:
- VAT applies to all businesses in UAE with taxable turnover exceeding AED 375,000/-, who are expected to register for VAT and obtain Tax Registration Number (TRN)
- The base VAT rate is 5%, and certain supplies of goods/services are eligible for 0% VAT
- Certain supplies of goods/services are exempt from VAT
- VAT registrants must submit periodical VAT returns (monthly/quarterly) within 28 days from the end of the tax period, and
- Keeping proper books of accounts and records is mandatory as per Tax Procedures Law.