Pakistani companies doing business in the UAE, a VAT (Value-Added Tax) audit is a key check-up to make sure your business is following all the local VAT rules. This is a careful look at your company's daily operations to see how it is handling its VAT responsibilities. The main goal of a VAT audit is to check that your company has reported and paid the correct amount of VAT. The audit can be a simple check of your invoices or a much deeper review of your bank statements and sales records.
VAT audits are very important for Pakistani companies to stay compliant in the UAE and to be ready for any questions from the government. A full review by our VAT experts can find any risk areas in your business. At the end of the review, we give you a complete file with helpful suggestions.
A VAT audit in the UAE is a formal check done by the Federal Tax Authority (FTA). They will review your business records and any other data. During the audit, FTA auditors will look at your tax returns and other details to make sure your company is paying its taxes correctly. The goal is to ensure that the VAT returns and refunds you have submitted are accurate and follow UAE tax laws. If your company is chosen for a VAT audit, it is very important to be prepared. You should make sure that all your records and documents are well-organized and easy to find. The following are some of the key records you should have ready for a VAT audit in the UAE.
Compliance with VAT Regulations: The audit checks to see if your Pakistani-owned business is following all the UAE's VAT laws. This includes making sure you are charging the right VAT rate on sales and correctly claiming back VAT on your business expenses in the UAE.
Accuracy of VAT Returns: The auditor will review your company's UAE VAT returns to make sure all the information is correct. This means checking your calculations, looking at your documents, and making sure the numbers match your financial records.
Recordkeeping and Documentation: Keeping good records is a must for VAT compliance in the UAE. The audit will check if your business has kept all the needed documents, like invoices and receipts, to support your VAT transactions.
VAT Treatment of Transactions: The auditor will look at how VAT was applied to your different transactions, such as sales, purchases, imports, and exports, to be sure it was done correctly.
Exemptions and Special Schemes: Some businesses might be able to use VAT exemptions or special programs in the UAE. The audit will check if your business is using these correctly according to FTA rules.
Risk Assessment: Auditors will do a risk check to find areas where your business might have a higher risk of not being compliant. For
Pakistani companies, this could include deals with related companies or cross-border sales.
Communication with Tax Authorities: Sometimes, the auditor may need to talk to the Federal Tax Authority (FTA) to ask questions or get more information about your company's VAT status.
Your Pakistani-owned business must have a good accounting system that can create tax-related reports at any time. The FTA will review this system during an audit. Using a good, FTA-approved accounting software will help you make the right tax invoices, credit notes, and VAT returns.
Your company should have a good system of internal controls to make sure you are following all the UAE's VAT rules. A good system helps you file your VAT returns on time, regularly check your records, and stay compliant to avoid penalties.
Under UAE VAT law, all businesses must keep their financial and accounting records for at least five years. This is a very important rule for Pakistani companies working in the UAE.
Pakistani businesses must be sure to file their VAT returns before the due date for each period and pay any tax they owe to the FTA on time.
For our Pakistani clients, Flyingcolour® Tax Consultant and J N J Auditing LLC offer key business services in the UAE, like accounting and bookkeeping, full tax help, auditing, ESR and anti-money laundering compliance, help with getting a tax residency certificate, payroll, excise tax, and part-time CFO services. We give Pakistani businesses complete and custom service packages made for their needs in the UAE.
