Preparing for a VAT audit involves more than checking previously submitted VAT returns.

The underlying accounting information and documentation supporting those returns are equally important.

What Should Businesses Review?

A VAT compliance review may involve information such as:

  • Tax invoices
  • Accounting records
  • VAT reconciliations
  • Import and export documentation
  • Transaction classifications
  • Supporting contracts and documents
  • Previously filed VAT returns

Reconcile Your Records

One of the most important preparation steps is ensuring VAT figures can be reconciled with the company's accounting records.

Unexplained differences should be investigated rather than left until an audit or assessment occurs.

Documentation Is Essential

Businesses should maintain organised records that explain the VAT treatment applied to transactions.

Trying to reconstruct historical information after receiving a request can be considerably more difficult than maintaining appropriate records throughout the year.

Be Prepared Before an Audit

Eccuracy can assist businesses with VAT reviews, accounting reconciliations and identifying areas that may require attention before an FTA review.

This article is provided for general informational purposes and does not constitute tax, legal or professional advice. UAE tax legislation and administrative requirements may change. Businesses should assess the rules applicable to their specific circumstances.