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VAT Health check in UAE

VAT health check in UAE ensures VAT compliance with FTA legislation.

Maintain Your Business Efficiency.

VAT health check in UAE ensures VAT compliance with FTA legislation. VAT in the UAE is a complex subject affecting every business aspect. To operate efficiently in the UAE, businesses must maintain VAT compliance to avoid fines and penalties from the Federal Tax Authority.

What is VAT Health Check?

VAT is a fairly simple tax system. As a self-assessed tax, however, it is not uncommon for mistakes or inaccuracies to be performed. Unfortunately, many businesses do not discover these mistakes until the tax authorities audit them. This can result in legal actions, fines, and penalties against the company, which can be damaging. The bigger the amount of VAT-related transactions, the higher the probability of such undesirable outcomes.

Benefits of VAT Health Check

The advantages of conducting a VAT health check with ADEPTS are:
  • Evaluation of present status and enhancement strategies
  • Prevention of judicial proceedings, fines, or penalties against the entity
  • Identifying strategies to reduce tax liability while being compliant with VAT Law
  • Obtain prompt and merited VAT reimbursements from the tax authorities by recommending recovery enhancements.
  • Identifying areas for policy and system enhancements
  • Verify that VAT schemes are being utilized and implemented effectively.
  • Ease while we assist you through your VAT issues
  • Being ready for Tax Audits by FTA

Process of VAT Health Check

At ADEPTS, we offer a comprehensive VAT health check service that can help you assess, identify and address any potential issues before they become too problematic for your organization. Our inspection process starts with a visit from one of our specialists to your office, where they will undertake in-depth analysis and review of your accounting practices and system.
This evaluation allows us to determine the current state of the data and transactions as well as detect any inaccuracies or inconsistencies. The review will thoroughly examine the source data, audited financial statements, the accounting system, sample invoice verifications, and other checks to establish whether everything is accurate or not.

Why is UAE VAT Health Check Necessary?

In the United Arab Emirates, VAT returns must be submitted precisely following all applicable laws and Executive Regulations. The Federal Tax Authority (FTA) has the authority to audit any tax registrant to guarantee compliance with VAT regulations and laws.

To verify that tax records, procedures, and reporting are in accordance with UAE VAT regulations, a registrant must complete a Tax Health Check to identify areas in which compliance and controls must be tightened to prevent future errors.
A comprehensive Health Check will reveal the areas that demand the greatest care. Appropriate actions shall be mapped out to end the non-compliance and prevent its recurrence. A registrant can increase compliance with VAT laws and regulations by undertaking a comprehensive health check. The health check must involve a review of sales and purchase invoices, import and export reporting and documentation, and sales reporting in the right boxes on the return.
FTA may initiate an audit after notifying the registrant by notice. Based on the company's industry classification and local business practices, the registrant cannot determine the scope of FTA's review and the amount of scrutiny. The only proactive strategy is to do a Tax Health Check before the audit and ensure that compliances are followed and that appropriate procedures are in place to flag any non-compliance should it occur.

VAT Transaction Analysis in UAE

The applicable VAT rate relies on the transaction/trade conducted by the registrant or prospective registrant. A comparison of transaction situations to existing tax rules would ensure correct tax application and eliminate the possibility of error and non-compliance
Adepts tax experts are well-versed in the UAE VAT legislation and have experience in a variety of industry verticals, enabling them to provide precise tax advice on transaction operations.

VAT Requirements in UAE

A rapid examination of compliance helps ensure that the focus is directed on critical areas of VAT implications and fast corrective actions can be performed.

Internal audit is an independent and objective examination of an organization’s operations, risk management processes, and internal control systems. The primary purpose of internal audit is to identify areas of improvement, evaluate risks, and ensure compliance with laws, regulations, and industry standards. Overall, it provides management with objective and independent assessments, enabling them to make informed decisions, enhance internal control systems, and achieve organizational objectives.

Internal audit is an independent and objective examination of an organization’s operations, risk management processes, and internal control systems. The primary purpose of internal audit is to identify areas of improvement, evaluate risks, and ensure compliance with laws, regulations, and industry standards. Overall, it provides management with objective and independent assessments, enabling them to make informed decisions, enhance internal control systems, and achieve organizational objectives.

ADEPTS Tax Consultants are qualified to conduct a rapid Compliance check where, based on industry and experience, they will concentrate on error-prone areas and recommend corrections.

UAE VAT Impact Analysis

Non-compliance can result in administrative penalties, and any corrective action will also result in administrative penalties from the FTA.

For example, any non-compliance found can be remedied by making a Voluntary disclosure (VD).

Any discovery or hint of non-compliance must be immediately followed by an Impact Analysis to determine the effect on the company’s cash flow.

frequently asked questions

VAT Health Check is a comprehensive examination of an entity's compliance with UAE Federal Tax Authority regulations (FTA). It is also known as VAT Due Diligence, VAT Compliance Review, and VAT Pre-Audit Review.

The primary aim of a VAT Health Check is to:

  • Ensure compliance with the UAE VAT law and relevant FTA requirements.
  • Ensure the effectiveness of a tax-registered entity's applied controls
  • Gain confidence that non-compliance is identified
  • Take corrective measures and comply fully with UAE VAT law.
  • Prepare the company for any FTA audits and answer any FTA-related questions.
  • Noncompliances found before FTA review are exempt from hefty fines.

Typically, a health examination can last between one and four weeks. However, it depends on following aspects.

  • Size of the business
  • The complexity of the entity's transactions – based on its industry or geographic presence
  • Types and quantity of intercompany transactions within the same business group (not tax group)
  • Volume of transactions

Why Choose ADEPTS

Our tax specialists have extensive knowledge of all types of business sectors. Our skilled VAT professionals will assist you in numerous ways to ensure your company's full VAT compliance with FTA laws. After conducting a VAT health check, our VAT specialists will assign your business a grade based on the number of passed and failed checks. So contact us today!

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