Corporate Tax Audit in UAE

With the public declaration by the Ministry of Finance (MoF) of the UAE that a new federal Corporate Tax Audit in UAE (CT) system would be implemented across the nation. Under which applicable companies must submit mandated corporate tax audit in UAE. The system will be in place for fiscal years beginning on or after June 1, 2023.

What is Corporate Tax Audit in UAE?

A Corporate Tax Audit in the UAE is a mandatory process to assess the tax liability, compliance, and financial records of companies that meet certain criteria. During this process, an auditor reviews the financial statements, tax returns, and related documents to identify any discrepancies or errors.

Corporate tax audits are conducted and submitted to the government to determine whether a taxable organization is complying with corporate tax law and FTA guidelines. It is mandatory for all companies to adhere to these corporate tax laws and audit procedures.

The FTA investigates if the taxable companies have settled all debts and that all taxes are due to have been collected and paid to the authorities within the time limit specified through the tax audit.

Who needs Corporate Tax Audit in UAE?

As per Ministerial Decision No. 82 of 2023, applicable taxable persons must prepare and maintain audited financial statements for corporate tax if they meet the following requirements:

  1. A Qualifying Free Zone Person.
  2. A Taxable Person earning Revenue exceeding AED 50,000,000  during the relevant Tax Period.

It’s important to note that corporate tax audits in the UAE are not conducted randomly but according to specific criteria mentioned earlier. To avoid fines or penalties related to a tax audit, businesses must ensure they comply with all tax regulations and laws.

Conditions for Preparing Audited Financial Statements for Corporate Tax

Individuals Should Follow the Accounting Standards to Prepare financial Statements For Corporate Tax. If,

The Revenue Exceeds 50 million Dirhams: IFRS

The Revenue is less than 50 million Dirhams : IFRS For SMEs

Qualifying Free Zone Persons in Dubai are also required to follow IFRS Accounting Standards to prepare Financial Statements for Corporate Tax in the UAE.

Corporate Tax Audit Process in the UAE

Companies can ensure compliance with FTA regulations in the UAE and prepare for a corporate tax audit by taking the following necessary actions:Corporate Tax Audit in UAE -YUGA ACCOUNTING | Dubai | Ajman | Sharjah | Fujairah | Umm Al Quwain

Step 1: Without any particular reason for doing so, the FTA officials will examine the company’s corporate tax returns and other information.

Step 2: The auditor(s) will have a meeting with the company at the appointed place on the time and date specified to start the audit process.

Step 3: The auditor may request originals or copies of business documents during the corporate tax audit, as well as take samples of the goods and other on-site assets. The party being audited has the right to request the tax auditor’s qualifications, such as their expert identification cards, to verify their legitimacy.

Step 4: The authority can mandate a re-audit if anything odd is discovered during the audit that could affect the tax return. The person being audited has the right to ask for a duplicate of the notice and any relevant documents and to attend the auditing procedures that are carried out away from the official locations.

Advantages of Corporate Tax Audits in the UAE

The purpose of a corporate tax audit is to ensure that companies are paying the correct amount of tax and adhering to the regulations set by the Federal Tax Authority (FTA) in the UAE. Non-compliance with tax regulations can result in corporate tax penalties or legal action. Here’s how auditing your documents for corporate tax can benefit you:

  1. Regular audits can improve the veracity and accuracy of the information provided to potential buyers, which can be especially helpful for owner-managers who intend to sell their company within the next three years. Overall, an audit is a crucial tool for guaranteeing sound financial standing, lowering the risk of fraud, and giving businesses helpful advice.
  2. An essential tool for locating flaws in an organization’s accounting systems and recommending improvements is auditing. Additionally, this procedure assists in informing our partners of any circumstances or topics that might benefit from our counsel.
  3. In addition, an audit gives directors who are not involved in day-to-day accounting tasks the assurance that the company is operating in accordance with the information it is receiving. This may lessen the opportunity for fraud and dishonest accounting techniques.
  4. An audit also makes it easier to give advice that can help a business in real ways financially. This includes perceptions of the operation of the company, anticipated margins, and methods for achieving them. The recommendations range from improving internal controls to lowering the risk of scams or tax planning.

Corporate tax audit  in UAE

YUGA Accounting boasts the best tax consultants in the UAE, providing professional and expert corporate tax services, including corporate tax auditing for your business. With extensive experience in VAT and Excise Tax in the UAE, our team now includes FTA-approved corporate tax consultants. We are equipped to offer top-tier services in corporate tax, ensuring compliance and optimization for your business.

  1. Corporate Tax Services

  2. Corporate Tax Registration

  3. Corporate Tax Impact Assessment Services

  4. Corporate Tax Return Filing

  5. Corporate Tax Audit

 

FOR MORE INFORMATION, CONTACT US :

Phone : +971 52 1952 532 / +971 4 240 1110

Mail-Id : info@yugaaccounting.com

Website : www.yugaaccounting.com