Books of accounts and Accounting software system review:

Proper accounting is mandatory in an organization to ensure that it complies the UAE VAT law which will result that there is no discrepancy during a tax audit by a tax auditor. If company using the accounting software that software used in the company should be capable of handling Proper tax invoice, Credit notes and recording reverse charge entries, calculating Output and input tax entries as per the FTA.

Review of calculation of Output Tax includes the following:

1. Whether all taxable supplies at standard rated are charged at respective tax rate. (as of now 5%).
2. To ensure that only eligible zero-rated supplies are charged as zero-rated and proper supporting documents are maintained.
3. To ensure that out of scope supplies if any are accounted properly.
4. To check whether the goods imported into the UAE through UAE customs are recorded under Reverse Charge Mechanism
5. To reconcile the amount shown in FTA records as value of goods imported and the output liability on such imports with the records shown under the books of accounts.
6. To check whether the services if any imported from outside the UAE are recorded under Reverse Charge Mechanism.
7. To check whether only the eligible input credit are taken against such import of materials or goods under reverse charge mechanism.
8. To check whether exempted supplies if any are recorded and reported properly.

Review of compliance of Input Tax includes following:  

1. Input tax claimed by the taxable person has to be properly reviewed to ensure that no discrepancies are detected during the tax audit.
2. We exercise verification such as: Whether only eligible input credits on purchases and expenses are claimed.
3. In the case of mixed supplies (exempted and zero rated / standard rated) whether the input credit is calculated as per the formula provided under the law.
4. Whether input credit on import of goods and services are calculated and claimed properly.

Review of the VAT returns filed

Our tax experts will review the Vat return files to be submitted to the authority and make sure that:

1. The output tax payable to the authority are recorded properly.
2. Check the eligibility amount is claimed as input credit.
3. The reporting of output tax under reverse charge are recorded properly.
4. Zero rated supplies and exempted supplies are recorded separately.
5. Additional reporting such as profit margin scheme, etc., are reported properly.
6. To check whether the due tax amount is paid to the tax authority before the due date periodically.