We provide a comprehensive review of accounting transactions to be compliant with VAT. The following actions are implemented as part of VAT review.
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:
Whether all taxable supplies at standard rated are charged at respective tax rate. (as of now 5%).
To ensure that only eligible zero-rated supplies are charged as zero-rated and proper supporting documents are maintained.
To ensure that out of scope supplies if any are accounted properly.
To check whether the goods imported into the UAE through UAE customs are recorded under Reverse Charge Mechanism
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.
To check whether the services if any imported from outside the UAE are recorded under Reverse Charge Mechanism.
To check whether only the eligible input credit are taken against such import of materials or goods under reverse charge mechanism.
To check whether exempted supplies if any are recorded and reported properly.