As per the federal decree law 36, in an event when the tax authority feels that the tax revenue is as at stake or the administrative and compliance burdens are at stake, tax auditing can be asked.

Not just auditing, even revised auditing can be asked if the tax registrant has made some changes to his policies or his business entity.

And when it’s decided that tax auditing will definitely takes place, the aforementioned decree gives the authority the power to appoint a tax auditor to pay a visit at the Tax registrant’s premises.

Documents required during tax audit services

When the tax auditor pays a visit, it’s important that the tax registrant is ready to present the following documents:

1. Records of all the supplies and goods
2. Tax invoices of previous years
3. Tax credit notes and alternative documents
4. Tax invoices and the alternative documents issued
5. Records of goods and services that have been disposed off
6. Records of goods and services that have been exported
7. Tax paid
8. Records of the cases where the goods and services were used for matters that are not related to the original objective of the Tax registrant’s company.
9. Records of any corrections made or adjustment made to the tax invoices
10. Records of the goods that are imported to the state

Penalty of not complying to the tax laws

If someone doesn’t comply with the tax laws and it’s found about during tax audit process, following are the penalties that they can face.

1. For non maintenance of financial records: AED 10,000/- penalty
2. For submission of incorrect tax returns: AED 5,000/- penalty
3. For failure to conduct business: AED 20,000/-
4. Failure to submit registration application: AED 20,000/-

If you want to prevent the above penalties and appear legal and compliant to the Authorities, you should reach out to KRV Auditing.