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Tax Audit Rules And Regulations in UAE Under Federal Law No. 7

In this article, you will get an understanding of tax audits and different facets of the tax audit that a normal person may be facing in the United Aram Emirates, according to the Decision No. 36 on the Executive Regulation of the Federal Law No. 7 of 2017.

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As you know or not, taxation plays a very important role in helping and advancing the economy of any country. That’s why the administration of a company should take care of how the taxes are carried out and determined, the tax refunds, should also take care of penalties and other services or facilities.

Remember, in UAE, the cabinet has announced Decision No. 36 on the Executive Regulation of Federal Law No. 7 of 2017, was announced on 24 September 2017. The main aim of announcing Decision No. 36 was to dispense with how people can easily get know-how about the tax and how the related authority will give value to it. Decision No. 36 was also advertised in the gazette of the country and come powerfully on the date of the announcement.

In this article, you will get an understanding of tax audits and different facets of the tax audit that a normal person may be facing in the United Aram Emirates, according to the Decision No. 36 on the Executive Regulation of the Federal Law No. 7 of 2017.

What is a Tax Audit?

According to Federal Law No. 7 of 2017, a tax audit is described as “ A process started by the administration to examine the commercial records or any other information related to a person controlling a business”. This was the legal analysis step done by Federal Tax Authority. In this procedure, the administration examines all the books of a company. 

According to the Tax Audit course, the authority can examine or inspect the following.

1 - The site where the tax audit can be held.

2 - Those documents that are related and are available at the site.

3 - All the resources that are related and are available at the site.

4 - Any type of accounting system, utilized by an organization that is possibly affected by Tax Audit.

Recommended: What is Input Tax?

Tax Audit Notice

Howbeit the authority plan for a tax audit, should provide an announcement that will explain the reason due to which the audit was being held and will also explain the potential outcomes if and only if the tax auditor is shut off while performing its duties. This announcement should be expressed in the written form before taking the start of the Tax Audit Process for the following people:

- The written notice must be given to the occupant or tenant where the audit will take place.

- The character in charge of the sites if and only if the occupant or tenant is not available on its sites.

3 - If both are not available, then the written notice ought to be posted on the sites where it can be seen easily and read by anyone on the sites.

The Tax Auditor should be forced to take the approval of the public prosecutor before taking the start of tax audit and must show the permit or legal notice that was issued by the Federal Tax.

The authority has the power to arrange the audit. They can also ask you to give a proof of “Being a Tax Auditor”. 

Tax Audit Results

Any individual that is subjected to a Tax Audit, should inform within 10 working days that will be calculated from the end result of the tax audit. Said “Decision of the Federal Tax Authority”.

Those individuals whose audits are done will be aware of the results of the audit. It is the right of every individual. He/she can also put a request to see or to get the documents and the data due to which Federal Tax Authority has decided to do the tax Audit. 

If any individual wants to see the documents and data, upon their request, they should submit the following information within the next 10 business days in the following aspect.  

- A duplicate of the requested data in written form or in electronic form such as mail etc. 

2 - If the requested information or the requested data is related to a person, then he/she has a right to ask for the authentic reports in the written form or in electronic form from the Tax Authority.

3 - Remember, the Federal Tax Authority can also reject the request of the individual who was audited under the following aspects. 

4 - If the reports or the data prove involvement in disclosure of any internal correspondence or any recommendations which are issued by the authority. 

- Any type of data that is secret and may involve in leaking the information of the relevant person or any other person or any individual. 

Point to remember: The conclusions of the tax audit are recorded in the audit report. And the report is the door that is used to get know-how about the company situation.

Recommended: Mistakes to Avoid While VAT Registration in UAE

Federal Law No. 7 of 207 was announced to provide an understanding of ways the tax will be dealt with easily in-country and to give understandable information to the individuals of the United Arab Emirates. 

If you are in need of Tax-related services or Audit and Accounting services, you should have a look at all the services presented by Inspire Tax Consultants. Inspire Tax Consultants is a reputed Chartered Accountancy Firm and will take care of any financial situation your business is currently facing. For more particulars on the services provided, contact us. We will be glad to help you.

In case, you’re in search of tax services in UAE or tax auditing services in UAE, or accounting services in UAE, you should take a glance at the services that are mentioned by Inspire MS Tax Consultants and Accountants. Inspire MS Tax Consultancy is a verified Tax Consultants in UAE who is an expert in solving all financial problems which your business is presently facing. 

We are here to help you at any time. Feel free to contact us. We will be happy to help you in solving your business’s financial problems.   

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