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The Federal Tax Authority can examine the records required to be preserved by a taxable person to verify a person’s VAT liability, known as the Tax Audit. FTA will give notification before the Tax Audit. Tax Audit is done in order to ensure that, the correct declaration has been made by the taxable person on the amount of tax payable to or recoverable from the FTA on their tax returns.
FTA determines how often businesses have to be audited based on the risk to the public revenue. In certain cases like, for large or complex businesses and businesses with past compliance history are likely to be subject to a tax audit.
When will be the Auditing?
> The audit will be usually conducted during FTA’s normal business hours, at its own offices or place where the person conducts business or keeps records.
> The taxable persons will be informed about the audit before 5 business days by the FTA. In cases of suspected tax evasion, there won’t be any prior notice given regarding the audit.
> Tax Audit reports will be notified within 10 business days of the end of the audit to the taxable person.
What must be done on receiving audit notification?
=> On receiving the audit notification, the taxable person must ensure that:
=> The relevant premises are accessible
=> Tax records are accessible
=> Relevant staff are present
The taxable person must offer full assistance and facilities to the tax auditor while auditing is being carried out.
