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6. VAT on imported goods: RCM (Box 6, 7 & 10) 2. There must be reconciliation between VAT
Report and books of accounts. Sales as per VAT
7. VAT on imported services: RCM (Box 3)
Return must be reconciled with the Statement
8. Purchases not subject to VAT: No disclosures in of Comprehensive Income except for Out of
VAT Return Scope Supplies. It is recommended to prepare
Reconciliation Sheet along with the reasons for
Audit Information Request duly filed along with variation.
Trial Balance must be submitted to the Auditor
for each tax period within 5 working days. In case 3. There should be separate ledgers for Out of
additional time is required, taxable person may scope sales, Zero-rated Sales and Standard
request for an additional time by replying to their Rated Sales, otherwise it would be difficult to
email. Auditor may come to the premises of taxable prove the Taxability of each transaction at the
person after giving an intimation and confirming time of Audit if conducted by AUTHORITIES.
the availability.
4. Nature of transaction with respect to
After the physical meeting, Auditor might ask Reimbursement and Disbursement should
taxable person to furnish additional documents and be carefully analyzed and allocated to the
information. Following additional documents could respective tax code accordingly.
be asked by the Tax Auditor depending upon the 5. Consider Adjustment of the previous erroneous
business model, complexities and risk ascertained difference in the subsequent VAT return in
by Tax Auditor:
which the error has been discovered if there is
a. Contract for top 5 customers no need to file Voluntary Disclosure
b. Previous years Financial Statements and 6. Official and Commercial evidence in case of
latest management report export of goods must be retained.

c. Ageing of Accounts Payables 7. Export of Services: Ensure the recipient of
services does not have a place of residence in
d. Description of transactions between related
party entities the State and shall be outside the State during
performance of the services.
e. Top 5 invoices for each tax period under
Audit for Sales (SR, ZR & OOS) and Purchases 8. Use exchange rate as per Central Bank on Daily
(Where input VAT was recovered). Basis to avoid non- compliance. Central Bank
exchange rates are being published on the
f. Any other question or information specific Central Bank UAE website.
to the business
It is better to be error free when the returns are
Lower Audit Risk: Few Factors to keep in mind prepared. A smaller error could result into MILLIONS

1. Honesty is the best policy. Do not try to hide OF FINES. It is recommended to save draft option
anything from authorities. Report all your (DRAFT TAB) before filing the Return and get it
revenue, including side gigs, commissions, reviewed. It must be verified and vetted by the
investments, and interest that the bank pays on concerned person. There should be zero tolerance
your savings, even if it is minuscule. towards non-compliance.

Disclaimer:
This article and/or write ups and/or any of its content shall not be treated as opinion and/or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their best
judgement in the best interest of their requirement and should seek a formal opinion on any issue.

The Institute of Chartered Accountants of India (Dubai) Chapter NPIO TAX JOURNAL 2020 29