In the UAE, Corporate Tax (CT) and VAT compliance are intrinsically linked, as the foundation for both returns is the same financial data. A single error in bookkeeping can lead to non-compliance penalties from both tax regimes. FrankDigit Accounting Services offers specialized, proactive Compliance Audits that review your systems, records, and filings for both taxes simultaneously, identifying and correcting discrepancies before the Federal Tax Authority (FTA) does.
Our combined audit minimizes your overall tax risk and prepares your business for an official FTA inspection with confidence. Guided by Confidentiality, Transparency, and Integrity (CTI), Bilal Mogul’s team leverages deep technical expertise to ensure your tax position is optimized, and penalties for misreporting or late filing are preemptively avoided.
A Corporate Tax & VAT Compliance Audit is a comprehensive, internal review conducted by a tax expert to assess the accuracy of your business’s tax practices across both major federal taxes. It is a proactive health check designed to achieve two critical objectives:
- Reconciliation: To ensure that the revenue reported in your quarterly VAT Returns consistently matches the revenue reported in your annual CT Return, and to verify that VAT treatments do not conflict with CT deductions.
- Risk Mitigation: To confirm all underlying documentation (invoices, contracts) is compliant for both VAT (e.g., proper TRN, 5% rate application) and CT (e.g., deductibility of expenses, Transfer Pricing documentation).
This dual approach is the strongest defense against FTA assessments and audits, which often look for inconsistencies between these two tax streams.
Our compliance audit provides granular detail on areas of weakness and ensures your tax returns are robustly supported by your financials.
| Delieverable | How FrankDigit Delivers |
|---|---|
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Cross-Tax Reconciliation |
Detailed reconciliation of monthly/quarterly VAT Sales against annual CT Revenue to spot and resolve discrepancies and prevent audit red flags. |
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Deductibility Vetting |
Review of all expense claims to verify compliance with both Input VAT recovery rules and CT Allowable Deduction rules. |
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Transfer Pricing Cross-Check |
Verification that intercompany transaction pricing documented for Transfer Pricing also aligns with the appropriate VAT treatment (e.g., zero-rated services). |
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Documentation Integrity |
Auditing record-keeping to ensure invoices, credit notes, and purchase records contain all mandated FTA details for both tax laws. |
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Voluntary Disclosure Identification |
Highlighting past errors (e.g., incorrect VAT filing) so they can be proactively corrected via Voluntary Disclosure before an official FTA audit begins. |
A single accounting misstep can trigger multiple penalties across different tax streams; our audit is designed to prevent this systemic risk.
The FTA uses sophisticated data analytics to cross-reference your submitted VAT 201 data with your Corporate Tax Return (EmaraTax filing). If, for instance, your VATable sales (Output Tax basis) show a major divergence from your CT revenue, it signals a high risk of profit manipulation or misclassification. Our compliance audit ensures all Free Zone qualifying income, zero-rated sales, and domestic transactions are recorded identically for both tax purposes, ensuring complete alignment and reducing audit triggers.
Failing a combined compliance check can lead to cumulative penalties. Common errors we eliminate include: claiming Input VAT on expenses that are Non-Deductible for CT, or failing to maintain proper records, which incurs separate fines (up to AED 20,000 for CT record-keeping and AED 50,000 for repeated VAT record failures). Our proactive approach converts this high-risk scenario into a low-risk, compliant operation.
We offer a focused, efficient process that provides a clear compliance status and actionable corrective steps.
- Decode (Diagnostic Scan): We perform a deep-dive scan of your accounting system (Zoho/Xero/QuickBooks) to map your VAT codes and deduction categories against the respective Corporate Tax compliance frameworks.
- Simplify (Audit & Verification): We conduct the cross-tax compliance audit, verifying key transaction populations against source documents and producing a detailed report of all non-compliance issues (e.g., misclassified expenses, non-compliant invoices).
- Automate (Correction & Readiness): We assist you in preparing any necessary Voluntary Disclosures to the FTA to correct past errors and implement internal controls that ensure future VAT and CT filings are perfectly aligned and FTA Audit-Ready.
Don’t risk penalties from two tax authorities. Secure your compliance with a combined CT and VAT audit.
📞 Contact FrankDigit Accounting Services today to schedule your proactive Tax Compliance Audit.