The FTA confirmed the enthusiasm for enhanced market inspections in all emirates.
Businesses should be aware of increased tax inspections and audits. Tax audits and inspections are not surprising, as the tax system is based on the concept of “self-assessment”. Businesses are responsible for assessing their tax position and tax liability. Penalties act as a deterrent to tax evasion and/or committing violations.
In the first six months of 2022, the Federal Tax Authority (FTA) has conducted 9,948 inspection visits to local markets across the UAE. This is a 104% increase as he conducted 4,878 inspections in the first six months of FTA 2021.
On the excise side, inspections have found (a) approximately 5.5 million non-compliant tobacco products (without the prescribed “digital tax stamp”) and (b) approximately 1.07 million packages of non-compliant selective cigarettes. was confiscated. Products such as soft drinks, energy drinks, and sweetened beverages. Excise liability for such goods could total Dh 130.4 million.
Most recently, a commercial property in Dubai faced foreclosure for violating the Excise Act. The FTA found approximately 5.4 million noncompliant tobacco and tobacco-based products, packets without digital tax stamps.
In addition, 1,213 violations were issued and 404 non-registration notices were issued during the inspection.
Purpose and Collaboration
The FTA confirmed the enthusiasm for enhanced market inspections in all emirates. Its purpose is to ensure proper compliance with laws, laws and tax procedures. Tax compliance ensures a stronger national economy and ensures consumer protection.
The FTA’s press statement states that the FTA works with various government departments, ministries and authorities to protect consumers from non-compliant products, combat tax evasion, and ensure compliance with tax laws and procedures.
Tax guidance and procedures
Tax authorities issue appropriate guidance and clarifications from time to time to assist businesses in understanding their tax obligations.
About 29 public explanations, 25 comprehensive guides, 4 business bulletins and 1 awareness guide have been published on the value added tax (VAT) law. Similarly, about 7 public explanations have been issued for the Excise Act. In addition, the FTA has conducted various tax clinics throughout the emirate and has responded to tax inquiries from businesses.
In addition, companies have other modes of approaching FTAs to resolve queries such as nondisclosure clarifications, administrative exemption requests, and so on.
Aggressive action by companies
The general period for tax assessment is five years from the end of the tax period. Five years are counted separately for each taxable period. If the first taxable period after 1 January 2018 is completed, for example, in April 2018, the five-year period he will be completed by April 2023. will be counted accordingly.
On August 7, 2022, “Tax Conversation” explained the 4R principles for a comprehensive tax strategy. Companies must (a) be ready to comply, (b) respond to advice, (c) reveal to optimize, and (d) revolutionize to maximize.
Businesses should proactively manage tax compliance instead of fearing tax audits and inspections.
Pankaj S. Jain is Managing Director of AskPankaj Tax Advisors. If you have any feedback or questions, please contact us at info@AskPankaj.com. The views expressed are his own and do not reflect the policies of the newspaper.
