How to Create a Strong Internal Audit Structure for Your Business?

With so much global uncertainty, change seems to be the only true constant. Having a strong internal audit department can help business leaders make better decisions for future growth and success. Hence, it is vital to employ a robust internal audit structure in the company. The internal factors can include the functioning of different departments, processes, the well-being of the staff, robust payroll system etc. In addition, an internal audit can ensure that the systems put in place are efficient and serve the company management’s intended goals.

The employees carry out internal audits to gauge overall risks to security and compliance to identify if the company is following internal guidelines. Management teams can use the reports generated from internal audits to identify areas that require improvement. Internal audits measure company objectives against output and strategic risks.

A robust internal audit structure in a company will ensure an organization is competition ready in the industry. Following are some of the best audit practices.

Risk assessment and business strategy

The audit team should understand the business strategy and assist the management by identifying and prioritizing the areas or processes that require attention and audit focus. The team should study all the previous audit reports and findings, and draft a risk assessment report. It should address all the pain points and report any results to enable the organization to:

  • Prioritize audit projects according to the level of potential risk
  • Determine the direct relation to the level of the risk
  • Plan for performing internal audit projects in risk areas to minimize the risk of loss
  • Use time in an effective and efficient manner

Training the internal audit team

The internal audit team should be trained to conduct an effective audit program and meet required audit standards. It is vital to gain an understanding of the existing processes and procedures utilized in the processing of high volumes of claims data. The training by adopting the modern technologies with specific checklists provides a higher value-added opportunity for the company to ensure sound management systems.

Reporting structure of the company

The transparency in the company’s reporting structure would assist the internal audit team to observe and provide recommendations with respect to auditing guidelines in Dubai and to improve processes and controls. Any discrepancies in the reporting process will negatively affect the communication and working of the internal audit team.

Adopting data analytics on the internal audit process

An effective audit can be performed by adopting data analytics on the internal audit process. It provides enormous amounts of clean, structured data and provide necessary insights for the internal audit team. It further enables the auditors to extract the required information, identity, analyse patterns, and detect any discrepancies in the system.

Benefits of internal audit

Having understood the audit best practices and management’s responsibility for internal controls, let’s concentrate on the benefits of internal audit

  • The scope of the internal audit is defined by management or the Board but, not an outside agency
  • Internal audit “reports” directly to management or the Board
  • Improves the “control environment” of the organization
  • Makes the organization process-dependent rather than person-dependent
  • Identifies redundancies in operational and control procedures and recommends to improve the efficiency and effectiveness of procedures
  • Serves as an “Early Warning System” by identifying the deficiencies and make amendments prior to regulatory or compliance audits
  • Ultimately, it increases the accountability within the organization


Having an internal audit team would assist the management with the company’s risk assessment process and ensures that the responsibility for maintaining a system of internal controls has been fulfilled.

How Can Business Owners Benefit from the Tax Agent Services in UAE?

Tax is a confusing term for many business owners. Hence, according to a study, most business owners who file the tax returns choose to use an accountant or tax agent services UAE. It is also noted that many companies would like to appoint tax representatives for increased accuracy, low stress, and maximum refunds. Tax agents are preferred as they are professionals and communicate better with the tax authorities to ensure the tax returns are technically correct.

What is tax agent services UAE?

Tax is an evolving field due to the advancements in technology, and the new clarifications will become an everlasting process. Since tax agents are trained experts in the field, they are better positioned to advise business owners about the tax.

Tax agent services UAE is a professional firm or any person registered with the Federal Tax Authority (FTA) in the register of tax agents. A tax agent is a person or an agency appointed to represent another person before the FTA and fulfil his tax obligations and the associated tax rights.

Following are the reasons on how business owners can benefit from the tax agent services UAE:

1. Avoid stress by appointing a tax agent

Agree that knowing to file your returns all by yourself is a good thing. But note that you are liable for the unintentional minor errors. You may have to deal with the FTA if they come knocking and pay hefty fines, penalties or interest that creates stress. But what if you have professional tax agents by your side? Half of your tension comes down with the presence of tax agent services UAE and makes it easier for you to focus on your business. A qualified tax representative ensures your tax returns are accurate and compliant with tax laws.

2. Communicates well with FTA

The common reason that an average person face is getting confused to answer correctly with FTA. They are:

  1. Communication barriers while talking to the tax authority
  2. Unable to clear the doubts in a call to tax helpline
  3. Confusion in getting a fine waived off or couldn’t understand the reason for a fine
  4. No clarity on tax laws
  5. Doubts in getting information on tax refund claims
  6. Answering queries received from tax authorities

3. Saves time

Though it seems that preparing tax returns yourself is a secured method, filing wrong returns can bring more danger than you expect. It isn’t easy to get clarity on exempted income, claimable expenses, and many other things which keeps changing. So, spending a few hours with your tax representative ensures filing tax returns with zero errors and saves a lot of your time.

4. Meeting deadlines

Many individuals tend to keep the tax filing to the last moment. But when it is due, they forget, don’t get time to return filing or some other reason. Also, they miss out on keeping track of deadlines and delays the returns filing that leads to penalties. But a tax agent always ensures deadlines are met without delays and updated with tax notifications issued by the tax authorities.

5. Speak in the language of law

Sometimes, a normal person finds it difficult to explain the issues to tax authorities and understand what they are saying. It is because a normal person can’t get a reference from the tax laws. However, a tax agent can communicate in the language of law with the authorities, and both can understand their viewpoints in a better manner.


Whether you have to file corporate tax or have queries regarding tax laws, hiring tax agent services UAE is a better option to avoid the possible uncertainties.

Tax Consultants Dubai- Advantages of Hiring Them

Filing taxes is definitely not an easy job. There are various complicated processes involved and business owners have to deal with huge calculations. Moreover, the tax filing rules and regulations changed over time. Hence, it is a good idea to hire professional tax consultants who can help you without making major errors.

Clarifications on tax deductions

Tax consultants are professional and can easily identify the potential tax deductions that you have to face every year. Besides, they even advise on opting for strategic investments as well as avoiding major tax liabilities in the future. Due to this reason, it is always a good idea to hire tax consultants Dubai.

An efficient tax consultant provides you with good advice along with effective methods so that you can save on your taxes. Moreover, using their guidance, you will be able to save huge on taxes, that too in a more legitimate manner. Also, you will be able to improvise the financial portfolio.

For example, hiring a tax consultant will help in identifying tax deductions and guide you so that you can save a significant amount when filing tax returns.

Help in saving time

One of the biggest problems that most people face is filing by the end of a financial year. As a result, we often end up making investment decisions quickly. After all, it takes a lot of time as well as effort to ensure that the tax return that you filed is correct.

Hiring a tax consultants Dubai with his professionalism will dig up the financial portfolio you hold, carefully check the income history along with your savings. It is an essential step before you are filing for income tax returns.

Since they will do all the legwork, you will be able to do other essential works that are necessary to perform before tax filing.

Avoid mistakes in the tax filing

The entire process of tax filing is quite hectic and time-consuming. As a result, it is common to face stress and if you don’t understand the process of the tax filing, you will automatically end up making mistakes. Let us not ignore the fact that making mistakes in tax filing can eventually force you to pay hefty fines.

Revenue services evaluate the tax return to check if there are any inaccuracies in different ways. Due to this reason, it is always a good idea to hire tax consultants Dubai as they have a professional way of understanding various tax laws.

Proper financial planning

Financial planning plays a vital role when it comes to tax planning and a tax consultant can plan everything. For example, whether you want to invest in a four-wheeler or a house, with proper expenditure as guided by the tax consultants, you will be able to save a lot of money. Moreover, you will be able to maintain the tax liabilities as well. Hence, if you are someone who wants to plan your tax expenditure, make sure to hire tax consultants Dubai.

With This Easy Method, You Can Register for VAT In the UAE Quickly

VAT stands for value-added tax. It is a tax levied based on their consumption rather than their income. It is imposed on the price of a product or service at each production stage, distribution, or sale to the end consumer.

Value-added tax, or VAT in the UAE, commenced on the 1st of January, 2018. The regulation was started as a means to provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.

Benefits of VAT Registration in UAE:

  1. Since VAT is levied on the consumption of goods and services, it ensures that the government is at the receiving end of a stable revenue generation mechanism.
  2. VAT in the UAE aims to simplify the tax collection system by making the taxes levied less complicated and repetitive.
  3. It promotes savings among consumers.
  4. VAT registration in the UAE proposed complete digitalization and computerization of the tax collection system.
  5. VAT is collected in small instalments, so the consumers have minimal burden.

Who can register for VAT in UAE?

  1. Mandatory VAT registration in UAE for businesses whose annual turnover is more than AED 375,000.
  2. Voluntary VAT registration in UAE for businesses whose annual turnover is between AED 187,500 & AED 375,000.
  3. Startups whose VAT attracted expenses are more than AED 187,500.

Step-by-step Guide For VAT Registration in UAE

1 Step: create an account on the digital portal of the Federal Tax Authority, UAE.

2 Step: upon registering for an account, commence the procedure as guided by the website. For this, you may need to prepare a few new documents in advance.

  1. Copy of Trade License
  2. Passport copy (Owner/partners)
  3. Emirates ID (Owner/partners)
  4. Memorandum of Association (MOA)
  5. Company’s Bank Account details and IBAN
  6. Details Business Turnover for the last 12 months (Balance Sheet, Audited Reports or Bank Statements)
  7. Customs Authority Registration code
  8. Company’s registered address and P.O. Box.
  9. Projected revenues and expenses for the next 30.
  10. Details of Business Activities. (Import/Export or Trading).
  11. Names of GCC countries if doing business in them.
  12. Name of Tax Group (if they want one tax group number for all the entities).

3 Step: once you submit all relevant details and documents successfully, you will receive a Tax Registration Number (TRN) upon approval by the FTA.

Voila! You’re done!

However, if this procedure seems complicated and tedious, we have the perfect solution for you.

Fastrack your VAT Registration UAE Process!

Earningo UAE is a professional CA firm that offers Tax Consultancy, Auditing & Accounting Services in Dubai, UAE.

With experts on board, get your VAT registration and other compliances fulfilled with utmost speed and meticulousness! We are experts to provide VAT registration in Dubai.

Looking For Professional Accounting Services in Dubai?

We, at Earningo, have more than 15 years of experience and specialize in providing accounting and VAT compliance services in Dubai, UAE. Our customer-oriented mindset and a team of highly skilled professionals make us one of the best consultancies to offer accounting services in Dubai.

Our Team and Vision

Our team consists of accomplished and energetic chartered accountants who are experts in their fields like auditing, accounting, tax consultancy, and business consultancy. Each and every individual professional is highly committed to our clients and keeps them on their number one priority list. Our team will deliver their services on time without compromising on the quality of work. That’s something we all need, in today’s times, don’t we?

Why Do You Need Us?

You will already be aware that maintaining accounts on a regular basis is not only beneficial for the growth of your company but is legally mandatory as well. According to the Commercial Company Law or UAE Federal Law No. 2 of 2015, companies failing to maintain their account books have to pay a penalty amount of around AED 50,000 or more than that!

This is why trusting our consultancy’s services is the best way to stop worrying about the maintenance of your company’s accounts! Isn’t it?

What Makes Us The Best?

With 100% client satisfaction, we have become the most sought-after consultancy to offer accounting services in Dubai. We have a dedicated team of highly skilled accountants who are experts in handling accounting or bookkeeping. Also, they have in-depth knowledge of UAE legislation and laws and stay up to date on the latest developments in these laws.

Currently, our team not only maintains the accounts of several reputed companies in Dubai but companies all around the UAE as well. As per your company’s requirements, we are ready to provide both on-site and off-site accounting services. The choice is left to you!

Our Accounting & Bookkeeping Services

Now, let’s check out what kind of accounting & bookkeeping services we offer to our clients. We provide:

  1. Periodic bookkeeping services
  2. Backlog accounting
  3. Setting-up accounting systems
  4. Accounting review
  5. Monthly/quarterly financial reporting
  6. Banking & credit card reconciliation
  7. Accounts payables and accounts receivables
  8. Setting-up accounting procedures and internal controls
  9. Periodic financial reports of the business to the management (MIS)
  10. Management of PDC or Post Dated Cheques and many more.

We will also help your company in preparing full financial statements, payroll processing, and providing training & supervision to accountants. Another important thing that we focus on is providing training on how to use accounting software to company employees. Accounting software like Tally, Peach Tree, and Quick Books are some of the software, whose installation and training will be provided by our team of expert accountants.

Other than providing accounting services in Dubai, we are also known for our highly skilled VAT consultant team. There are three main services provided by us related to VAT and they are – VAT Advisory, VAT Compliance, and VAT Agent. Earningo UAE also offers free consultancy on VAT Registration.

Want To Try Our Services?

If you wish to work with us or have any special accounting services you require, contact us today! We promise to offer you our services at a competitive quote without compromising on transparency or quality. So, what are you waiting for? Give us a call right now!

How to Apply for Tax Registration in Dubai?

One of the best ways to get your business or firm recognized by the government is to get it registered as one of the tax-paying firms. When you have completed the process of tax registration in Dubai, a government allows a goods-service provider or a business firm to collect Value Added Tax from its customers and further process it to the government.

A firm needs to pay tax, which does a business on a large basis and enjoys a large amount of profit. Tax registration is only mandated for a firm that earns above a certain amount. However, a firm that does not have enough earning is exempted from paying tax.

What is a Tax registration number?

Tax registration is a very easy process when you have all the required documents. After you have registered as a tax-paying body, the government provides you with an exclusive fifteen-digit number. This unique number is what that the government uses to recognize your proceedings and tax submission.

A person under whom the number is registered is known as a registrant. Therefore, any transaction or business made in the name of the firm must include a registration number in all kinds of documents. Also, a registrant will be liable for all kinds of tax-related issues and proceedings.

Benefits of getting tax registration completed

  1. You become a legal and trusted firm that is recognized by the government. And it may help you gain more customers.
  2. It allows you to collect value-added tax from the customers and further process it to the government.
  3. You become eligible to take the VAT credits on your tax-generated invoice.

How to apply for tax registration in Dubai

It is very easy to get yourself registered as a tax-paying firm in the UAE. You just have to follow a certain set of rules, and your company should have a yearly income that is set by the government. Thus, let us look at all the steps that you have to go through to get your firm registered.

  • The first step is to log in to the e-service of the Federal Tax Authority, and then get your firm registered.
  • After you have registered, you will have to fill a form that has eight sections, that are mandatory to be filled, which records information about your firm. It also records the type of firm, its relationships, area of business, and also, confirms the legal aspect of your firm. However, your firm must have a yearly earning of AED 375,000, to be eligible to pay taxes.
  • Then after you have properly reviewed your details, you will have to submit the form for further processing.

Once your information is cross-checked by an official of the tax authority, you will receive a tax registration Dubai number. However, it is a time-consuming process and can take up to three or four weeks.

A tax-paying firm is regarded as trustworthy by its customers. Consequently, if you are eligible, then it becomes very easy to get your company registered. Therefore, getting your company registered also allows you to do business overseas and expands your business opportunities.


How to File ESR Notifications in UAE?

On April 30, 2019, the UAE issued Economic Substance Regulations as part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation. Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies defines the Regulatory Authorities responsible with the administration and enforcement of the Regulations.

ESR, or Economic Substance Regulation, is one of the most talked-about topics in the UAE business world since it went into effect. Despite the passage of time, anomalies in the filing of first notifications and varied processes for different agencies put enterprises and firms in a bind. As a result, the firms want counsel from someone with a wealth of knowledge and who watches announcements/clarifications in the ESR sector. Firms and businesses that do not follow the ESR laws and regulations risk being fined and having their operations suspended.

Because of this significant change in the UAE’s business landscape to implement global level compliance, mainland, free zone, and offshore enterprises in the UAE must provide economic substance in designated relevant operations undertaken in the UAE. The first step of ESR compliance is to file an economic substance notification with the appropriate regulatory agency in the UAE within the specified timeframe, i.e. by the first ESR Report filing date, which is January 31, 2021.

Do you need to file ESR?

  • Intellectual property business
  • Banking business
  • Shipping business
  • Insurance business
  • Holding company business
  • Distribution and service centre business
  • Headquarter business
  • Lease-finance business
  • Investment fund management is a lucrative business.

It is vital to note that for accounting purposes, several corporations or consolidated groups of companies are not permitted to file a single notification. Each company must file its own application, as consolidated ones are judged invalid. To prevent such a predicament, it is necessary to get advice from reputable expert CA businesses in Dubai, provided they have prior experience offering ESR services.

Recent developments is ESR?

A new category of exemptions was created with the implementation of Resolution 57/2020. Notification must be filed along with documentary evidence to demonstrate the position in order to get the exempt status for ESR. In addition, UAE FTA will lead the charge as an authority in place of each licensee’s regulatory authority; for:

  • Licensees’ assessment of their ability to pass economic substance testing
  • imposing sanctions for non-compliance
  • Licensee appeals are heard and a decision is reached.

The following penalties have been enhanced as a result of the same resolution:

As a result of the new modification, enterprises in the distribution and service business will need to make further clarifications in their ESR filings this year. Notifications, reports, and documents that must be filed with the appropriate authorities will now be done through a portal that the UAE Ministry of Foreign Affairs has yet to launch.

Eligibility Assessment

First and foremost, the company must guarantee that the operations it performs are included in the list or subset of relevant activities. The firm can verify new rules by visiting the UAE Ministry of Finance website for confirmation or information. Only licensees and exempted licensees who engage in relevant financial activity are required to file Notification within six months of the end of that period.

After that, the company must determine whether or not they qualify for the Economic Substance Test. Firms can find the template notification and ESR report on the Ministry of Finance website before submitting for the notification.

Change Email ID on Federal Tax Authority (FTA)

The Federal Tax Authority (FTA) is a government entity responsible for administering, collecting, and enforcing federal taxes across the UAE. It helps foster an environment that drives outstanding economic development. The FTA helps keep the sturdy investment infrastructure and legislative system intact to ensure all international standards are met. It is the body responsible for ensuring that the tax system is fairly and transparently implemented. It ensures all resources are redistributed to facilitate the continued growth and development of the nation and enrichment of the people.

For any business to be registered with the FTA ensures that is it acknowledged by the government as the supplier of goods and services and is authorized to collect VAT from customers and remit the same to the government. The FTA portal is extremely easy to operate and one can easily register and maintain all records efficiently. It answers all the queries related to support, goods, refunds, VAT, etc. on the portal.

It has recently enabled the online option where one can change the login account email address that is registered with the FTA Tax Portal. The process is extremely easy and hassle-free and here are instructions on how you can update it.

What do you need to do?

1.Log in to the FTA tax portal and select –> My Accounts –> My Profile –> New Email Address –> E- Verify

2.Come Back to the same page – My Accounts –> My Profile –> New Email Address and attach a letter stating reasons for change that are duly signed and stamped.

3.The letter format that is needed is available in the guide section on the FTA website and can be easily downloaded – -> VAT -> Guides, References & Public Clarifications -> VAT Guide (Registration).

4.This letter must be on the official company letterhead, should include a company stamp and official contact details of the company.

5.Attach the copy of the passport of the old and new email account holder.

6.Attach the copy of the Emirates ID of the old and new email holder (if applicable)

After submitting the application, the FTA will review the request and take appropriate action within 5 business days. If the FTA requires any further details in order to process the application, the user will receive an email notification setting out the information that is needed

When the request for email change is approved, the user will receive an email notification on the newly registered email address and the email will be updated in the system.

Note: Once the new email address is updated on FTA, the user will no longer be able to login to the e-Services portal using their old email address. They will need to use the updated email address to log in to e-Services.

We are always committed to answering your questions, providing you with assistance, and hearing your comments and concerns. Contact us today for us to help you with all your queries.

Compilation of ESR Notification Deadlines for various Relevant Authorities

UAE Economic Substance Regulations (ESR) notification for all free zones is mentioned below:

Sr. No. Relevant Authority Deadline   Remarks
1 Dubai Silicon Oasis Authority (DSOA) May 31, 2020 ESR notification for DSO companies, form must be completed and emailed to of Dubai Silicon Oasis Authority (DSOA).
2 Dubai South Free Zone (Dubai Aviation City Corporation) June 07, 2020 ESR notification for Dubai South Free Zone (Dubai Aviation City Corporation). Form must be completed and emailed to of Dubai South Free Zone
3 KIZAD (Industrial & Free Zone Authority, Abudhabi Ports) June 20, 2020 ESR notification for Khalifa Industrial Zone Abu Dhabi (KIZAD), form must be completed and emailed to – both soft copies (MS Excel file and scanned copy) for KIZAD
4 Dubai Internet City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Internet City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Internet City free zone.
5 Dubai Academic City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Academic City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Academic City free zone.
6 Dubai Science Park (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Science Park (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Science Park free zone.
7 D3 (Dubai Development Authority) June 25, 2020 ESR notification for D3 (under Dubai Development Authority). Declaration Form to be submitted at related to D3 free zone.
8 Dubai Knowledge Park (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Knowledge Park (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Knowledge Park free zone.
9 Dubai Production City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Production City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Production City free zone.
10 Dubai Outsource City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Outsource City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Outsource City free zone.
11 Dubai Media City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Media City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Media City free zone.
12 Dubai Studio City (Dubai Development Authority) June 25, 2020 ESR notification for Dubai Studio City (under Dubai Development Authority). Declaration Form to be submitted at related to Dubai Studio City free zone.
 13 Department of Economic Development (Ministry of Economy – All 7 Emirates))  June 30, 2020 ESR notification for Department of Economic Development (DED) under Ministry of Economy login Portal to visit at 20of%20Economy/clf/. ESR notification for all 7 emirates can be found here.
14 Dubai World Trade Centre June 30, 2020 ESR notification form for Dubai World Trade Centre (DWTC) must be complete and emailed to
15 Dubai Multi Commodities Centre June 30, 2020 ESR notification for Dubai Multi Commodities Centre (DMCC) can be accessed at for all DMCC related queries.
16 Dubai International Financial Centre June 30, 2020 ESR notification for Dubai International Financial centre (DIFC) Portal can be accessed at for all DIFC related queries.
17 Hamriyah Free Zone Authority June 30, 2020 ESR notification for Hamriyah Free Zone Authority (HFZA), any query must be emailed to f& for more details.
18 Sharjah Airport International Free Zone June 30, 2020 ESR notification for Sharjah Airport International Free Zone (SAIF) can be submitted at
 19  Abudhabi Global Market  June 30, 2020 ESR notification for Abu Dhabi Global Market (ADGM), form must be completed, signed and emailed to
20 RAK International Corporate Centre June 30, 2020 ESR notificaiton for RAK International Corporate Centre (RAKICC) should visit Portal through registered agents.
21 Ajman Free Zone Authority June 30, 2020 ESR notification for Ajman Free Zone Authority to be e-mailed to for more details.
22 Umm al Quwain Free Zone June 30, 2020 ESR notification related to Umm Al Quwain Free Zone (UAQFZ) should visit
23 Jebel Ali Free Zone Authority June 30, 2020 ESR notification related to Jebel Ali Free Zone Authority can be submitted through the email: .
24 UAE Mainland Companies/Licenses June 30, 2020 UAE Mainland companies can file the ESR Notification through the following link:

ESR Notification for Dubai Mainland companies, ESR Notification for Abu Dhabi Mainland companies, ESR Notification for Sharjah Mainland companies, ESR Notification for Ajman Mainland companies, ESR Notification for Ras Al Khaimah Mainland companies, ESR Notification for Umm Al Quwain, ESR Notification for Fujairah Mainland companies

25 Sharjah Media City June 30, 2020 ESR notification related to Sharjah Media City can be submitted through the email: . You can download the form at:

Penalties in case of non-compliance with ESR:

Particulars  ESR Notification  ESR Reporting
Failure to submit before Due date AED 20,000  AED 50,000
Submission of Inaccurate or incorrect information AED 50,000  AED 50,000

The penalty in case of failure to submit the notification

An administrative Penalty amounting to AED 20,000 shall be imposed on Licensee or Exempted Licensee who has failed to submit the notification or any information or document required to be filed

VAT Audit – 10 Things You Can Do To Prepare Yourself For It

It has been 3 years since VAT has been introduced in UAE for the supply of goods and services. The UAE government introduced VAT on January 1st, 2018. It has been recommended for companies to complete their VAT audit by approved tax agents in UAE.

This is because tax experts who understand the regulations set by the Federation Tax Authority (FTA) will determine tax compliance and help companies to pay the taxes. It is expected that around 90% of the VAT registrants will pay their tax returns this year.

What is Tax and Tax Year?

Tax is a mandatory fee imposed on the taxpayer by the government to collect revenue and use it for public works such as providing infrastructure and other facilities for the country. A Tax Year is twelve months covered to pay tax returns. Individuals or companies can complete their tax returns monthly, quarterly, or yearly as mentioned by the FTA during the registration.

What is Tax / VAT Auditing in UAE?

Tax or VAT auditing is a simple procedure of examining a company’s documents like sales invoices, purchase ledgers, etc, by the approved tax agents. It ensures whether the company has cleared all the liabilities and paid all the taxes properly. The VAT auditing returns must be filed by the companies in a required format within the timeframe given by the FTA.

VAT Readiness

For smooth business operations, a systematic approach is essential. UAE-based companies should evaluate and review their business activities every day. If they focus on following the below points, there won’t be any confusions in VAT auditing:

  1. Understanding –The most important thing is understanding the operational processes and business domains. It will help companies to determine the faults internally.
  2. Preparation –Internally, prepare a checklist and formulate an implementation strategy.
  3. IT Systems –Ensure that all the company’s IT systems are VAT-enabled. Add Enterprise Resource Planning (ERP), accounting, and point-of-sale systems as well. Follow all legal regulations for completing implementation to comply with the tax requirements.
  4. Current Accounting –Keep your accounting book up to date. To become VAT-liable, the time of supply is very important.
  5. VAT Accounting –Tax returns need to be submitted to the government periodically. So, make sure you have all the correct account details and VAT codes set up for generating the tax return.
  6. VAT Return –Ensure your outgoing and incoming invoices are VAT-compliant, on both sales and supply fronts.
  7. Employees –Ensure your employees know about VAT. If not, educate them. Mention VAT duties and responsibilities in the employees’ contract papers.
  8. Public Officer –Appoint a knowledgeable public officer to represent your company before the VAT authority. Make sure he is suitable and prepared for the job.
  9. VAT Guide –Maintain a policy manual for your business to cover the company’s VAT policies.
  10. Contracts –Educate your contracts regarding VAT regulations and change of policies.

Advantages of VAT Audit Preparation

With the VAT enabled IT systems in place and a public officer being appointed,

  1. The company can easily assess its VAT compliance with the FTA guidelines and regulations. This way penalties can be significantly reduced.
  2. The company can easily face the FTA audit and answer any questions if required.
  3. The company can voluntarily call for an FTA audit and avoid penalties.


Federal Tax Authority or FTA is a government authority that conducts the VAT audit to examine the company’s financial status. Audit assessment ensures that no faulty transactions are happening in your company. They have the full authority to ask for any financial statement of any department in the company. So, it is recommended to have knowledge about VAT audit procedures and follow the guidelines set by the authority for a company to keep operating smoothly.