The VAT returns filed in each tax period are solid information available with the FTA and all taxable and exempted supplies value will be available for them. The officer can review these details to identify if any taxable income is not reported to the VAT return or if any excess input recovery is made than actual expenses. 

When companies are not having the practice of periodic closing, they restrict back-dated entries and maintain reconciliation with returns so tax auditors can easily identify differences in the books. Such differences may be considered taxable if they are mistakes in reporting or not properly identified and explained to the officer. 

Goods exported will be considered zero-rated as per the provisions of the VAT law provided, they are supported with official and commercial documents. In existing practice in the UAE, many companies are not obtaining proper export documents, mainly exit certificates for the goods exported. Reasons for the non-availability of these documents are various, like those provided by the logistic company not mandated as per customs documents not properly collected etc. But those reasons may not be accepted by the tax authorities as the VAT in the UAE required official evidence is to have an export document issued by the customs authority.  

In a similar case, the officer can insist the taxable person consider all export of goods as local supply and consider the tax treatment for the local supply of those goods. Hence, it’s important that businesses should ensure proper documentation to comply with the zero rating of goods exported. 

Another approach taken by the auditors is to ensure that if there is any variance in the tax treatment followed by the company like standard rated reported as zero-rated or exempted deemed supplies or related company transactions not considered as taxable supply etc. Companies from industries that are subject to different VAT rates like real estate medical education transportation electronic services etc. May have to review the tax treatments to ensure compliance with VAT law. 

It is the responsibility of the taxable entity or Tax consultancy in Dubai to ensure compliance with the tax laws in the country. Also, entities should consider the approach taken by the tax auditors during the tax audit and the consequences of any non-compliances including penalties for such errors. It is advised to have a regular review of the tax treatment and procedures followed by the company.