The Federal Tax Authority (FTA) has increased its VAT audit activity across the UAE.
Even small mistakes — a missing TRN, incorrect invoice, or wrong input claim — can trigger penalties up to 300%.
A VAT health check is a proactive review of your VAT records to ensure full compliance and identify refund opportunities before the FTA does.
Why Conduct a VAT Health Check?
- Detect VAT filing errors before FTA audit
- Avoid penalties and interest
- Identify missed input VAT recovery
- Improve documentation quality
What to Review During a VAT Health Check
- Registration Status – Confirm TRN and registration thresholds.
- Output VAT – Verify correct rates (5%, 0%, exempt).
- Input VAT – Ensure only eligible claims are made.
- Reverse Charge Mechanism – Check treatment for imports and digital services.
- Invoice Accuracy – Verify all mandatory fields per FTA standards.
- Filing & Payment Deadlines – Ensure returns are submitted on time
Common Red Flags
🚫 Missing or invalid TRNs on supplier invoices
🚫 Claiming VAT on personal expenses
🚫 Incorrectly applying zero-rate to local supplies
🚫 Failing to account for import VAT
How to Perform a VAT Reconciliation
- Compare VAT control account with FTA return totals
- Match sales per books with output VAT declared
- Match purchases with input VAT claimed
- Investigate variances
Penalties for Errors
- Late filing – AED 1,000 first time, AED 2,000 repeat
- Late payment – 2% immediately, then 4% after 7 days
- Incorrect filing – 50% of underpaid tax
- Deliberate misreporting – up to 300%
Benefits of Professional VAT Review
✅ Peace of mind before FTA audit
✅ Increased refund accuracy
✅ Stronger documentation
✅ Improved internal controls
Conclusion
In 2025, a VAT health check isn’t optional — it’s a smart risk-management step.
By reviewing VAT returns regularly, you can prevent costly FTA penalties and ensure consistent compliance.
Call to Action
At Advanced AnalytIQ, we perform VAT health checks, FTA audit support, and VAT refund reviews to keep your business compliant and penalty-free.
👉 Contact us for a VAT compliance assessment today.