A VAT health check is a type of VAT audit used to detect any risks and errors in the VAT by studying and evaluating the previously filed VAT returns and VAT refunds. It is important to ensure that this is both accurate and current. If not, your business may employ outdated client information and consequently, make a financial loss. The taxpayer is responsible for ensuring that all their items are aligned with FTA guidelines.
Worried about VAT compliance? You’re not alone.
Many SME owners in the UAE find themselves wondering: “Am I handling my VAT correctly?” The fear is real—mistakes in VAT compliance can cause serious financial strain, and Federal Tax Authority (FTA) penalties can quickly escalate from manageable to devastating.
You’re juggling growth targets, managing teams, and steering your business forward. The last thing you need is the constant worry about whether your VAT records are accurate, your returns are filed correctly, or your understanding of the regulations is complete enough to avoid costly errors.
Here’s the reality: input VAT calculations, compliance deadlines, and regulatory updates create a web of complexity that even experienced business owners find overwhelming. One missed detail or one misinterpreted rule, and you could be facing audits, penalties, and sleepless nights.That’s where our VAT Health Check service steps in. Instead of waiting for problems to surface, we proactively examine your entire VAT compliance framework. Think of it as a way of maintaining compliant financial records, but with a laser focus on eliminating risk before it becomes a crisis.
A VAT Health Check is essentially a preventive medical check-up for your company’s financial health. Just as regular health screenings identify potential issues before they become serious, a VAT Health Check systematically reviews your processes to detect compliance gaps and rectify them proactively.
This comprehensive review examines your VAT records, input VAT claims, return accuracy, and overall adherence to UAE VAT law. Unlike a mandatory tax audit imposed by the Federal Tax Authority, a VAT Health Check is a strategic and voluntary assessment that puts you in control of your compliance status.
The primary purpose is risk identification and remediation. Our team scrutinizes your VAT compliance procedures to uncover discrepancies that could trigger FTA penalties or prolonged investigations. We analyze:
This proactive approach delivers immediate value. Rather than waiting for the FTA to flag issues during a formal audit, you gain advanced visibility into your VAT compliance weaknesses. The result? You can address gaps on your terms, avoiding the stress and potential penalties that come with reactive compliance.
Each risk represents a direct threat to your operational efficiency and financial stability. The health check transforms these vulnerabilities into controlled, manageable processes that protect your business.
As an FTA-registered Tax Agency (TAN 30000764), we conduct comprehensive VAT Health Checks that go far beyond surface-level reviews. Our structured approach leverages the expertise of professionals with Big Four experience from firms like KPMG and Mazars, ensuring every aspect of your VAT compliance is thoroughly examined.
Our systematic VAT Health Check process follows these critical steps:
Our team specifically examines complex areas where most businesses struggle: input VAT recovery, proper categorization of supplies, and adherence to the latest regulations. We are legally empowered to represent you before the FTA, which means our VAT Health Check carries the weight of official agency status.
Common VAT Errors vs. CTC’s Proactive Solutions
| Common VAT Error | Potential Risk | CTC’s Proactive Check |
| Incorrectly calculated input VAT on invoices. | Under/over-claiming VAT, cash flow disruption, and potential penalties. | Detailed transaction review and validation of invoice accuracy. |
| Failure to apply the Reverse Charge Mechanism correctly. | Significant FTA penalties and incorrect VAT returns filed. | Specific checks on all cross-border transactions and services. |
| Poor or incomplete VAT records and documentation. | Inability to defend your position during a tax audit, leading to assumed non-compliance. | Review and guidance for IFRS-compliant record-keeping systems. |
| Mis-categorisation of zero-rated, exempt, and out-of-scope supplies. | VAT compliance breaches and inaccurate financial reporting. | Expert review of all revenue streams against current VAT regulations. |
Most businesses view VAT as a necessary burden—filing returns on time, maintaining records, and staying compliant. But what if your VAT compliance efforts could actually generate immediate cash flow improvements?
A comprehensive VAT Health Check transforms compliance from a cost center into a value-generating activity. When our team reviews your records systematically, we consistently uncover substantial amounts of unclaimed input VAT that businesses have overlooked. These discoveries translate directly into cash recovery through legitimate refunds.
The financial impact often surprises business owners. Unclaimed input VAT might include:
Beyond immediate recovery, a thorough assessment establishes robust systems for ongoing input VAT optimization. This means capturing every dirham of legitimate input VAT going forward. The strategic advantage extends beyond simple recovery; when you understand your true VAT position, you can implement proven cash flow strategies that transform VAT from a necessity into a financial management tool.
Selecting the right partner for your VAT Health Check in Dubai requires careful evaluation of credentials and expertise. The wrong choice could leave critical compliance gaps undetected, exposing your business to penalties and operational disruptions.
When evaluating potential advisors, prioritize these essential qualifications:
While many firms offer these services, the ideal partner is one who combines technical authority with a practical understanding of your business reality. The most effective VAT Health Check comes from advisors who can identify recovery opportunities while ensuring your systems support ongoing compliance.
Sleepless nights worrying about VAT compliance don’t have to define your business journey. With expert guidance and systematic processes, you can transform concerns about regulations into complete serenity about your tax obligations.
We turn your Accounting nightmares into a walk in the park. Our status as an FTA-registered Tax Agency means Caroline Thevenot and our experienced team handle everything from maintaining accurate VAT records to filing timely returns. We ensure your input VAT claims are optimized and your compliance framework eliminates risk.
Stop letting VAT complexity control your peace of mind. Book your free consultation today and discover how our proven approach transforms VAT management from a source of stress into a competitive advantage.
A VAT Health Check is a thorough review of your company’s VAT records, processes, and overall compliance framework. It is essential in the UAE due to complex regulations and the risk of significant FTA penalties for non-compliance. This proactive assessment ensures your VAT returns are accurate, input VAT claims are valid, and your procedures meet official standards, protecting you from costly issues before a mandatory audit occurs.
A VAT Health Check protects your business by identifying compliance gaps before the FTA does. Our experts systematically review your VAT records and procedures to detect errors in returns, find missing documentation for input VAT claims, and correct procedural weaknesses. This early detection and remediation strategy prevents costly penalties, demonstrates due diligence, and secures your financial standing with the tax authorities.
The most common errors we detect include incorrect VAT treatment of sales and expenses, poor documentation for input VAT recovery, and inaccurate or late VAT return filings. Our health check also scrutinises the misclassification of zero-rated versus exempt supplies and ensures your record-keeping aligns with IFRS standards. Correcting these issues proactively is key to avoiding penalties during an official audit.
Beyond simply ensuring compliance, a VAT Health Check actively improves your financial position. Our detailed review often uncovers significant amounts of unclaimed input VAT from previous periods. By identifying and recovering these funds and optimising your processes for future claims, we can directly boost your cash flow. This transforms VAT management from a cost into a strategic tool for unlocking working capital.
For most SMEs, we recommend conducting a comprehensive VAT Health Check annually to ensure ongoing compliance. Businesses undergoing significant changes—such as rapid growth, new business lines, or major system updates—or those in high-risk sectors should consider more frequent reviews. Regular assessments keep you aligned with evolving FTA regulations and provide continuous peace of mind.
