How Prepared Are You For A Customs Audit?
Whether you’re an importer, exporter, or you’re running any form of business, you will be required to get a customs audit at some point. This is because the UAE government enables the Federal Customs Authority to inspect all the commercial documents and customs-related matters of every business. The tax department of the UAE region has been performing customs audits on all imports and exports. As a result, it has become mandatory for every business that falls under the tax umbrella to comply with rules and regulations.
Having said that, if your business is nearing a customs audit in UAE, make sure that you connect with a reputable audit firm in Dubai to avoid any form of hassle. Here are some very crucial tips you can undertake to prepare your business for the impending customs audit.
1. Always Remain Prepared
Most businesses have a habit of waiting till the actual day of the customs audit. That is when they start collecting all the needed documents. Know that this approach can hurt you. If you choose to wait, you’ll subsequently make the tax authority wait till they have everything they need. This will prolong the entire process, which means your business will be expanding the expenses. Make sure to have a proper system in place to manage documents. This will help make everything more accessible and easy.
2. Collect All The Necessary Accounts For Imports and Exports
Cash, Accounts payables, accounts receivables, accrued expenses, inventory, and other significant accounts should be prepared and ready before the customs audit takes place. Most of the adjustments that aren’t covered in the customs audit include reconciliations that aren’t prepared. Moreover, it is highly important to ensure that you support all-important reconciling items.
3. Reconcile Adjustments In Contracts and Agreements
Another very important thing to do is to reconcile all changes to agreements to outstanding agreements that are related to tax authorities. The reconciliation process helps in ensuring that all changes made in the accounts during the fiscal year are documented, and written correctly in the books of the company.
4. Make A File Of All The Agreements and Amendments
Make sure all agreements are collected and included in the existing agreements of the business that were entered in a year. This includes debt agreements, leasing agreements, importing agreements, operating agreements, and more. Tax authorities go through all these agreements while their auditing work is in process. They use all these documents to prepare footnotes for all financial statements.
5. Identify All Important Changes That Are To Be Made
As a business owner, it is your responsibility to identify and communicate all the changes you wish to be made, to the tax officers. These can be any changes; ranging from adjustments in the approach your business uses to account for the previous fiscal year customs audit, to considering any new changes that can be incorporated for the customs audit to run smoothly. There’s a high possibility that your business might run into big transactions at any point in the year. These transactions include changing accounting principles, adopting new accounting pronouncements, or buying from other countries, make sure you tell all the changes to the tax office immediately.
6. Highlight All The Queries In Audit
The custom audit process usually involved the tax officers sending requests for certain things to be checked. This allows you to focus on the important details of the custom reports. Once you know these important areas, you’ll know exactly how to prepare yourself with all the answers that will be asked by the auditors.
7. Seek Help From Experts
Tax authorities will employ experts and highly skilled professionals on the task. All these numbers and accounting matters are their bread and butter, and therefore you can expect very tough questions to come up. Know that these experts know how to extract all the needed information from a taxpayer. If you choose to deal with the entire process on your own, you’ll probably make mistakes. This is why it is crucial to seek the help and guidance of experts.
Customs audit in UAE can be a very stressful experience for you and your employees. However, if you choose to connect with a renowned audit firm in UAE, you’ll be better prepared before the tax authorities visit your place. Get in touch with BSA Auditing & Consultancy to have experienced, seasoned professionals make the entire process easy for all the parties involved.
