VAT Health Check
VAT Health Check Services in the UAE
A VAT health check is an independent review of how a business has applied UAE VAT: the returns it has filed, the invoices it issues and receives, the input tax it has recovered and the records it keeps. Its purpose is to find the errors before the Federal Tax Authority does, because an error corrected by voluntary disclosure costs a fraction of the same error found in an audit.
Reflechir’s VAT health check is carried out by the team that prepares and files VAT returns for clients across the UAE mainland and free zones, and it ends with a written report that ranks each finding by exposure and tells you exactly what to correct.
Why a health check is worth doing now
- FTA audit activity has increased: businesses are selected for review on data patterns, not size. A clean, documented VAT position turns an audit into a short exercise rather than a months-long dispute.
- Errors compound quietly: a wrong treatment applied once is usually applied every quarter thereafter. Five years of returns can carry the same mistake, and the FTA can assess the full period.
- Voluntary disclosure is cheaper than assessment: correcting an error yourself attracts a fixed penalty and a lower percentage-based penalty than the same error raised by the FTA.
- Rules have changed: e-invoicing, revised executive regulations, designated zone rules and reverse charge scope have all moved since many businesses set up their VAT processes in 2018.
- Cash is being left on the table: most health checks find recoverable input tax that was never claimed, as often as they find under-declared output tax.
What the health check reviews
- VAT returns filed: a line-by-line reconciliation of filed returns to the general ledger and to sales and purchase listings for the period reviewed, usually the last four to eight returns.
- Output tax: correct rating of supplies as standard, zero-rated, exempt or out of scope; place of supply on cross-border services; deemed supplies; bad debt relief; advances and deposits; discounts and credit notes.
- Input tax: recoverability of what was claimed, blocked items such as entertainment and certain motor vehicles, apportionment where exempt supplies exist, and the Capital Assets Scheme.
- Reverse charge and imports: reverse charge on imported services and goods, customs declaration matching, and the treatment of designated zone movements.
- Invoicing and documentation: tax invoice and credit note content, invoice timing, simplified invoices, self-billing, and record retention against the FTA's requirements.
- Registration position: whether registration, deregistration, tax group membership or the VAT profile on EmaraTax still reflect the business as it operates today.
How the engagement works
Reflechir agrees the period and scope, collects the returns, ledgers, listings, sample invoices and portal records, and completes the review within two to three weeks for a typical SME. The output is a findings report with the estimated exposure or recovery for each item, the corrective action required, and a recommendation on whether a voluntary disclosure should be filed. Where you ask us to, we prepare and file the disclosures and correct the process so the error does not recur.
The health check is a fixed fee based on the number of returns and the volume of transactions reviewed.
Why Reflechir
- Practitioner review: the check is done by people who prepare VAT returns every month and deal with FTA queries, not by a checklist.
- Exposure quantified: each finding comes with a number, so you can decide what to correct first.
- End-to-end: from review to voluntary disclosure to fixing the underlying bookkeeping, with one team accountable for the result.
If your VAT returns have never been independently reviewed, or the FTA has started asking questions, contact Reflechir Consultancy for a fixed-fee VAT health check.
Further reading: VAT administrative penalties explained · VAT return filing in Dubai · VAT compliance and optimisation