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In the United Arab Emirates, the introduction of Value Added Tax (VAT) has made the tax compliance environment more complex. Businesses must submit correct VAT returns and follow the regulations of the Federal Tax Authority (FTA). Often, despite the best efforts, businesses can be facing VAT assessments, disputes, or penalties resulting from errors or misinterpretations of the law. In those situations, it is imperative to get experienced support to manage the VAT assessment appeals process optimally. At Vigor Accounting & Taxation LLC, we offer comprehensive VAT assessment and appeals services that are designed to help firms solve their conflicting matters, and at the same time, we ensure compliance with the UAE tax laws.
A VAT assessment is an official determination made by the FTA regarding the amount of VAT payable by a business. If the FTA believes that a business has underpaid VAT, misreported its VAT returns, or failed to comply with VAT regulations, it may issue an assessment outlining the additional VAT due and any penalties associated with non-compliance.
VAT returns are the road to mistakes of such nature as faulty calculations, incomplete information, or misapplying of goods and services, which may eventually lead to a VAT assessment. Such mistakes could lead to underpayment or overpayment of the VAT, which will subsequently be corrected by FTA through the assessment process.
Companies that don't meet their VAT deadlines can find themselves in a VAT assessment situation. In situations like these, the FTA can use the available data to calculate the VAT owing and then send a penalty notice for late filings along with the condolent.
The FTA performs regular audits in which businesses are checked for VAT compliance. By the time an audit has taken place, in case there is any mismatch found, the FTA might send a VAT assessment to collect the unrecovered taxes and apply penalties.
VAT regulations are not easily understandable and, in the cases, where VAT rules are not applied correctly, it causes the staff members of the organization to make mistakes by misclassifying supplies. Misclassifying supplies or not using the correct VAT treatment can result in a VAT assessment.
When the FTA identifies an issue with a business's VAT returns or compliance, it may issue a formal VAT assessment notice. This notice outlines the reasons for the assessment, the amount of additional VAT payable, and any penalties imposed. The business is then required to respond to the assessment and either pay the amount due or challenge the assessment if it believes there has been an error.
If a business disagrees with a VAT assessment or penalty issued by the FTA, it has the option to file an appeal through the VAT appeals process. The appeals process allows businesses to challenge FTA decisions and seek a fair resolution. The key steps involved in the VAT appeals process include
Navigating the VAT assessment and appeals process can be challenging for businesses, particularly if they lack a deep understanding of VAT regulations and procedures. Some of the common challenges businesses face include
At Vigor Accounting & Taxation, we offer expert VAT assessment and appeals services to help businesses resolve disputes with the FTA and minimize the impact of VAT assessments. Our team of VAT specialists has extensive experience in UAE tax laws and provides tailored solutions to address your specific needs.
Don’t wait—schedule your free consultation today and take the first step towards transforming your vision into reality!