VAT Health Check & Compliance Review

It is a structured review of one or more prior VAT periods in which PNPC reconciles your filed VAT201 returns, box by box, against your general ledger, tax invoices, bank statements, and customs records — testing the same things an FTA desk review or field audit would test, but before the FTA does it. The output is a findings report ranking any issues by materiality, with a recommended remediation path for each.

No. The health check itself does not change or re-submit any past return — it is a diagnostic exercise with a findings report as its output. Where the review identifies a material error, the recommended next step is usually a separate, formal voluntary disclosure (Form VAT211) against the specific affected period, which is a distinct filing PNPC prepares and submits once the finding is confirmed.

It depends on the trigger. A business onboarding with a new provider or preparing for a transaction typically benefits from a fuller multi-year look-back, since recurring errors — like an unreported reverse charge on a recurring subscription — often span several periods identically. A narrower, specific concern may only need the periods where that concern is live. We agree scope with each client at the outset based on the reason for the review.

Reverse charge on imported services (overseas SaaS, consulting fees, intercompany charges) never declared because no UAE VAT appeared on the original invoice; input tax claimed on blocked categories such as certain entertainment expenses; full input tax recovery claimed despite the business having exempt income requiring partial-exemption apportionment; a customs import box that has never been reconciled against actual customs declarations; and a gap between VAT-declared turnover and Corporate Tax-declared revenue that was never explained.

We quantify the finding and check it against the FTA's disclosure threshold. Where it is at or above the threshold, we prepare and file a voluntary disclosure (Form VAT211) against the correct affected period. Where it is below the threshold, the correction is typically made through the normal in-return adjustment mechanism in a subsequent filing, properly documented. Either way, filing proactively — before the FTA identifies the same error independently — materially reduces penalty exposure.

No — the health check itself is a private, internal diagnostic engagement with no submission to or notification of the FTA. It only results in FTA contact if the findings warrant a voluntary disclosure, which is a deliberate, controlled filing PNPC prepares — a materially better outcome than the FTA identifying the same issue independently through its own audit selection process.

It should be. A buyer's or investor's own tax due diligence will test exactly the same things — reverse-charge completeness, input recovery correctness, partial-exemption application, and turnover reconciliation to Corporate Tax — and an unresolved issue discovered independently late in a transaction can affect valuation or terms. Running the review proactively, on your own timeline, lets you remediate before it becomes a deal issue.

Strongly advisable. Taking on ongoing VAT compliance responsibility for a filing history you did not prepare carries real risk if that history contains embedded errors you inherit unknowingly. A health check at the point of transition establishes a clean, tested baseline and identifies anything that needs correcting before you take over the periodic filing cycle.

Yes — this is one of the standard testing areas. If your business has any exempt income (residential rent, interest income, certain financial services activity) alongside taxable supplies, we test whether input tax has actually been apportioned under the FTA's partial-exemption rules, rather than claimed in full. Claiming 100% recovery when any exempt income exists is one of the clearest and most common errors an FTA review isolates.

Box 6 of the VAT201 is pre-populated by the FTA using import declarations linked to the registrant's TRN at the point of customs clearance. If a customs broker clears goods under the wrong TRN, a different entity's TRN, or without linking any TRN, that box can understate or omit imports that physically arrived — a mismatch the FTA can identify entirely from its own data, without contacting the business first.

We identify every recurring cross-border cost category in the ledger — software subscriptions, consulting and professional fees paid to overseas advisors, intercompany management or licence charges from a foreign parent — and test whether each was correctly self-accounted for through the reverse charge (output tax in box 3, corresponding recoverable input tax in box 10, where recoverable). This is deliberately exhaustive because the omission is rarely a one-off; it is usually every instance of a particular recurring cost type.

Yes — this cross-check is a standard part of the review. Declared VAT turnover across the periods in scope is reconciled to the revenue reported in the corresponding UAE Corporate Tax return(s) under Federal Decree-Law No. 47 of 2022, with legitimate reconciling items (timing differences, zero-rated exports, out-of-scope income) documented explicitly. An unexplained gap between the two is a cross-check the FTA itself can run without any additional information from you.

A standard multi-period review typically runs roughly four to six weeks from complete records intake to a final findings report, depending on transaction volume and the number of periods and entities in scope. Where there is time pressure — an imminent FTA deadline, for example — we prioritise the highest-risk areas first and can move faster on those specific items.

It can, though the priority shifts. If you are already in an active FTA audit with live, time-bound information requests, our immediate focus is preparing and managing the direct response to those requests. A broader health check across periods outside the audit's current scope can still run in parallel, but it should not distract from the FTA's active timeline.

Full underlying records for the periods in scope: filed VAT201 returns, sales and purchase registers, general ledger detail, tax invoices and credit notes, bank statements, customs import documentation, and any prior FTA correspondence or disclosures. We also request the corresponding Corporate Tax return for the turnover cross-check. Summarised management accounts alone are not sufficient for transaction-level testing.

Both. Where testing finds no material issue in a given area, that is stated explicitly in the findings report — a clean result on partial exemption testing, for instance, is itself a useful, documented finding, particularly if the report is later shared with a lender, investor, or acquirer. The report is not written to only flag problems; it documents what was tested and what was found, area by area.

It can cover a VAT Group's consolidated position — testing the representative member's consolidated VAT201 filings, and where relevant, whether intra-group supplies have been correctly disregarded and whether the group-level partial-exemption apportionment (where any member has exempt supplies) has been applied correctly. The scope is agreed at the outset based on the client's actual registration structure.

PNPC scopes and quotes a health check as a fixed-fee engagement based on the number of periods and entities in scope, transaction volume, and the complexity of the supply mix (domestic-only versus cross-border, single entity versus group, taxable-only versus mixed taxable/exempt). The scope and fee are confirmed in writing before work begins, and any follow-on work — such as preparing a voluntary disclosure the review recommends — is scoped separately once findings are known.

We walk through the underlying testing and the specific legal basis for each finding — the relevant provision of the VAT law or Executive Regulations, and how the transaction was treated versus how it should have been treated — so the client can independently verify the conclusion before deciding on remediation. A health check finding is a professional assessment, not an automatic filing; the client makes the final call on how to proceed, informed by that assessment.

Yes — the review is not only about overstated recovery or missed reverse charges; it also identifies under-claimed positions, such as bad debt relief that was never applied on written-off receivables, or input tax that was conservatively excluded when it was in fact recoverable. A thorough review corrects the position in both directions, not just downward.

Yes — many clients commission a health check purely as periodic assurance, particularly ahead of a year-end, a board reporting cycle, or simply as good governance practice for a business whose transaction volume or structure has grown since VAT processes were originally set up. Confirming a clean position is a genuinely useful, low-anxiety outcome, and it is far cheaper than discovering an issue during an actual FTA audit.

There is real value in an independent set of eyes testing the same returns your regular preparer produced — a self-review by the same team that filed the returns can carry the same blind spots that led to the original error. PNPC's Dubai practice runs health checks both for our own ongoing compliance clients as periodic assurance, and for businesses whose returns are prepared elsewhere, precisely because independence sharpens what the review actually catches.