Benefits of using FTA-approved tax accounting software in the UAE
The Federal Tax Authority’s (FTA) requirement for accreditation of tax accounting software reflects the Authority’s commitment to making it easier for taxpayers to meet their VAT obligations. They also underline the importance of using accounting software to ensure that businesses meet their obligations 100%.
The main objective that APEH wants to achieve with the tax accounting software requirements is to automate all tax-related tasks for taxpayers, such as bookkeeping, payments, VAT declarations, creation of the audit file (FAF), etc.
In this article, we discuss the key benefits for businesses using accredited FTA Approved Accounting Software In Dubai. Before listing the benefits, we will get acquainted with the main features of a tax accounting software.
Key features of tax accounting software
Among the various requirements, the three most important features of a tax accounting software are the following: the system must be able to generate automatically.
VAT return file
VAT compliant tax invoices and VAT compliant credits and debits.
For more information on the requirements for tax accounting software, see “Requirements for tax accounting software for FTA”.
For the purposes of the FTA, tax accounting software is software that has built-in functionality to produce tax returns from an accounting system. Let us explain this with the help of illustrations.
Advantages of using FTA-approved software
It is clear from the example above that tax accounting software must generate tax reports from accounting records, i.e. automatically report purchases and sales in the relevant VAT reports, such as the VAT return form and the audit file. This is only possible if the tax accounting software has the appropriate functionality built-in:
Understanding the VAT rules at transaction and reporting level.
Determine the application of the tax at transaction level based on basic data (general ledger, inventory items, etc.).
Check the tax calculation based on the configuration.
Validate that the recorded transactions comply with the requirements of the VAT declaration format and the FAF (audit file) and ensure a smooth adjustment supported by the system.
Compliance solutions are just a click away – from invoicing to reporting.
Benefits of FTA-accredited tax accounting software
Tax accounting software is accredited by FTA after a thorough review of accounting software requirements. FTA-accredited accounting software gives businesses a simplified way to meet VAT requirements. Here are some of the key benefits of FTA-accredited tax accounting software.
VAT-compliant tax invoices, receipts and credit notes.
Automatic generation of the VAT accounting form (VAT 201) with minimal or no effort.
Automatic and easy generation of the FAF audit file in the structure defined by FTA.
Thanks to the system’s built-in prevention, detection and correction functions, you can be sure that your VAT returns and the generated audit file are complete and error-free.
Timely submission of VAT returns, as it is easy to prepare VAT returns and audit files.
This avoids large fines of between AED 1,000 and AED 50,000 for non-compliance with various requirements.
Accounting books and all other VAT records must kept for 5 or 10 years.
By automating all tax-related tasks, companies can reduce compliance costs.
It all sounds good! Are there other benefits of tax accounting software?
The answer is: “Yes.
Tax accounting software is an integrated software that helps businesses manage their business needs, such as bookkeeping, accounts payable, accounts receivable, invoicing, financial reporting, order management, inventory management, etc., while helping them meet VAT requirements 100%.