What is a FAF File? [FTA Audit File] by Profits Tax Consultants

What is a FAF File? Also known as the FTA Audit File.

The FTA has produced a very concise document on the required functions of accounting software which are needed to produce the FTA Audit files (“FAF”) for VAT and Excise Tax.

Profits Tax Consultants are a specialist VAT and Accounting practice registered with the Dubai Economic Department under Trade License No.796316 and a Bronze Partner of Xero Cloud Accounting Software.

What is accounting software?

Accounting software should be a key part of any modern growing business whether a retail store or a service provide and it is not something reserved just for large corporations.

Furthermore, looking at the FTA document on Tax Accounting Software it is evident that all companies should implement a competent software that complies with the requirements of the FTA.

Any competent accounting software should be able to produce Sales Invoice, Accounts Receivable, Accounts Payable, and General Ledger but the FTA have very specific requirements.

FTA Audit File

Also known as a FAF is something that could be requested by the FTA whilst conducting a periodic audit to ensure that tax and returns have been prepared correctly. It is strongly recommended that business check with their software vendors to make sure they are able to produce FTA Audit Files (FAF) if required otherwise it would be a very costly exercise to do on-demand.

NOTE: It may be possible that your software is able to produce date in FAF but your accounting partner failed to implement and monitor the documenting of the transactions as per the FTA Requirements and you only realise when the FAF is requested at which point it could take weeks to rectify.

Key Elements to be present in FTA Audit File (FAF) are:

  • Company Information such as Company Name and TRN No.
  • Master Files
    • Supplier File
      • Name of Supplier
      • Location of Supplier by Emirates
      • TRN No. if applicable
    • Customer File
      • Name of Customer
      • Location of Customer
      • TRN No. if applicable
    • Source Documents
      • Purchase Invoices, Imports, Credit Notes (with all details)
      • Sales Invoices, Credit Noted Issued to Customers (with all details)
      • Payments
        • Transaction Date
        • Payment Date
      • General Ledger
      • Product File

In summary your accounting software must be able to produce all or any of the above if requested by the FTA during a periodic audit of your VAT Return.

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