Benefits of using FTA-certified tax accounting software in the UAE

The Federal Tax Administration's (FTA) requirement for certification of tax accounting software truly reflects the FTA's commitment to simplifying VAT compliance for taxpayers. It also highlights the importance of using accounting software to achieve 100% compliance for businesses.

The main objective that the FTA wants to achieve by setting requirements for tax accounting software is to automate all taxpayers' obligations such as accounting, payments, VAT returns, FAF (audit file) production, etc.

In this article, we will look at the main benefits for businesses of using certified FTA Approved Accounting Software In Dubai. Before we start listing the advantages, let us try to find out what are the main features that should be included in tax accounting software.

Key features of tax accounting software

Among the other requirements that the accounting software must fulfill, there are three main features: the system must be able to automatically generate

AFC control files (FAF)

the FAF must be able to produce a FAF file (FAF must be able to produce a VAT return; generate FAF documents; generate VAT return documentation).

VAT-compliant tax invoices and credit invoices

For more information on the requirements for tax accounting software, read the article "Requirements for AFC tax accounting software".

In the context of the FTA, tax accounting software is software with an integrated function for generating tax reports from accounting documents. We will understand this with the help of a diagram.

Benefits of using FTA software

As can be seen from the description above, accounting software must generate tax reports from accounting data, i.e. purchase and sales data must be automatically reflected in the relevant VAT returns, such as VAT returns and control documents. This is only possible if the tax accounting software has the following features built-in.

Understanding VAT requirements at the transaction and reporting level

Determination of tax applicability at transaction level based on key inputs from accounts (general ledgers, inventory data, etc.).

Validation of the tax calculation based on the formulation made

Check that the transaction records comply with the requirements of the VAT return and the FAF (control file) format and allow smooth adjustments to be made using the system.

Tally Prime

One-click compliance solution from invoicing to archiving

Benefits of FTA-approved tax return software

Tax accounting software is approved by the FTA after a thorough review of the accounting software requirements. Once approved by the FTA, the accounting software will provide your business with simplified VAT compliance. Here are some of the key benefits of FTA-approved tax accounting software.

Create VAT-compliant tax invoices, and credit and debit note.

Automatically generate VAT returns (VAT 201) without much effort

Automatic generation of FAF’s (control documents) according to the FTA structure without any special effort.

With the system's built-in prevention, detection and correction functions, you can be sure that your VAT returns and audit files will be complete and error-free.

Submit your VAT returns on time as VAT returns and control files can be generated effortlessly.

This way you will avoid the hefty penalties of between 1000 and 50 000 Australian dollars that you face if you do not comply with the various compliance requirements.

Keep your books and all other VAT documents for 5 or 10 years (depending on the circumstances).

Tax compliance automation helps businesses reduce compliance costs.

Having all VAT reports ready (automated) at all times creates a platform that facilitates cooperation between you and the tax authority in case of audits, etc.

With all these advantages, it gives business owners peace of mind and allows them to spend more time on business development instead of compliance.

It all sounds great! Are there any other advantages of tax filing software?

The answer is "yes".

Tax accounting software is a comprehensive software that helps businesses manage their business needs such as accounting, accounts payable, accounts receivable, invoices, billing, invoicing, financial reporting, order management, inventory management, and much more while helping them ensure 100% VAT compliance.