NAQIXFTA Audit File (FAF): how to prepare it from your books
When the Federal Tax Authority audits a VAT-registered business, one of the first requests is often for an FTA Audit File, or FAF: your purchases, sales and general ledger for a period, in a standard layout. A FAF that disagrees with your VAT returns invites questions. Here is what goes into one and how to check it before it leaves the building.
What the FAF is
The FAF is a file of your accounting records in a layout the FTA defines, so that auditors can analyse them without learning your software. The FTA's FAF guide sets out the fields and the file format. Businesses whose accounting software can produce a FAF are generally expected to provide one when asked, for the period the FTA specifies.
A FAF has four tables:
| Table | Main contents |
|---|---|
| Company information | Taxable person's name in English and Arabic, TRN, tax agency and agent details, the period and the file's creation date |
| Purchase listing | Each purchase line: supplier name and TRN, invoice date and number, customs permit number for imports, description, value and VAT in AED, tax code and any foreign-currency amounts |
| Supply listing | Each sales line: customer name and TRN, invoice date and number, description, value and VAT in AED, tax code, country and any foreign-currency amounts |
| General ledger | Every ledger line for the period: date, account, description, transaction and source document, debit, credit and running balance |
Each listing ends with totals. The FTA's guide is the authority on field definitions; confirm the version it currently expects with your tax adviser.
Why the FAF has to agree with your returns
An auditor's first check is simple: does the VAT in the supply listing equal the output tax on your VAT 201 returns for the same period, and does the purchase listing support the input tax you recovered? If it does, the conversation moves on. If it does not, every difference needs an explanation, and the easiest explanations are the ones you prepared before the auditor asked.
Eight checks before you send it
- Company TRN. The company record carries the correct TRN and legal name.
- Supplier and customer TRNs. Registered suppliers and business customers have their TRNs on file. Blank TRNs on large purchases attract questions about input tax.
- Tax codes. Every line has a treatment: standard-rated, zero-rated, exempt, out of scope, reverse charge, import or blocked. Lines with no code are hard to explain.
- Foreign currency. Foreign-currency invoices show the dirham value at the rate used on the return, with the original amounts alongside.
- Supply VAT versus output tax. The supply listing's VAT total equals the output tax on the return.
- Purchase VAT versus recoverable tax. The purchase listing's VAT reconciles to recoverable input tax, with blocked VAT and non-recoverable reverse charge explained.
- A balanced ledger. Total debits equal total credits, and running balances start from the right opening balances.
- Fields your system does not hold. Fill in anything left blank, such as the Arabic name or tax agent details, with your adviser.
Common reasons a FAF and a return disagree
- A manual journal moved VAT between accounts with no invoice behind it.
- A credit note was dated in a different period from the one on the return.
- Draft or cancelled documents were included in one and not the other.
- A return was corrected by voluntary disclosure, and the FAF reflects the corrected books.
- An expense with blocked VAT was claimed on the return.
Before an audit letter arrives
An FTA request usually comes with a deadline, and the worst time to discover blank TRNs or an unbalanced ledger is after it arrives. A light routine keeps you ready. After each VAT return is filed, produce the FAF for the same period and check that its supply and purchase VAT agree with the return. Keep the file, the return and a short note of any reconciling items together. Once a year, review supplier and customer records for missing TRNs and fix them at the source. And make sure more than one person knows how to produce the file, so an audit request does not wait for one employee's return from leave.
How NAQIX prepares the FAF
In NAQIX the FAF is built from the same classified documents as the VAT 201 return, so the two agree by construction for the same period.
- The FTA Audit File page shows, for a quarter, a month or custom dates, the company information and the supply, purchase and ledger totals with line and document counts.
- A reconciliation compares supply VAT with the return's output tax and purchase VAT with recoverable tax, lists blocked VAT and non-recoverable reverse charge, and checks that the ledger balances.
- A sample of the first lines of each table and a legend of the tax codes are shown before you download.
- The download is a CSV in the FAF layout: four tables, each with its start and end markers, a header row and totals. Each download is recorded in the activity log.
- Warnings appear when the company has no TRN, or when it is not a UAE company. Fields NAQIX does not hold, such as the Arabic name, tax agent details and customs permit numbers, are left blank for you to complete.
NAQIX prepares the file for you to review; it does not send it to the FTA. The Tax & compliance and Accounting & reports pages list the features, the UAE VAT billing overview covers invoicing, and the NAQIX page for the UAE describes the local setup.