Definition

VAT Reconciliation is the process of matching VAT collected from customers with VAT paid to suppliers to verify the correct VAT payable or refundable to the FTA.

Key Points

• Ensures accuracy before filing VAT returns
• Identifies errors in VAT input and output entries
• Helps avoid penalties from incorrect filings
• Necessary for maintaining audit-ready VAT books

Example

Before submitting the quarterly VAT return, a business reconciles its sales VAT and purchase VAT to confirm final VAT payable.