An FTA audit is a check by the Federal Tax Authority that the VAT, excise tax or corporate tax you declared matches your records. It does not mean you did something wrong. Many audits start from a routine risk check.
Under the Executive Regulation of the Tax Procedures Law (Cabinet Decision No. 74 of 2023), the FTA must notify you at least 10 business days before a tax audit, and it must tell you the result within 10 business days after the audit ends. What happens in between depends on what you can show. A business with reconciled records and organised invoices answers in days. A business that starts hunting for invoices after the notice arrives loses time it does not have.
This guide covers what triggers an audit, how the process runs, what to keep ready, the penalties that apply since 14 April 2026, and what to do the day a notice lands.
Key Takeaways
- Notice comes first. The FTA gives at least 10 business days before a tax audit, through EmaraTax, email or post.
- Records decide the outcome. Returns that tie to your ledger, valid tax invoices and a clean audit folder matter more than any explanation.
- Fix errors early. A voluntary disclosure before a notice costs 1% a month. After a notice, a fixed 15% penalty is added.
- Look-back is long. The FTA can review five years, and up to 15 years in evasion or non-registration cases.
- You can disagree. You have 40 business days to ask for a review of an assessment.
What Is an FTA Audit?
The FTA audits three taxes: VAT, excise tax and corporate tax. The legal base is Federal Decree-Law No. 28 of 2022 on Tax Procedures, and the day-to-day rules sit in Cabinet Decision No. 74 of 2023. The auditor looks at your returns and the records behind them: invoices, ledgers, bank statements, contracts and customs documents.
Two points cause confusion:
- An FTA audit is not a statutory audit. A statutory audit is done by a licensed audit firm and checks your financial statements. An FTA audit checks your tax. You can need one without the other. See is audit mandatory in the UAE and our external audit services.
- A notice is not an accusation. It lists the taxes and tax periods under review and the documents requested. Treat it as a deadline, not a verdict.
Types of FTA Audit
| Type | How it works | What you do |
|---|---|---|
| Desk audit | The FTA reviews documents remotely, usually through your EmaraTax account | Upload the requested records by the deadline |
| Field audit | Auditors visit your office, the FTA office, or wherever you keep your records | Prepare the premises and a person who can answer questions |
| Refund audit | The FTA checks a refund claim before paying it | Show the invoices and workings behind the claim. See VAT refund deadlines |
What Triggers an FTA Audit?
The FTA does not publish how it chooses businesses, and it says selection can be risk-based. These are the patterns advisers see most often:
- Large or frequent VAT refund claims, especially close to a filing deadline.
- Numbers that do not match. VAT turnover against corporate tax revenue, or against customs and bank records.
- Late filings, late payments or repeated amendments.
- Weak support for input tax. Claims without a valid tax invoice. See VAT invoice requirements.
- Margins far below others in your sector.
- Related-party deals with no records. See transfer pricing.
- Free zone companies claiming 0% without proof. See Qualifying Free Zone Person rules.
- Sectors that draw attention, such as real estate and e-commerce. See VAT on real estate and VAT on e-commerce sales.
You cannot control who gets selected. You can control whether your records hold up.
What the FTA Checks
In a VAT audit
- Output VAT: are all taxable sales in your returns, at the right rate?
- Input VAT: does every claim have a valid tax invoice, and is the cost business-related? See input tax credit.
- Zero-rated supplies: do you hold export proof? See VAT on exports.
- Reverse charge entries on imported services. See the reverse charge mechanism.
- Whether your returns agree with your ledger and bank statements.
In a corporate tax audit
- Taxable income and whether it ties to your financial statements.
- Expenses you deducted. See deductible and non-deductible expenses.
- Related-party transactions and their documentation.
- Free zone and relief claims. See Small Business Relief.
- Whether you filed on time. See the corporate tax filing deadline.
How an FTA Audit Works, Step by Step
| Step | What happens | Time frame |
|---|---|---|
| 1. Notice | The FTA tells you the taxes, periods and documents under review | At least 10 business days before the audit |
| 2. Document request | You send what was asked, in the form and place set in the notice | Deadline is written in the notice |
| 3. Review and queries | Desk review or site visit, with follow-up questions | No legal maximum. Weeks for a simple case, months for a complex one |
| 4. Result | The FTA notifies you of the audit result | Within 10 business days of the audit ending |
| 5. Your access to the file | You can apply for the documents the assessment relied on | Apply within 20 business days. The FTA has 10 business days to supply them |
| 6. Assessment | If tax is underpaid, the FTA issues a tax assessment with penalties | After the audit |
| 7. Disagree? | Ask for a review or reconsideration | Within 40 business days |
The regulation does not set a number of days for answering a document request. The notice does, and each notice can differ. Read it the day it arrives.
Documents to Keep Ready
| Area | What auditors usually ask for |
|---|---|
| VAT | Filed returns and payment proof, sales and purchase tax invoices, credit and debit notes, import and export documents, reverse charge workings, ledger and trial balance, bank statements and reconciliations, contracts |
| Corporate tax | Filed return and workings, financial statements, expense support, related-party contracts and transfer pricing files, free zone eligibility evidence |
| General | Trade licence, ownership documents, payroll records, and audited financial statements where the law requires them |
How long to keep them. Keep VAT records for five years (15 years for real estate) and corporate tax records for seven years. If a refund claim is still pending, add two years (Cabinet Decision No. 17 of 2026). A tidy chart of accounts makes retrieval much faster, and our VAT record keeping services cover the rest.
Penalties After an Audit (From 14 April 2026)
Cabinet Decision No. 129 of 2025 reset several penalties from 14 April 2026. These are the ones that most often appear in audit outcomes:
| Issue | Penalty |
|---|---|
| Voluntary disclosure before an audit notice | 1% a month on the tax difference until you submit |
| Error found or disclosed after an audit notice | Fixed 15% of the tax difference (it was 50%), plus the 1% monthly charge on a disclosure |
| Late payment of tax | 14% a year, charged monthly (it replaced the old 2% and 4% steps) |
| Incorrect tax return | AED 500 first time, AED 2,000 if repeated |
| Record-keeping failure | AED 10,000, or AED 20,000 if repeated within 24 months |
Confirm the current figures on the FTA website (tax.gov.ae) before you act, as amounts and conditions can change. For the full picture, read our guides on VAT penalties in 2026 and the voluntary disclosure penalty.
Fix Errors Before They Find Them: Voluntary Disclosure
If you spot a mistake in a filed return before any audit notice, correct it through a voluntary disclosure. It is cheaper than waiting. For an incorrect refund claim above AED 10,000, the disclosure is due within 20 business days of becoming aware of the error. Smaller amounts, AED 10,000 or less, can be corrected in your next return where that is possible. Our guide to VAT voluntary disclosure walks through the steps.
How to Prepare for an FTA Audit
- Tie every VAT return to your ledger. A difference between the two is the first question an auditor asks. Monthly account reconciliation stops differences building up.
- Check the paper behind every input tax claim. Each needs a valid tax invoice with the supplier name, TRN, date and VAT amount.
- Compare VAT turnover with corporate tax revenue. They will not always match, but you should be able to explain every gap.
- Close record gaps. If months of bookkeeping are missing, our backlog accounting team can bring them up to date.
- Keep one audit folder. Returns, workings, invoices and contracts, named by tax period, stored digitally.
- Check your EmaraTax contact details. Notices go to the email and phone on file. Make sure someone reads them.
- Run a mock audit. A VAT compliance review does what the FTA would do, before the FTA does it.
What to Do When the Notice Arrives
- Read the scope and dates. Note the taxes, the periods and the deadline.
- Put the deadline in your calendar and work back from it.
- Send what is asked, in the form and place the notice names. Do not hand over unrelated files.
- Keep a copy and a log of everything you submit and when.
- Ask for more time in writing, before the deadline, if you need it.
- Get advice early. You can appoint a representative, ask to see the auditor’s ID, and ask for a copy of the notice.
If You Disagree With the Result
If the FTA issues a tax assessment you do not accept, you can ask for a review or reconsideration within 40 business days of receiving it. If that fails, the next step is the Tax Disputes Resolution Committee, and larger disputes can go to the courts. You may need to pay the disputed amount before some steps, so check the rules before you file.
Mistakes That Make Audits Harder
- Sending documents late, or not answering questions in writing.
- Claiming input VAT without a valid tax invoice.
- Letting several returns pile up with unreconciled differences.
- Sending a large dump of files instead of what was asked.
- Ignoring the notice because it arrived at an email nobody reads.
Get Audit-Ready With JASM
JASM Accounting can review your VAT and corporate tax records, close the gaps and prepare the audit folder before a notice arrives. See our VAT compliance review, VAT audit support and accounting supervision, or request a quote or message us on WhatsApp.
Frequently Asked Questions
What is an FTA audit?
An FTA audit is a check by the Federal Tax Authority that the VAT, excise tax or corporate tax you declared matches your records. The FTA reviews your returns, invoices, ledgers and bank statements. Selection can be routine and risk-based, so receiving a notice does not mean you did anything wrong.
How much notice does the FTA give before an audit?
The Executive Regulation of the Tax Procedures Law (Cabinet Decision No. 74 of 2023) says the FTA must notify you at least 10 business days before a tax audit. The notice names the taxes and periods under review. The deadline to send documents is written in the notice itself.
How long does an FTA audit take?
The law sets no maximum duration. A simple desk review can take a few weeks, and a complex field audit can take several months. Once the audit ends, the FTA must tell you the result within 10 business days.
What documents does the FTA ask for in an audit?
Usually your tax returns and workings, sales and purchase tax invoices, credit notes, ledgers, trial balance, bank statements and reconciliations, contracts, and import or export papers. For corporate tax it may also ask for financial statements and related-party records.
How far back can the FTA audit?
Generally five years from the end of the tax period. For tax evasion, or where a business failed to register, the period can reach 15 years. This is why records should be kept well beyond the filing date.
Can the FTA audit a free zone company?
Yes. Free zone companies are subject to the same tax procedures as mainland companies. A Qualifying Free Zone Person that claims the 0% rate should be ready to show it meets every condition, including audited financial statements.
What happens if I cannot send the documents by the deadline?
Contact the FTA in writing before the deadline and explain why. Do not wait until the deadline has passed. Missed deadlines can lead to penalties and to an assessment based on the information the FTA already has.
Can I challenge the result of an FTA audit?
Yes. If the FTA issues a tax assessment you disagree with, you can ask for a review or reconsideration within 40 business days of receiving it. Further steps go to the Tax Disputes Resolution Committee. Check the deadlines carefully, because they are strict.
Last updated 13 November 2026. This article is general information, not tax advice for your situation. Sources: Federal Decree-Law No. 28 of 2022; Cabinet Decision No. 74 of 2023 (Articles 16 to 19); Cabinet Decision No. 17 of 2026; Cabinet Decision No. 129 of 2025. Rules, penalties and deadlines change, so confirm the current position with the Federal Tax Authority (tax.gov.ae) or a qualified adviser. JASM Accounting & Bookkeeping LLC is a private firm and is not affiliated with any government authority.
