FTA tax audits in the UAE

What an FTA tax audit is

Article 16 of the Tax Procedures Law (Federal Decree-Law No. 28 of 2022) gives the Federal Tax Authority the right to audit any person to check its compliance with the tax laws. The same procedure applies to VAT, excise and Corporate Tax. The law defines a tax audit widely: any procedure the FTA undertakes to inspect a person’s commercial records, information, data or goods to see whether it has met its obligations.

On that definition, a visit to inspect stock or premises, which the FTA’s own announcements call a field inspection, is an audit as much as a review of returns. This page describes the law as amended from 1 January 2026 by Federal Decree-Law No. 17 of 2025, and its Executive Regulation (Cabinet Decision No. 74 of 2023) as amended from 1 April 2026 by Cabinet Decision No. 17 of 2026. The areas a Corporate Tax audit tests are on our page on Corporate Tax audits.

How the FTA decides whom to audit

Neither the law nor its Executive Regulation lists audit triggers. Article 15 of the Executive Regulation instead sets out four things the FTA must consider before deciding to audit:

• whether the audit is necessary to protect the integrity of the tax system
• the responsibility of the person, or anyone associated with it, to comply with the law
• the tax revenue expected to be collected
• the compliance and administrative burden of the audit, on the business and on the FTA

A business audited before can be audited again, with the earlier results and any new information taken into account. The decision to audit is at the FTA’s sole discretion and cannot be objected to or challenged; what can be challenged is the outcome. The law does tie two events to the audit window: a voluntary disclosure made in the fifth year after a tax period, and a refund application made late in the limitation period. Each gives the FTA extra time.

The audit notice

The FTA must notify a business of a tax audit at least 10 business days before the audit. A business day is any day except a weekend or an official federal government holiday. The day of notification is not counted, and a period that ends on a day that is not a business day runs on to the next one.

The Executive Regulation requires the notice to set out the possible consequences of obstructing the auditor, and the business is entitled to a copy of it. Where the usual means of notification would be ineffective, the FTA can post the notice at the premises. Read it for what it covers: which tax, which periods, where the audit will take place, and anything it asks to have ready.

At the FTA’s office or at the business

An audit can take place at the FTA’s own premises, at the business’s place of business, or anywhere else it trades, stores goods or keeps records. Where it is held outside the FTA’s premises, the business has the right to attend. Audits take place in the FTA’s official working hours, and outside them only exceptionally, by decision of the Director General.

On site, the auditor may inspect the premises and the documents and assets there, data and records stored electronically, and the accounting systems the business uses. Whoever occupies or controls the premises must give the auditor the facilities needed.

When the FTA can enter without notice

As an exception, an auditor may enter without prior notice any place where the business trades, stores goods or keeps records, and close it temporarily for up to 72 hours, in any of three cases:

• the FTA has serious grounds to believe the business is participating or involved in tax evasion
• it has serious grounds to believe that not closing the place would hinder the audit
• a business that was given notice tries to stop the auditor entering

In every case the auditor needs the prior written consent of the Director General, or the person acting for him, and a permit from the Public Prosecution as well if the place is a residence. The place must reopen when the 72 hours expire unless, before they do, the FTA obtains a Public Prosecution permit to extend the closure for a similar period. The business is told in writing when the audit begins, through the occupier or whoever appears to be in charge, and an auditor acting on a permit must show it, with the FTA’s approval and proof of identity, if asked.

Where the FTA suspects evasion, see our page on tax evasion investigations.

What auditors can take, and the business’s rights

Under Article 17 of the Tax Procedures Law, an auditor can obtain original records or copies, take samples of goods, equipment or other assets, and seize documents and assets. The FTA can also require information or documents about the business or about another person, within the period and in the form it specifies.

If anything is seized, the FTA must provide a record within 10 business days, or any other period it specifies, giving the purpose of the seizure, a description, where and how the items are stored, and how long it expects to keep them. Since 1 April 2026 the FTA can extend that expected period, notifying the business where possible. Perishable or hazardous goods can be sold at public auction or disposed of, and an owner who wants seized goods back must notify the FTA within 5 business days of being told of the seizure, with proof of ownership and of payment of the tax, penalties and costs.

Article 21 gives the business the right:

• to ask to see the auditor’s job identification card
• to a copy of the audit notice
• to attend an audit held outside the FTA’s premises
• to copies of original paper or digital documents seized or obtained during the audit

The Executive Regulation qualifies the last right: the FTA can refuse access where it would prejudice the audit, another person’s audit, an investigation or criminal proceedings.

Conflicts of interest

Article 45 prohibits any FTA employee from performing or taking part in a tax procedure relating to a person where:

• the employee and the individual are related up to the fourth degree
• there is a common interest between the employee and the person, or between any of their relatives up to the third degree
• a personal or financial interest, or any other relationship, affects the employee’s independent decision
• the Director General decides the employee should not act, for any other conflict

If a business has reason to think one of these applies, it is a point to raise with the FTA in writing, early.

The first days after an audit notice

1. Diary the date, and any date the notice gives for producing documents.
2. Read the scope. The tax and the periods named decide which records matter, and which need reconciling first.
3. Gather and reconcile the records. For each period, the returns should reconcile to the ledgers, the bank statements and the invoices behind them. Electronic records and the accounting system can be inspected too, so access needs planning.
4. Decide who deals with the auditor. The business, its tax agent and its legal representative each have a duty to facilitate the audit. A business can deal with the FTA itself or appoint a registered tax agent to act for it.
5. Keep everything as it is. Deliberately concealing or destroying documents the business is required to keep is a criminal offence.
6. Face the disclosure question. If the work on the records turns up an error that underpaid tax, the question is whether to disclose it now.

A voluntary disclosure made before an audit is notified costs 1% of the tax difference for each month or part month since the return was due. Once the FTA has notified an audit, a fixed 15% of the tax difference is added. A disclosure made after the notice still attracts the 15%, but the monthly 1% stops on the date of the disclosure instead of running on to the date of the assessment. That is the Corporate Tax position under Cabinet Decision No. 75 of 2023, and it has applied to VAT and excise since 14 April 2026 under Cabinet Decision No. 129 of 2025. Our page on voluntary disclosures explains the 20-business-day rule and how a disclosure is prepared.

The audit clock

Most of the time limits in an audit bind the FTA. Three bind the business: asking for the documents behind an assessment, paying the tax assessed, and challenging it.

The law sets no fixed length for the audit itself, but an audit notified within the five-year limit that runs beyond it must be completed, or the assessment issued, within four years of the notice.

The 20 business days to ask for the documents behind the assessment are worth using. The FTA need not hand over its internal correspondence or decisions, other taxpayers’ confidential information, or documents the business already holds, but the rest of what it relied on can be requested.

Assessments and estimated assessments

Under Article 23, the FTA issues a tax assessment, notified within 10 business days of issue, where a business:

• failed to apply for registration in time
• failed to file a return in time
• failed to pay the tax shown on a return in time
• filed an incorrect return
• failed to account for tax on behalf of another person when obliged to
• underpaid tax through evasion, its own or evasion it was involved in

It can also assess in any other case the tax law provides for. Where it cannot determine the actual tax due, or whether a return is correct, it can issue an estimated assessment. If new information affecting that estimate comes to light, the FTA must amend it and notify the amendment within 10 business days. The better the records, the less room there is for estimation.

The Executive Regulation sets the minimum contents of an assessment, including a summary of the tax reported and the adjustments made, the reasons for the assessment, and the net tax due or refundable. Once notified, the tax is a payable debt to the FTA.

Penalties come in a separate administrative penalties assessment, notified within 5 business days and payable from notification. No administrative penalty may exceed twice the tax to which the assessment relates, and a penalty never removes the duty to pay the tax.

Records: how long, in what form, in what language

Unless the law for a particular tax says otherwise, the Executive Regulation requires records to be kept for five years after the end of the tax period they relate to, and real estate records for longer. Corporate Tax does say otherwise: seven years, under Article 56 of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022). The period is then extended:

• by four years where the business is subject to an ongoing audit
• by four years where the FTA notifies an audit before the standard period expires
• by four years, or until the dispute is finally settled if later, where there is a dispute with the FTA
• by one year from the date of a voluntary disclosure made in the fifth year after the tax period
• since 1 April 2026, by two years where a refund application is awaiting the FTA’s decision

Records can be kept as originals, or as copies identical to the originals, provided a readable copy can be produced when the FTA asks. The law’s starting point is Arabic. The FTA may accept documents in English or another language, but it can require an approved Arabic translation, at the business’s cost and within the period it sets.

The FTA does not need an audit to ask for records. The Executive Regulation lets it request accounting records, commercial books and other information from any person to carry out its duties. Where no period is set for doing something, the law requires the FTA to allow between 5 and 40 business days, which it can extend.

Two VAT developments are worth knowing. From 1 October 2026, FTA Decision No. 13 of 2026 requires businesses to verify their suppliers and the supplies they receive before deducting input tax, and to document those checks so the FTA can test them. It applies Article 54 (bis) of the VAT Law (Federal Decree-Law No. 8 of 2017), on input tax and supplies connected with tax evasion. And mandatory e-invoicing, under which invoice data is reported to the FTA through accredited service providers, starts on 1 January 2027 for businesses with revenue of AED 50 million or more and on 1 July 2027 for most others.

How far back the FTA can go

The time limits are in Article 46 of the Tax Procedures Law, as amended from 1 January 2026.

A transitional rule gives the FTA the same two years for certain refund applications made in the year from 1 January 2026. The limitation period can be interrupted on the grounds in the Civil Transactions Law. Once tax or a penalty has been notified, it does not lapse with time.

Penalties for not cooperating

The business, its tax agent and its legal representative must facilitate and assist the auditor. Failing to do so carries an administrative penalty of AED 20,000, payable by whichever of them failed, from its own funds. The same amount applies to Corporate Tax and, since 14 April 2026, to VAT and excise. Related penalties:

• failing to keep the required records: AED 10,000, or AED 20,000 for a repeat within 24 months
• failing to provide data, records and documents in Arabic when asked: AED 5,000

For a business that has been given notice, trying to stop the auditor entering is itself one of the grounds for entry without notice. Deliberately preventing or hindering FTA employees in their duties, deliberately giving false information, and deliberately concealing or destroying documents are criminal offences under Article 25, punishable by imprisonment, a fine of up to AED 1,000,000, or both. Our page on FTA penalties covers the administrative regime in full.

After the audit

If the results lead to an assessment or penalty the business disagrees with, it can ask the FTA to review the assessment, or to reconsider its decision, within 40 business days of notification. After reconsideration comes an objection to the Tax Disputes Resolution Committee, which will not hear one until the disputed tax is paid, and, where the tax and penalties exceed AED 100,000, the courts. Our page on reconsideration and the TDRC sets out each step. Penalty waivers and instalments are a separate application.

How we help

• Read the audit notice and confirm the tax, the periods and the dates that matter
• Reconcile the records to the returns for the periods named, before the auditor does
• Find any error early enough for the disclosure decision to be a real one
• Help the business prepare for the auditor’s requests and questions
• Read the audit results, and draft the request for the documents behind any assessment
• Test the assessment against the records, the law and the time limits
• Draft the disclosure or the reconsideration request

Further reading

• UAE tax audits and disputes: an overview
• Corporate Tax audits
• Voluntary disclosures to the FTA
• FTA penalties, waivers and instalments
• Reconsideration, the TDRC and the courts
• Tax evasion investigations