What Happens During an FTA Audit?

Working through it

An FTA audit is the authority’s formal examination of whether your tax returns are correct, whether you have reported and paid the right amount. It is a defined procedure, and knowing its shape removes much of the anxiety, because the process is far more orderly than the word ‘audit’ can suggest.

It generally begins with a notification that an audit is to take place, which sets out its scope and what is required. The FTA then issues requests for records and information, returns, ledgers, invoices, contracts, bank records, whatever is relevant to the taxes and periods under review. The examination itself involves the auditors reviewing that material, testing your figures against the evidence, and reconciling your returns to your records and to any third-party data. This may be conducted remotely, through document exchange, or with a visit to your premises, depending on the case. Through it, the auditors raise questions and requests for clarification, which you (or your representative) answer. Finally, the FTA reaches its conclusions and issues an assessment or findings, confirming the returns, or adjusting them with additional tax and any penalties, or occasionally finding in your favour.

Throughout, you have both obligations and rights. You must cooperate, provide the information requested, and give access as required. But you also have rights: to be informed of the scope, to a fair process, to respond to findings, and, critically, to challenge an assessment you disagree with through reconsideration and appeal. Understanding that an audit is a bounded procedure with defined stages and rights, rather than an unlimited inquiry, is the foundation of engaging with it well.

The stages of an audit

While every audit differs in detail, most follow a recognisable sequence:

1. Notification: the FTA informs you of the audit, its scope, and the periods and taxes under review
2. Information request: you are asked to provide records and information relevant to the examination
3. Examination: the auditors review your returns and supporting evidence, reconciling and testing figures, remotely or on site
4. Queries and clarification: the FTA raises questions and requests for further evidence, which you answer
5. Findings and assessment: the FTA issues its conclusions: confirmation, an assessment of additional tax and penalties, or a refund
6. Response and challenge: you can respond to the findings and, if you disagree, pursue reconsideration and appeal

The stage most within your control is the examination and query phase, how completely and promptly you provide records and answer questions. Complete records and fast, competent responses shorten the audit and reduce the scope for adverse findings.

How to engage well during an audit

How you conduct yourself during an audit materially affects both its length and its outcome, and a few principles consistently help.

Respond completely and promptly. An audit that idles between slow replies stretches out and signals disorganisation; one where requests are met quickly and fully proceeds smoothly and builds the auditors’ confidence in your records. Answer what is asked, accurately and honestly, without volunteering unrelated information that opens new questions; being cooperative is not the same as being expansive. Keep everything documented: provide records in an organised, traceable form so the auditors can verify figures without difficulty. And where a position is complex or a finding looks likely to be adverse, this is exactly where competent representation earns its place, because how a position is presented and defended affects how it is assessed.

The overarching principle is to treat the audit as a professional process to be managed rather than a confrontation to be survived. Auditors are verifying, not attacking; a business that engages professionally (organised, responsive, honest, and represented where it matters) generally finds the process resolves on the merits of its records. The businesses that come off worst are usually those that respond slowly, provide disorganised or incomplete records, become defensive or evasive, or handle a complex position without help. Preparation and professional engagement are, once again, the levers that matter.

What the outcomes can be, and your rights

An audit concludes with findings, and it is worth knowing the range of outcomes and, crucially, that an adverse one is not the end of the road.

The FTA may confirm your returns as filed, which for a well-prepared business is the common and desired result. It may assess additional tax where it finds under-reporting, together with applicable penalties and the 14% per annum on overdue tax late-payment charge on tax that should have been paid earlier. Less often, it may find that you overpaid and are due a refund. And it may make findings about your record-keeping or processes that you need to address going forward.

Where you disagree with an assessment, you are not obliged to simply accept it. The UAE provides formal mechanisms to challenge FTA decisions: a reconsideration application to the FTA itself, and beyond that an escalation through the tax dispute resolution and appeal processes. These are bounded, procedural routes with their own requirements and deadlines, and using them competently is how a genuinely wrong or excessive assessment gets corrected. This is one of the clearest places where representation matters, because a challenge succeeds or fails on how well the case is made within the rules.

The reassuring shape of the whole thing is therefore: an audit is a defined process, most outcomes for a prepared business are benign, an adverse finding can be challenged through proper channels, and at every stage your best position comes from complete records, honest engagement and, where the stakes warrant it, competent representation. Understood that way, an FTA audit is a serious matter to be managed carefully, not a catastrophe to be feared.

Where this goes wrong

• Treating an audit as an open-ended interrogation rather than a bounded process with defined stages.
• Responding slowly or incompletely, which stretches the audit and signals disorganisation.
• Volunteering unrelated information that opens new lines of inquiry.
• Providing disorganised records the auditors cannot easily verify against.
• Handling a complex or adverse position without representation.
• Assuming an assessment must be accepted, when reconsideration and appeal exist.
• Becoming defensive or evasive rather than engaging professionally.

Your next step

1. Understand the scope from the notification: which taxes and periods are under review.
2. Assemble the requested records completely and in an organised, traceable form.
3. Respond promptly and answer only what is asked, accurately and honestly.
4. Get representation for complex positions or likely-adverse findings.
5. If you disagree with an assessment, pursue reconsideration and appeal within the deadlines.

Related questions

Frequently Asked Questions

Last reviewed 27 July 2026. Rates, thresholds and deadlines change, the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.