FTA Audit Support
FTA Corporate Tax Audit: What to Do When the Notice Arrives
An audit notice is not an accusation. It is a request for evidence with a deadline attached. Businesses that treat it as the first and answer it carefully tend to close the file. Businesses that treat it as the second, and send everything they have in a panic, tend to widen it.
- The request read properly before anything is sent
- One coordinated response, not scattered attachments
- Gaps identified and addressed before they are raised
- Someone else dealing with the correspondence
Dubai-based corporate tax support for UAE mainland, free zone and group structures.
Last reviewed against current FTA guidance.
Quick Answer
The FTA may audit a taxable person's corporate tax position and will normally give notice before doing so, setting out what is required and by when. The audit examines the return, the financial statements behind it, the computation adjustments and the supporting records. Answering precisely and within the deadline is what keeps an audit narrow; incomplete or inconsistent responses are what widen it into other periods.
Read the Request Before You Answer It
Every audit request has a scope: specific periods, specific items, sometimes a single adjustment. The most common error is to answer a wider question than the one asked, which hands over material that was never in scope and invites follow-ups.
The second most common is missing the deadline while assembling a perfect answer. A complete response on time beats an ideal response late.
- Identify the periods and items in scope
- Note the deadline and work back from it
- Answer what was asked, fully, and nothing else
- Keep one version of every document supplied
- Request an extension formally if one is genuinely needed
What They Usually Ask For
The requests follow a pattern. Financial statements and the trial balance. The computation showing how accounting profit became taxable income. Support for the larger adjustments. Related-party agreements and the transfer pricing position. For free zone companies, everything behind the qualifying income claim.
If those documents exist and agree with each other, most audits are short.
- Financial statements and trial balance for the period
- The tax computation with adjustments identified
- Invoices and contracts behind material items
- Related-party agreements and pricing support
- Qualifying income analysis where a 0% claim was made
- Bank statements reconciling to the reported revenue
Consistency Is the Whole Game
Auditors do not read documents in isolation. They read them against each other. Revenue in the return against revenue in the audited statements. Related-party balances in your ledger against the same balances in the counterparty's. The qualifying income figure against the sales ledger it came from.
Where those disagree, the difference becomes the audit. Finding the disagreements yourself, first, is most of the work.
- Return reconciled to the audited statements
- Intercompany balances agreed in both directions
- Revenue reconciled to banking
- Adjustments traceable to a document
- Prior period treatment consistent with this one
If an Assessment Is Raised
Where the Authority concludes the return understated the tax, it issues an assessment. That is a decision, and decisions can be challenged: reconsideration within 40 business days of notification, then the Tax Disputes Resolution Committee if that fails.
The strength of the challenge depends almost entirely on the file assembled during the audit. Documents produced afterwards carry less weight than the same documents produced on time.
- An assessment is a decision, and it can be contested
- Reconsideration within 40 business days of notification
- The Tax Disputes Resolution Committee is the next stage
- Late payment charges run on the assessed amount
- The audit file becomes the evidence base for any challenge
Reducing the Odds in the First Place
Audits are not random in the way people assume. Returns that contradict the statements, large adjustments with no explanation, free zone claims with no analysis, related-party balances that appear from nowhere: these are the things that stand out in a data set.
Filing a return whose file already answers the obvious questions is the cheapest audit defence available.
- Keep the working papers with the return, every year
- Document material adjustments when you make them
- Keep intercompany agreements current
- Track qualifying income during the year, not after
- Retain records for the full statutory period
What Exiloz Does During an Audit
We read the request, build the response, review the file for gaps before anything is sent, and handle the correspondence. Where a real problem exists, we tell you early rather than letting the Authority tell you late.
You keep control of what is submitted. Nothing goes out without your approval.
- Scope and deadline confirmed on day one
- A single coordinated response, indexed
- Internal review for gaps before submission
- Correspondence handled on your behalf
- Reconsideration prepared if an assessment follows
Will the FTA warn us before a corporate tax audit?
Notice is normally given, setting out what is required and the deadline for providing it. The notice defines the scope, which is why reading it carefully before responding matters.
What do they usually ask for first?
Financial statements, the trial balance, the computation showing how accounting profit became taxable income, and support for the larger adjustments. Free zone companies are also asked for the qualifying income analysis.
How long do we have to respond?
The deadline is stated in the request. Where more time is genuinely needed, ask formally and early rather than missing the date.
Should we send everything we have?
No. Answer what was asked, completely. Volunteering material outside the scope tends to generate follow-up questions rather than close the file.
What happens if they find an error?
The Authority may issue an assessment for the additional tax, with penalties and the late payment charge. An assessment is a decision and can be challenged by reconsideration within 40 business days.
Can you deal with the FTA for us?
We prepare and coordinate the response and handle the correspondence. Nothing is submitted without your written approval.
Does an audit cover more than one year?
It can. Keeping the response tight to the periods in scope is one of the practical reasons to answer carefully rather than broadly.
How far back do we need records?
Corporate tax record retention runs for several years beyond the end of the tax period. Keep the working papers with the return so the file stays together.
We think there is a genuine error. What then?
Say so early and quantify it. Correcting a figure through a voluntary disclosure before the point is raised is treated very differently from having it assessed.
The rest of what we do
Licence, visas, bank account, books and the first tax return: handled by the same team, so the structure has to survive its first year.
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Accounting & Bookkeeping
Books kept audit-ready from month one, not reconstructed at year end.
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Audit Preparation
Schedules, reconciliations and the evidence your auditor will ask for.
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Payroll & WPS
Payroll, WPS files and end-of-service calculated correctly.
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Tax Residency Certificate
Day-count position verified and the FTA document pack assembled.
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Customs Registration
Client code and Mirsal registration, before your first shipment, not after.
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ICV Certification
Score modelled and improved before the audit, not explained afterwards.
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UAE Free Zones
All 37 zones compared by emirate, with the founding law and what each is really for.
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Company Formation
Mainland, free zone and offshore incorporation, started from your activity code.
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Notice Arrived? Do Not Answer It Yet.
Send us the request. We will read the scope, build one coordinated response and check the file for gaps before anything reaches the Authority.
