FTA Audit for VAT in UAE

What Is an FTA VAT Audit?

An FTA VAT audit is a formal examination of a business’s financial records, tax returns, and transactions to ensure compliance with UAE VAT laws.

The Federal Tax Authority conducts audits to:

• Verify correct VAT collection and payment
• Confirm proper input VAT recovery
• Identify errors, fraud, or underreporting

Audits can be random or triggered by suspicious activity or non-compliance.

When Can an FTA Audit Happen?

• Randomly as part of routine compliance checks
• If returns show unusual patterns (e.g., high refunds, zero VAT over long periods)
• If complaints are received from customers or suppliers
• If the business fails to file or pay VAT on time
• Following incorrect Voluntary Disclosures

What Documents Are Checked in an FTA VAT Audit?

The FTA may request:

• VAT returns for the last 5 years (15 years for real estate businesses)
• Tax invoices (sales & purchases)
• Credit/debit notes
• Customs import/export documentation
• Bank statements and ledgers
• Contracts and agreements
• Proof of zero-rated supplies (e.g., export documents)
• Payroll and HR records (for staff expenses)

FTA VAT Audit Process (2026)

1. Audit Notification

• FTA sends an official notice via email and portal
• The notice states audit date, scope, and required documents

2. Preparation Phase

• Business gathers all requested records
• Documents must be in Arabic or translated (as per FTA rules)

3. Audit Execution

• Conducted on-site at your office or off-site via document submission
• FTA auditors review invoices, ledgers, returns, and bank statements
• May interview finance staff or management

4. Audit Findings

• FTA issues a report with discrepancies, penalties, or additional tax payable
• You may be asked to pay VAT + penalties within a specific time frame

5. Appeals & Reconsideration

• You can file a Reconsideration Request within 20 business days if you disagree with the findings

Common Audit Triggers

• Claiming high VAT refunds regularly
• Mismatched input and output VAT
• Missing or non-compliant tax invoices
• Large cash transactions without proof
• Frequent late filings or payments

How to Prepare for an FTA Audit

• Keep all VAT-related records for the required period
• Ensure invoices meet FTA standards (TRN, VAT amount, date, etc.)
• Maintain clear separation of taxable and exempt supplies
• Use VAT-compliant accounting software
• Conduct internal VAT reviews quarterly
• Seek professional help for VAT reconciliation before filing

Most Searched VAT Audit FAQs (2026)

Q: Can the FTA audit without notice?
A: Yes, but most audits are announced in advance.

Q: How long does an FTA VAT audit take?
A: From a few days to several weeks, depending on complexity.

Q: What if I don’t cooperate with an FTA audit?
A: This can lead to severe penalties and possible legal action.

Q: Can I request extra time to submit documents?
A: Yes, but approval is at the FTA’s discretion.

Conclusion

An FTA VAT audit is not something to fear if your records are accurate and compliant. Businesses that maintain proper documentation, follow FTA rules, and file VAT correctly can pass audits without issues.

Need Help Preparing for an FTA Audit?

At Think Biz Management Consultancies, we help you:

• Prepare for VAT audits and compile required documents
• Conduct internal VAT compliance checks
• Represent you during FTA audits
• Respond to FTA queries and notices
• Avoid penalties through proactive VAT management

 

Contact us today for a free consultation.
We’ll ensure your VAT records are audit-ready and fully compliant.