The FTA Is Auditing My Business — What Actually Happens Next

Under Article 16 of Federal Decree-Law No. (28) of 2022 on Tax Procedures, the FTA must notify a business at least 10 days before conducting a Tax Audit. If you've received that notice, the audit itself hasn't started yet — you have a short but real window to get organised.

There is one serious exception: in cases of suspected Tax Evasion, the FTA can access a business's premises without prior notice, for a maximum of 72 hours. If that's what's happening to you rather than a routine notified audit, treat it as materially more serious and get a lawyer involved immediately rather than working through the ordinary steps below at a normal pace.

The FTA's administrative penalty schedule treats a failure to keep required records as its own violation, separate from anything the audit might otherwise find — AED 10,000 per violation, rising to AED 20,000 if repeated within 24 months, under Cabinet Resolution No. (75) of 2023. Before the audit date, make sure your Corporate Tax and VAT records, returns and supporting documentation are complete and organised, not just correct.

This is also the point to loop in a tax lawyer or tax agent if you haven't already, particularly if you're not confident every return filed to date was accurate — an audit is exactly the moment inaccuracies in past filings tend to surface.

Under Article 23 of the Tax Procedures Law, the FTA issues a Tax Assessment where a person fails to register, fails to submit a return, fails to pay tax due, submits an incorrect return, or where Tax Evasion has occurred. If the audit turns up any of these, expect a formal Assessment, not just an informal finding — the FTA must notify you of it within 10 business days of its issuance.

An Assessment is the FTA's own conclusion about what you owe — it isn't automatically correct, and it's the starting point for the dispute process in Steps 5 to 7 below if you disagree with it.

Corporate Tax and VAT have two entirely separate administrative penalty schedules, structured differently — don't assume one works like the other. Corporate Tax late filing (Cabinet Resolution No. (75) of 2023) escalates monthly: AED 500 per month or part-month for the first 12 months, then AED 1,000 per month or part-month from month 13 onward. VAT late filing (Cabinet Decision No. 40 of 2017, as amended) is a flat one-off amount instead — AED 1,000 the first time, AED 2,000 if repeated within 24 months — it does not accrue monthly.

Late payment is 14% per annum, charged monthly on the unpaid amount, under both schedules. And under Article 25 of the Tax Procedures Law, there's a general cap: an administrative fine assessment cannot exceed twice the tax amount it's based on. Knowing which schedule applies to which tax, and that they're genuinely different mechanisms, matters for working out your actual exposure.

Articles 28 and 29 of the Tax Procedures Law let you apply for the FTA to reconsider a Tax Assessment or other decision. The application must be submitted within 40 business days of being notified of the decision, and the legislative text states the FTA must decide within 40 business days.

One thing worth knowing rather than being surprised by: the UAE government's own plain-language summary of this stage describes a 45-business-day FTA review window with a further 5 business days to notify you of the outcome — a slightly different figure from the 40-business-day figure in the Decree-Law text itself. These may describe two different sub-steps, deciding versus notifying, rather than truly conflicting, but don't rely on a single confident number for this stage — ask your lawyer which figure governs your specific deadline.

An objection to the Tax Disputes Resolution Committee (TDRC) must be filed within 40 business days of being notified of the FTA's reconsideration decision, under Article 32. Critically, the disputed tax must be paid in full before you can object — this isn't optional, and it's a real cash-flow decision to plan for, not a formality.

The Committee, chaired by a member of the Judiciary with two members drawn from the Tax Experts Roll under Article 30, must decide within 20 business days of receiving the objection under Article 33. A possible 20-business-day extension is mentioned in the UAE government's own process summary, though this wasn't independently re-verified against the Decree-Law article text for this page — don't assume the extension is or isn't available without checking.

Either you or the FTA can appeal the Committee's decision to the competent Court within 40 business days of notification, under Article 36. The appellant must show proof of full payment of the tax, and must pay a minimum of 50% of the disputed administrative fines, or provide a bank guarantee for that 50%.

One claim worth knowing is specifically unconfirmed: a commonly assumed rule that TDRC decisions become final and non-appealable below a certain disputed amount (a figure sometimes cited is AED 100,000). This could not be found in the Tax Procedures Law articles reviewed for this page, and the UAE government's own dispute-resolution summary describes both parties as able to appeal to Court with no monetary carve-out mentioned. Don't assume a small dispute is automatically final at Committee stage — confirm your specific position with a lawyer before deciding not to appeal.