FTA Tax Audit Services & Representation

Survive the Scrutiny. Mitigate Financial Penalties.

G12 provides specialized FTA Tax Audit Services to guide businesses through Federal Tax Authority reviews. We manage the entire audit lifecycle, from pre-audit health checks and document compilation to direct representation with tax officers, ensuring your VAT and Corporate Tax records withstand inspection.

What is an FTA Audit?

Defining the FTA Audit: Verification & Compliance

The Federal Tax Authority (FTA) conducts audits as a formal examination of a taxable entity’s liability and records. Since the UAE operates on a self-assessment model, where businesses are responsible for calculating and reporting their own VAT and Corporate Tax, the authority requires a mechanism to validate these declarations. An audit involves a forensic review of submitted Tax Returns, accounting ledgers, and commercial documents to confirm accuracy. The process ensures that all tax dues are settled correctly and that the business remains fully compliant with the relevant Federal Decree-Laws and UAE Tax Legislation.

Common Triggers for FTA Scrutiny

Understanding Audit Selection Criteria

The Federal Tax Authority maintains the legal right to examine any taxable entity without prior warning to ensure strict adherence to UAE Tax Legislation. While the authority conducts random inspections to gauge market compliance, specific patterns and operational structures significantly increase the probability of selection.

High-Risk Indicators:

VAT Refund Requests: Frequent or high-value claims for net tax refunds often initiate a review to verify the legitimacy of Input Tax recovery.
Inconsistent Filings: Significant variances between submitted VAT Returns, customs import data, and annual financial statements act as red flags.
Sector-Specific Risks: Cash-intensive businesses, retail outlets, and companies heavily involved in import/export activities face higher scrutiny due to the complexity of their transaction trails.
Late Registration or Payment: A history of missed deadlines for registration or tax settlement signals potential governance issues to the authority.
Whistleblowing: Reports filed by third parties regarding non-compliance can precipitate an immediate investigation.

Audit Completed

Consultation

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Technical Accuracy Checks:
Reverse Charge Mechanism (RCM): Confirmation that imported services and goods are declared correctly.
Foreign Exchange Handling: Verification that foreign currency transactions utilize the FTA-mandated exchange rates.
Tax Invoice Compliance: Ensuring all issued documents strictly meet the criteria outlined in Article 59 of the Executive Regulations.

Strategic Audit Readiness

Proactive Defense & Compliance Verification

Surviving an FTA review requires more than basic bookkeeping; it demands a forensic level of organization. The authority evaluates not just the numbers, but the internal framework used to generate them. G12 ensures your business is prepared to demonstrate robust governance and accurate reporting.

Critical Preparation Areas:

Internal Control Framework: We verify that your accounting software and manual processes effectively prevent data entry errors and tax miscalculations.
Transaction Mapping: The FTA requires a clear link between the initial supply, the tax invoice, and the final ledger entry. We ensure your “Audit Trail” is unbroken and transparent.
Pre-Audit Health Check: G12 conducts a simulated audit to identify discrepancies. If errors exist, we assist in filing a Voluntary Disclosure to mitigate potential penalties before the official examination begins.

Reliable representation is essential. G12 acts as your technical defense, validating your tax positions and managing the submission of the FTA Audit File (FAF) to prevent administrative fines.

Why Choose G12 for Audit Defense

Strategic Risk Management

Facing an FTA officer requires legal knowledge and data precision. G12 provides the technical infrastructure to protect your financial interests.

Don’t Wait for the

Notification.

The cost of non-compliance far exceeds the investment in professional defense. Whether you require a pre-audit health check, assistance with a Voluntary Disclosure, or full representation during an active FTA review, G12 provides the technical expertise to protect your business.

Frequently Asked Questions

How does the FTA initiate the audit process?

The Authority typically issues a formal notification via the EmaraTax portal and registered email. This notice specifies the audit scope (VAT, Corporate Tax, or Excise), the period under review, and the list of required documents. Businesses usually have five business days to acknowledge receipt and submit the initial “Audit File.”

What is the statutory retention period for tax records?

Under UAE Tax Law, taxable entities must retain all financial records, invoices, and ledgers for a minimum of 5 years from the end of the tax period. For companies owning real estate assets, the retention period extends to 15 years. Failure to produce these physical or digital records results in immediate penalties.

What is the difference between a Desk Audit and a Field Audit?

A Desk Audit is remote; the FTA requests documents to be uploaded via the portal or email for review at their offices. A Field Audit involves tax officers visiting your physical premises to inspect inventory, systems, and operations. Both carry equal legal weight and potential for penalties.

Can we rectify errors after receiving an audit notice?

Once an audit notification is issued, you generally cannot file a Voluntary Disclosure (VDF) for that specific period without FTA approval or facing higher penalties. This emphasizes the need for regular “Health Checks” to file VDFs before an audit begins.

How do we challenge an incorrect Tax Assessment?

If you dispute the FTA’s findings, you must pay the penalty first (or obtain a waiver) and file a Request for Reconsideration within 40 business days. If the Reconsideration is rejected, the next step is the Tax Disputes Resolution Committee (TDRC), provided the tax and penalties are settled.