FTA Audits: What to Expect and How to Prepare

The UAE’s Federal Tax Authority (FTA) is actively conducting audits to ensure businesses are complying with VAT and corporate tax regulations. While many companies assume they’re compliant, the reality is that even small documentation gaps or procedural errors can trigger penalties.
So, what exactly happens during an FTA audit? And how can your business prepare effectively?

What Is an FTA Audit?

An FTA audit is a formal review conducted by the Federal Tax Authority to verify whether a business has correctly complied with UAE tax laws — particularly in areas like VAT filings, tax invoices, input claims, and record-keeping.
Audits can be random, risk-based, or triggered by discrepancies in your VAT or corporate tax returns.

What Will the FTA Review?

During an audit, the FTA may request a variety of financial records, including VAT returns and supporting schedules, tax invoices, credit notes, debit notes, the general ledger, trial balance, bank statements, reconciliations, and detailed sales and purchase records. In addition, they often examine accounting system reports and audit trails to ensure accuracy and compliance. For businesses dealing with inventory, physical site inspections may also be conducted to verify stock and storage records.

How Long Does It Take?

FTA audits vary in duration depending on the size and complexity of the business. Typically, the process can take from a few days to several weeks, and auditors may follow up with additional questions or clarifications. The FTA provides a notice prior to the audit. However, in some cases, unannounced inspections can occur.

How to Prepare for an FTA Audit

Maintain Complete and Organized Records
Ensure all tax documents and supporting schedules are stored for at least 5 years.
Reconcile Regularly
Reconcile your VAT filings with your accounting and bank records each quarter.
Review Invoices
Double-check that all tax invoices meet FTA requirements and include the correct TRN, date, and value.
Train Your Team
Make sure your finance staff understand VAT and corporate tax basics.
Engage a Tax Consultant
Work with professionals like LYNNX to conduct a pre-audit health check and identify risks in advance.