📌 Introduction
With the implementation of UAE’s Corporate Tax regime under Federal Decree-Law No. 47 of 2022, businesses must not only file accurate tax returns but also be audit-ready at all times. The Federal Tax Authority (FTA) has the authority to conduct corporate tax audits to verify tax compliance, assess accuracy of returns, and identify any misreporting or non-compliance.
A tax audit can be triggered any time within the statute of limitations (usually 5 years), and failure to comply could lead to penalties, fines, and reputational risks.
🧾 What Is a Corporate Tax Audit?
A Corporate Tax Audit in the UAE is a formal review by the FTA to examine whether a business has:
- Accurately filed its corporate tax return
- Properly calculated taxable income and tax liability
- Maintained required documentation, including audited financials and TP files
- Complied with tax laws and decisions
🔍 What Triggers a Corporate Tax Audit?
The FTA may initiate an audit for several reasons, including:
- Discrepancies in tax filings
- Repeated losses or refunds claimed
- High-risk industry categorization (e.g., gold, trading, virtual assets)
- Incomplete or incorrect transfer pricing documentation
- Random selection
🔍 Who Should Maintain Audited Financial Statements?
The following companies shall prepare and maintain audited financial statements
- Companies with turnover exceeding AED 50,000,000
- Qualifying Freezones
✅ Key Documents Required During a Tax Audit
To be prepared, ensure the following documents are available:
- Corporate tax registration certificate
- Audited financial statements
- General ledger and journal entries
- Invoices, contracts, and supporting records
- Bank statements
- Transfer pricing documentation
- Free zone qualifying income proof
- FTA correspondence
🧠 How Can Audit & Accounting Firms Help?
- Internal tax reviews and health checks
- Correcting errors in returns
- Drafting audit response documentation
- Supporting FTA visits and queries
- Maintaining compliant documentation
- FTA representation
🚨 Risks of Non-Compliance
- Financial penalties
- Loss of Free Zone benefits
- Reputational risk
- Criminal liability
📌 Conclusion
Corporate tax audits are a core part of UAE’s compliance framework. Being organized and guided by professionals helps businesses stay ready.
📢 Need Help with Corporate Tax Audit?
AVS Lewis & Pecker Auditing provides complete audit support — from health checks to FTA interactions.
📞 Contact us today to stay compliant and confident.
