Receiving an audit notice from the FTA does not have to be a crisis. With clean records and a structured response, most audits close within 90 days with minor adjustments or none at all. Here is the playbook.
What you'll learn
→ How audits begin → What auditors ask for → During the audit → Closing and disputesHow audits begin
The FTA selects audits based on risk indicators: large input VAT refunds, significant variance between filed returns and customs data, voluntary disclosures suggesting weak controls, industry-specific risk patterns (real estate, gold, large e-commerce). Some are random; most are risk-based.
Notice arrives by email and on the EmaraTax portal. The notice specifies the periods under audit, the type of audit (desk-based or field), the documents requested, and the response deadline (usually 10-20 working days). Engaging an experienced tax advisor early is almost always worth the cost.
What auditors ask for
Standard requests: VAT returns and supporting working papers; trial balance and general ledger; sales invoices (sample or full population); purchase invoices and import documentation; bank statements and reconciliations; signed contracts for major transactions; and evidence of zero-rating or exemption for any non-standard supplies.
For corporate tax audits, add: financial statements (audited if available), CT-101 working papers, transfer pricing documentation, and supporting calculations for any reliefs (SBR, QFZP, group relief, foreign tax credit). Be over-prepared on documentation, the FTA reads everything.
During the audit
Field audits involve auditors visiting your premises, inspecting records, interviewing staff. Most run 2-5 days on-site, then 30-60 days of follow-up correspondence. Desk audits are entirely electronic, slower (typically 90-120 days end-to-end) but less disruptive.
Maintain a single point of contact within your team. Channel all auditor questions through that person. Answer factually, in writing, and only what is asked. Do not volunteer information beyond the scope of the audit. Every email and document is part of the file.
Closing and disputes
Audits close with one of three outcomes: no adjustment, agreed adjustment with assessment, or disputed adjustment. Agreed adjustments come with a percentage penalty (often 5-25%) plus 4% per month interest. Disputed adjustments require a Reconsideration Request within 20 working days.
If the Reconsideration is rejected, the next step is the Tax Disputes Resolution Committee, then the courts. Most disputes settle at the Committee stage. Throughout, keep paying any undisputed amounts to avoid additional interest while you work through procedure.
This guide is general information, not professional advice. For situations that involve specific facts, talk to your accountant, or hire one of ours from the marketplace.