Skip to content 
Yes. The Federal Tax Authority (FTA) can conduct a Corporate Tax audit in the UAE to verify whether a business or other person has complied with the Corporate Tax Law and the Tax Procedures Law. An audit may involve reviewing the Corporate Tax return, financial records, supporting documents, electronically stored data and accounting systems. Businesses should therefore be able to explain and support the figures, adjustments, elections and disclosures included in their return.
A Corporate Tax return should not be treated as a one-time submission that can be forgotten after filing. Good audit readiness starts with accurate accounting records, a clear tax computation and supporting documentation retained after submission. Beaufort Associates provides Corporate Tax return filing services that can include preparation, review and support for routine post-filing queries, depending on the agreed scope.
Key Takeaways
- The FTA has the legal power to conduct a tax audit of any person to verify compliance with UAE tax law.
- The FTA generally gives at least 10 business days’ notice before a tax audit, subject to specific statutory exceptions.
- The FTA may inspect business premises, documents and assets held there, electronically stored data and records, and accounting systems.
- Corporate Tax records and supporting documents generally need to be retained for at least seven years after the end of the relevant tax period (the financial period for which Corporate Tax is calculated and filed).
- A statutory financial statement audit and an FTA Corporate Tax audit are different processes.
- Good preparation means keeping the Corporate Tax return reconciled to the accounting records and maintaining support for material tax positions before an audit notice arrives.
Table of Contents
What is a Corporate Tax Audit in the UAE?
A Corporate Tax audit is an examination carried out by the FTA to determine whether a person has met its obligations under the Tax Procedures Law and the relevant tax law. For Corporate Tax, the review may examine whether the return, taxable income (income after the adjustments required by the Corporate Tax Law), Corporate Tax payable and supporting positions are consistent with the business’s records and the applicable legislation.
This is different from a statutory audit of financial statements. A statutory financial statement audit is performed by an independent external auditor and focuses on the financial statements under the applicable financial reporting framework. An FTA tax audit is a regulatory review by the tax authority. Audited financial statements may form part of the evidence reviewed, but they do not replace the FTA’s power to examine the tax position.
Can the FTA Audit Any Business?
Yes. Federal Decree-Law No. 28 of 2022 on Tax Procedures, as amended, allows the FTA to conduct a tax audit of any person to verify compliance. The Executive Regulation also states that the decision to conduct an audit is within the FTA’s discretion.
Before deciding to conduct a tax audit, the Executive Regulation requires the FTA to take specified factors into account. These include protecting the integrity of the tax system, the compliance responsibility of the person or associated persons, expected tax revenue, and the compliance and administrative burden of carrying out the audit.
Businesses should therefore not assume that only large companies can be audited. The legislation does not create a general exemption from FTA audit simply because a company is small, has claimed a relief or has already submitted its return.
What Can the FTA Review During a Corporate Tax Audit?
The scope depends on the facts and the audit request. Under the Executive Regulation of the Tax Procedures Law, the FTA may inspect or audit the business premises and the documents and assets held there, electronically stored data and records, and accounting systems used by the person subject to tax.
For a Corporate Tax review, relevant support may therefore include:
- financial statements, trial balances, general ledgers and accounting reports;
- sales and purchase records, invoices, contracts and bank support;
- records of assets, liabilities and shares held;
- the Corporate Tax return, tax computation and supporting schedules;
- support for tax adjustments, exemptions, reliefs and elections claimed in the return;
- related-party information (for example, transactions with a parent company, subsidiary, shareholder or commonly controlled business where the legal definition is met) and connected-person information (for example, transactions involving an owner or director where the Corporate Tax rules apply), including transfer pricing support where applicable;
- Free Zone documentation where a business relies on the qualifying Free Zone person regime (the special Corporate Tax regime for a Free Zone business that meets the required conditions); and
- reconciliations explaining differences between accounting figures and amounts reported for Corporate Tax purposes.
Businesses with technical adjustments, Free Zone positions or related-party transactions may benefit from a pre-filing or post-filing review. Beaufort Associates provides Corporate Tax consultancy in the UAE for businesses that need help assessing and documenting their tax position.
How Much Notice Must the FTA Give Before an Audit?
The Executive Regulation generally requires the FTA to notify the person at least 10 business days before conducting a tax audit. The audit notification must also refer to the possible consequences of obstructing the tax auditor from carrying out their duties.
The Tax Procedures Law contains limited exceptions allowing a tax auditor to access relevant premises without prior notice where the statutory conditions are met, including where the FTA has serious reasons to believe there is tax evasion or that failure to act immediately may impede the audit. These powers are exceptional and should not be treated as the standard audit process.
What Happens During an FTA Corporate Tax Audit?
The exact audit will depend on its scope, but the legislation provides a structured framework. A Corporate Tax audit may involve the following stages:
- Audit notification. The FTA issues the audit notice for the review to be undertaken.
- Records and information review. The business provides the requested records, documents and explanations. The FTA may also inspect electronic data and accounting systems.
- Queries and clarification. The tax auditor may request additional information or documents needed for the audit.
- Audit outcome. The FTA must notify the person subject to audit of the audit outcome in accordance with the Tax Procedures Law and the procedures and timeframe set by its Executive Regulation.
- Access to supporting audit material. A person may apply to access or obtain the documents, data and information on which the FTA relied in assessing the due tax, subject to the applicable procedure, limitations and timeframe.
Businesses should answer FTA requests accurately and consistently. Article 20 of the Tax Procedures Law requires the person subject to audit, its tax agent (a person formally registered to represent another person before the FTA) or legal representative (a person legally authorised to act for the business) to provide the facilities and assistance needed for the tax auditor to perform the audit.
What Records Should a Business Keep for a Corporate Tax Audit?
Corporate Tax records should be sufficient to support the information reported to the FTA and allow taxable income to be verified. The FTA has specifically reminded businesses to maintain records of transactions, assets, liabilities and shares held, together with other documentation supporting the Corporate Tax return.
As a general Corporate Tax rule, relevant records and documents must be retained for at least seven years following the end of the tax period to which they relate. Keeping only the filed return is not enough; the underlying accounting records and evidence supporting material tax positions should remain retrievable.
Failure to keep the records and other information required under the Tax Procedures Law and Corporate Tax Law can result in administrative penalties. Under the current Corporate Tax penalty framework, the penalty is AED 10,000 for each violation and AED 20,000 where the same violation is repeated within 24 months from the date of the last violation.
Can an Audit Lead to Additional Tax or Penalties?
Yes, depending on the findings. If the FTA concludes that the tax position reported was incorrect, the audit may lead to a tax assessment (the FTA’s formal determination of tax due), additional Corporate Tax payable and administrative penalties under the applicable legislation. The outcome depends on the nature of the error, the amount involved and the circumstances of any correction or voluntary disclosure (a formal correction submitted to the FTA where required).
A separate AED 20,000 administrative penalty applies where a person subject to a Corporate Tax audit, its tax agent or legal representative fails to provide the required facilitation to the tax auditor in breach of Article 20 of the Tax Procedures Law. Businesses should therefore treat audit correspondence and information requests as formal compliance matters and respond within the required timeframe.
How Can You Prepare Before the FTA Audits Your Corporate Tax Return?
The best time to prepare for a Corporate Tax audit is before an audit notice is received. Audit readiness is mainly about being able to trace each material figure and tax treatment from the return back to reliable accounting records and supporting evidence.
- Reconcile the Corporate Tax return to the final financial statements and trial balance.
- Maintain schedules for non-deductible expenses, exempt income, reliefs, elections and other tax adjustments.
- Keep supporting contracts, invoices, resolutions and calculations for material or unusual transactions.
- Document related-party and connected-person transactions and maintain transfer pricing support where required.
- For Free Zone businesses, retain evidence supporting the Corporate Tax treatment and relevant qualifying conditions.
- Keep clear explanations for differences between accounting profit and taxable income.
- Ensure accounting data and archived records remain accessible for the full retention period.
- Review potential errors promptly rather than waiting for an FTA query or audit notice.
Where a business is unsure whether its records and tax positions are ready for scrutiny, a broader Corporate Tax services review in Dubai can help identify gaps before they become part of an FTA information request.
How Can Beaufort Associates Help With Corporate Tax Audit Readiness?
Beaufort Associates can help businesses prepare for and respond to Corporate Tax audit matters by reviewing the filed or proposed tax position, reconciling financial information, organising supporting schedules and assisting with responses to FTA queries within the agreed scope of the engagement.
Support can include reviewing Corporate Tax computations and returns, assessing material tax adjustments, helping organise supporting documentation and assisting management with clear responses to FTA information requests. Where the underlying accounting records need improvement, the review can also identify records that should be corrected or completed before they are relied upon in an audit response.
Businesses that have not yet filed can improve audit readiness by making the return supportable from the outset. Beaufort Associates’ Corporate Tax return filing process can include review and explanation before submission, with assistance for routine post-filing queries, depending on the agreed scope.
Frequently Asked Questions
Can the FTA audit a small business in the UAE?
Yes. The Tax Procedures Law allows the FTA to conduct a tax audit of any person to verify compliance. There is no general exemption from FTA audit solely because a business is small or has elected Small Business Relief.
Is an FTA Corporate Tax audit the same as a financial statement audit?
No. An FTA Corporate Tax audit is a regulatory review by the tax authority. A financial statement audit is performed by an independent external auditor and focuses on the financial statements. Audited financial statements may still be reviewed by the FTA as part of a tax audit.
How much notice does the FTA give before a Corporate Tax audit?
The Executive Regulation generally requires at least 10 business days’ notice before a tax audit. The Tax Procedures Law contains limited exceptions allowing access without prior notice where specified statutory conditions are met.
How long should Corporate Tax records be kept in the UAE?
Relevant Corporate Tax records and documents generally must be kept for at least seven years after the end of the tax period to which they relate. q
Can the FTA audit a Corporate Tax return after it has been filed?
Yes. Filing a Corporate Tax return does not prevent the FTA from reviewing or auditing it later. The Tax Procedures Law contains limitation periods and specific exceptions that determine how long the FTA may conduct an audit or issue a tax assessment.
Can Beaufort Associates help if the FTA starts a Corporate Tax audit?
Yes. Beaufort Associates can assist with reviewing the tax position, organising supporting information, preparing explanations and helping management respond to FTA queries within the agreed scope of the engagement.
beaufort
Last Reviewed on 11th September, 2026
This page sets out our understanding of corporate tax filing based on the legislation and guidance in force at the date of last review. The position may change, and the application to a particular set of facts may require further analysis. Nothing on this page constitutes professional, legal or tax advice. Beaufort Associates accepts no liability for action taken or not taken in reliance on this page. Please contact us for advice tailored to your circumstances.
Sources
Primary sources referenced on this page:
- Federal Decree-Law No. 28 of 2022 on Tax Procedures, as amended
- Cabinet Resolution No. 74 of 2023 on the Executive Regulations of Federal Decree-Law No. 28 of 2022 on Tax Procedures, as amended
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, as amended
- Federal Tax Authority - Corporate Tax Returns Guide | CTGTXR1
- Federal Tax Authority - record-retention reminder for Corporate Tax (27 August 2025)
- Cabinet Decision No. 75 of 2023 and amendments - Administrative Penalties for Corporate Tax violations
We have referenced the legislation in force as at the last review date. The UAE tax framework is evolving; later changes may affect the position. Speak with us for advice on your specific circumstances.
