Corporate Tax Audits: What to Expect and How to Prepare

With corporate tax introduced in the UAE, audits are becoming part of the regulatory landscape. The Federal Tax Authority (FTA) has the power to review a company’s tax compliance at any time. For businesses, preparation is essential.

This blog explains what to expect during a corporate tax audit — and how to be ready.

What is a Corporate Tax Audit?

An FTA corporate tax audit is a review of your financial records, returns, and supporting documents to ensure compliance with UAE tax laws.

Audits can cover:

  • Reported income and profits
  • Deductions and exemptions claimed
  • VAT and corporate tax consistency
  • Transfer pricing and related-party transactions

What Triggers an Audit?

Audits may be random, but they’re often triggered by:

  • Unusual fluctuations in income or expenses
  • Repeated filing errors
  • Late submissions
  • Complaints or suspicious activity reports

How to Prepare for a Corporate Tax Audit

1. Keep Accurate Records
Maintain detailed records of invoices, contracts, and bank statements. By law, UAE businesses must keep records for at least five years.

2. Reconcile VAT and Corporate Tax
Ensure figures in VAT and corporate tax filings match. Discrepancies are a common red flag.

3. Document Transfer Pricing Policies
Businesses with related-party transactions must prepare transfer pricing documentation. Failing to do so is a major audit risk.

4. Conduct Internal Reviews
Regular internal audits catch errors before the FTA does. This proactive approach reduces penalties.

5. Seek Professional Guidance
Having a tax advisor ensures your business stays aligned with FTA expectations and industry best practices.

What to Expect During the Audit

  • Notification from the FTA.
  • Submission of requested documents.
  • Possible site visit for further review.
  • Final report highlighting findings and adjustments.

Audits can be stressful, but businesses with organised records and professional support often pass without issue.

At Taxwise, we help businesses in Dubai prepare for and manage corporate tax audits. Our diligent approach ensures your records are clean, compliant, and audit-ready, giving you peace of mind.

Contact Taxwise today to make your next audit a success.