Corporate Tax Audit — United Arab Emirates
Corporate Tax Audit Services in UAE
Stay prepared for an FTA Corporate Tax review with professional Corporate Tax audit services in the UAE. IncHub helps businesses examine their tax position, assess compliance gaps, verify supporting records and prepare the documentation needed to substantiate their Corporate Tax filings.
Our approach combines tax review, risk identification and practical audit preparation to help businesses respond confidently to FTA requirements and maintain a well-supported Corporate Tax position.
What is Corporate Tax Audit
Corporate Tax Audit in the UAE
A Corporate Tax audit involves examining a business’s tax affairs, financial information and relevant records to determine whether its Corporate Tax obligations have been addressed correctly. In the UAE, the Federal Tax Authority (FTA) is responsible for administering and enforcing federal tax legislation and may review information relevant to a taxable person’s Corporate Tax position.
An FTA review can involve different types of information, including Corporate Tax Returns, accounting records, financial statements, transaction details and documents used to support the figures reported to the FTA.
Maintaining complete and well-organised records is therefore an important part of Corporate Tax compliance. Businesses should be able to substantiate the information included in their tax filings and demonstrate how their taxable income and resulting tax position were determined.
Audit Scope
Who May Be Subject to an FTA Corporate Tax Audit?
Businesses operating under different structures can have Corporate Tax obligations in the UAE. The nature of those obligations and the areas requiring attention may differ according to the company’s activities, structure and tax position.
What FTA Reviews
What Does the FTA Review During a Corporate Tax Audit?
The scope of an FTA review can differ from one case to another. Businesses should nevertheless be prepared to substantiate the information reported in their Corporate Tax filings and provide relevant records when requested.
Corporate Tax Registration
The FTA may need to verify information associated with a taxable person’s Corporate Tax registration. Ensure registration details are accurate and consistent with actual business circumstances.
Corporate Tax Returns
Corporate Tax Returns should accurately represent the company’s tax position. Information reported in a return may be considered alongside accounting records and other supporting documents.
Financial Statements and Accounting Records
Accounting records form an important source of information when determining and supporting a business’s Corporate Tax position, covering revenue, expenses, assets, liabilities and transactions.
Taxable Income and Tax Computation
A review may consider accounting profit, taxable income, applicable tax adjustments, exempt income, deductible and non-deductible expenses, and other items affecting the Corporate Tax calculation.
Related-Party Transactions
Businesses involved in transactions with related parties or connected persons should consider the Corporate Tax and transfer pricing rules relevant to those arrangements.
Free Zone Corporate Tax Treatment
Businesses relying on Qualifying Free Zone Person treatment should maintain evidence supporting their eligibility and the treatment applied to relevant income.
Required Documents
Corporate Tax Audit Documents Required in the UAE
The documents required during a Corporate Tax review will depend on the business, its activities and the information requested by the FTA. Businesses should maintain sufficient records to substantiate their Corporate Tax position.
Financial Documents
- Financial statements
- Trial balance and general ledger
- Bank statements
- Sales and purchase invoices
- Receipts and expense records
- Asset and liability records
Tax Documents
- Corporate Tax registration information
- Corporate Tax Returns
- Tax computations
- Corporate Tax payment records
- FTA correspondence
- Relevant tax submissions
Supporting Compliance Documents
- Commercial agreements and business contracts
- Related-party agreements
- Transfer pricing documentation
- Free Zone records
- Transaction records
- Supporting calculations
- Documents supporting tax adjustments
Audit Preparation
How to Prepare for a Corporate Tax Audit in the UAE
Good audit preparation should begin before an FTA request arrives. A structured review can reveal gaps in records, calculations or compliance procedures while there is still an opportunity to address them.
Review Corporate Tax Registration
Check that the business’s Corporate Tax registration information is accurate and reflects its current circumstances.
Reconcile Accounting Records With Tax Returns
Compare the information used in Corporate Tax Returns with the underlying accounting records. Investigate material or unexplained differences.
Review Taxable Income Calculations
Reassess how taxable income was calculated and verify that relevant adjustments are supported by appropriate records.
Check Deductible and Non-Deductible Expenses
Review expense classifications and supporting evidence to identify items that may have received incorrect tax treatment.
Review Related-Party Transactions
Identify relevant related-party and connected-person transactions and assess whether the applicable Corporate Tax and transfer pricing considerations have been addressed.
Verify Supporting Documentation
Check that invoices, contracts, financial records, calculations and other supporting evidence can be located and linked to the relevant transactions or tax positions.
Identify Potential Compliance Risks
Conduct a structured assessment of registration, filing, calculation, documentation and record-keeping practices to identify areas requiring attention.
Prepare for FTA Queries
Establish a clear process for collecting information and preparing accurate responses when the FTA requests records, explanations or additional documentation.
Audit Process
How Does an FTA Corporate Tax Audit Work?
The exact procedure can depend on the nature and scope of the FTA’s review. Businesses should carefully assess each request and ensure that information provided to the authority is accurate, complete and properly supported.
FTA Audit Notification
When the FTA initiates a review, the company should first understand what information has been requested and any applicable response requirements.
Submission of Records and Documents
The business may need to submit financial, accounting, tax and other relevant supporting records. Documents should be organised before submission.
FTA Review and Examination
The FTA may examine the information submitted and raise additional questions where clarification or further evidence is required.
FTA Findings
If the review identifies inconsistencies or issues requiring clarification, the business may need to provide additional explanations, calculations or supporting evidence.
Audit Outcome
The final outcome depends on the circumstances of the case. Where a tax adjustment or compliance action is required, the business should assess the applicable requirements and take appropriate steps.
Audit Risks
Common Corporate Tax Audit Risks for UAE Businesses
Corporate Tax risks can arise when tax reporting is not adequately supported by accounting records or other evidence. Identifying these issues through a professional review can give businesses an opportunity to address potential weaknesses before they become more difficult to manage.
Our Audit Services
Our Corporate Tax Audit Services in the UAE
IncHub provides Corporate Tax audit and compliance support to help businesses understand their tax position, identify potential weaknesses and prepare for FTA requirements.
Our Corporate Tax Audit Process
Initial Consultation
We first understand the business, its activities, structure, accounting practices and relevant Corporate Tax circumstances.
Compliance Assessment
We evaluate the existing Corporate Tax compliance position and identify the areas requiring closer examination.
Document and Record Review
Relevant financial, accounting and tax records are examined to assess whether the reported tax position is adequately supported.
Tax Risk Identification
Potential calculation issues, inconsistencies, documentation gaps and other areas of concern are identified.
Corrective Recommendations
We provide practical recommendations based on the findings of the review and the business’s specific circumstances.
Audit Preparation
Where an FTA review is anticipated, we assist in organising relevant information and preparing supporting documentation.
FTA Audit Support
We support the business with relevant information requests, documentation and communications throughout the review process.
Why IncHub
Why Choose IncHub for Corporate Tax Audit Services?
Effective Corporate Tax support requires more than reviewing figures. Businesses need an approach that connects tax requirements with the financial records and documentation supporting their position.
UAE Corporate Tax Expertise
Our services are built around the UAE’s federal Corporate Tax framework and the compliance considerations relevant to businesses operating in the country.
Compliance-Focused Approach
We focus on identifying gaps in tax reporting, calculations, records and documentation so that businesses have a clearer understanding of their compliance position.
Practical Audit Readiness
Our review process is designed to help businesses identify potential concerns before an FTA review creates additional pressure.
Support for Mainland and Free Zone
We work with businesses operating under different UAE structures and help assess the Corporate Tax considerations relevant to their circumstances.
End-to-End Assistance
Our support can cover compliance assessments, tax return reviews, tax computations, documentation, transfer pricing and FTA audit support.
Confidential Handling
Corporate Tax reviews involve commercially sensitive financial information. We approach client information with appropriate confidentiality and professional care.
Frequently Asked Questions
FAQ
What is a Corporate Tax Audit in the UAE?
A Corporate Tax audit involves reviewing a business’s tax position and the records supporting it to assess compliance with applicable UAE Corporate Tax requirements. An FTA review may consider Corporate Tax Returns, accounting information, financial records, transactions and supporting documents.
Is a Corporate Tax Audit required in the UAE?
An FTA Corporate Tax audit is not an automatic requirement for every UAE business. Companies within the Corporate Tax regime must meet the obligations applicable to them, including relevant registration, record-keeping, filing and payment requirements. Whether a particular audit or review applies depends on the circumstances.
Who can be selected for an FTA Corporate Tax audit?
The FTA administers UAE federal tax legislation and may conduct reviews in accordance with its tax administration and enforcement procedures. Businesses should maintain accurate records and ensure that their reported Corporate Tax position can be properly substantiated.
What factors may lead to an FTA audit in the UAE?
There is no single publicly stated factor that can be treated as the universal trigger for every FTA review. Businesses should focus on maintaining accurate tax filings, consistent financial records and adequate supporting documentation.
What documentation should businesses prepare for a Corporate Tax audit?
The records requested can vary depending on the business and the scope of the FTA review. They may include financial statements, accounting records, Corporate Tax Returns, tax computations, invoices, contracts, bank records, related-party documentation and other evidence supporting the reported tax position.
How do I prepare my business for an FTA audit?
Review your Corporate Tax registration, returns, taxable income calculations, accounting records, expenses, related-party transactions and supporting documentation. A professional audit-readiness assessment can help identify potential gaps and areas requiring attention before an FTA review.
How long should Corporate Tax records be retained in the UAE?
Businesses should comply with the record-retention requirements applicable under UAE tax legislation and maintain records that support their Corporate Tax filings and tax position. The appropriate retention period can depend on the nature of the records and the applicable requirements.
What happens if the FTA finds errors during an audit?
The outcome depends on the nature and significance of the issue. The FTA may request further clarification or evidence, and the review may result in changes to the reported tax position, additional tax liabilities or applicable administrative penalties where provided under the relevant legislation.
Can a tax consultant represent my business during an FTA audit?
A professional tax adviser can assist with reviewing FTA requests, organising records, preparing explanations and supporting communications relating to the review. The scope of assistance or representation depends on the circumstances and applicable procedures.
Do Free Zone companies need to prepare for Corporate Tax audits?
Free Zone businesses should maintain appropriate Corporate Tax records and ensure that their tax treatment is supported by relevant documentation. Businesses relying on Qualifying Free Zone Person treatment should also maintain evidence demonstrating compliance with the applicable requirements.
What are the common Corporate Tax audit risks in the UAE?
Common areas of concern include inaccurate tax calculations, unsupported expenses, incomplete accounting records, differences between financial information and Corporate Tax Returns, related-party transactions, transfer pricing documentation and incorrect Free Zone tax treatment.
How much does Corporate Tax audit support cost in the UAE?
The cost depends on factors such as business size, transaction volume, number of entities, accounting complexity, existing compliance gaps and the extent of FTA support required. A tailored assessment is the best way to determine the appropriate scope and fee.
Get Expert Corporate Tax Audit Support
Corporate Tax Audit Services in the UAE
Being prepared for an FTA review starts with maintaining accurate records, consistent tax reporting and adequate documentation. IncHub helps UAE businesses assess their Corporate Tax compliance position, review supporting records, identify potential risks and prepare for FTA-related requirements.