FTA Audit Checklist for UAE Businesses | Simple Steps to Stay Ready

A VAT audit in the UAE is a formal review of your tax returns and records by the Federal Tax Authority to test VAT compliance. A smart FTA audit checklist keeps invoices, reconciliations and systems ready so an audit feels like a test, not a crisis. It reminds staff to check dates and VAT codes against the right supporting contracts before closing.

Regular use also keeps everyone comfortable with the FTA portal and simple information requests. So audits turn into organised conversations, not rushed searches through boxes and old email threads. 

That relaxed feeling is the real value of preparation.

Quick FTA Audit checklist for UAE

Use this high level FTA audit checklist for UAE as a first filter before diving deeper:

• VAT registration, trade licences and key contracts saved in one place
• VAT returns filed on time, with payment proofs and bank slips
• Trial balance and VAT report reconciled for each tax period
• Clear log of adjustments, credit notes and voluntary disclosures
• Fixed process to answer FTA questions and share records securely

Penalties for poor compliance can run from AED 500 for simple breaches up to several times the tax involved for serious failures, so this basic list already protects real cash.

What The FTA Looks at During a VAT Audit

The Tax Procedures Law lets the FTA audit any person to test their tax position and gives auditors access to premises, documents and electronic records. They usually give at least ten days’ notice, but they can visit without warning in suspected evasion cases.

When an audit starts, officers compare VAT returns to underlying records. That includes tax invoices, contracts, customs paperwork and ledgers. They can ask for explanations on specific entries, sample transactions or the way your ERP generates VAT reports.

A strong FTA audit checklist for VAT treats the audit like a structured walk through your books. Keep every major number in the return to tie cleanly to an invoice trail or a recognised accounting entry.

Building Your FTA Compliance Audit Checklist

This section turns the idea of an FTA compliance audit checklist into four concrete work areas. Keep these points tight and practical.

Customer invoicing and output VAT

Check that every taxable sale has a compliant VAT invoice, with TRN, VAT amount and clear tax treatment. Time of supply rules must match invoice dates and return periods. Late invoices create timing gaps that auditors question fast.

Supplier invoices and input VAT

Confirm that input VAT is only claimed on invoices with the supplier’s TRN, your correct name and the right tax amount. High risk areas include staff entertainment and motor costs where VAT can be blocked or limited under FTA guidance.

Imports, exports and customs links

Match import VAT on customs records to your VAT returns. For zero rated exports, keep shipping documents and proofs of export. Missing customs links are one of the quickest paths to assessments and backdated penalties in an audit.

Adjustments, credit notes and disclosures

Keep a clear log for credit notes, rate corrections and voluntary disclosures. Where past errors can been corrected, store FTA receipts and bank proofs together. Auditors look closely at these areas to see if issues keep repeating.

Records and Evidence to Keep Ready

A practical FTA audit checklist for businesses does not stop at invoices. Your team should have these support items ready as well:

• Chart of accounts that shows which ledgers carry VAT related balances
• Copies of contracts for long term projects and agency arrangements
• Stock movement reports for traders who hold significant inventory
• Payroll files and staff lists where company cars or benefits sit in scope
• Board minutes or management approvals that explain major changes

Under current rules, audits can usually look back five years, with longer periods in certain refund or evasion cases. That makes long term record storage and clear digital filing essential.

Internal Habits That Help Firms Stay Audit Ready

Good habits matter more than one off cleanups. Build these into your routine:

Close Each Period Properly

Good habits matter more than one off cleanups. Start by closing each tax period with a VAT reconciliation between returns and the trial balance. Match output VAT to sales accounts and input VAT to purchase ledgers, then tie the net figure to the payment or refund on the FTA portal. When differences appear, fix them in the same month so errors never snowball across several returns.

Watch Reports and Counterparties

Next, run exception reports for negative VAT lines, odd tax codes and manual journal entries that touch VAT balances. These are the places auditors usually probe first. Review top customers and suppliers twice a year to re-check TRNs, contract terms and tax treatment on major deals. A short review now is cheaper than explaining a mis-coded long term contract during an audit.

Share Knowledge Inside The Team

Finally, make your FTA audit checklist part of team training. Keep notes on how VAT reports are pulled and stored. Train at least two staff members on FTA portal use and reconciliations so access never depends on one person. Then holidays, resignations or sick days do not create gaps when an audit letter arrives.

How Arnifi Helps With FTA Audit Preparation

Arnifi can help finance teams by translating FTA rules into simple checklists and reconciliations. That support ranges from testing sample invoices to mapping how your ERP pushes data into VAT returns. 

Arnifi also helps build a practical FTA audit checklist that links VAT, corporate tax and excise so one review covers all UAE tax lines, instead of separate fixes each year.

FAQs

1. How much notice does the FTA give before a VAT audit?

The FTA usually gives at least ten days’ written notice before a tax audit, although surprise visits are allowed in suspected evasion cases under the Tax Procedures Law.

2. How long should a UAE business keep VAT records?

Most businesses should keep VAT records for at least five years so they can handle audits and assessments linked to older periods without gaps in invoices or ledgers.

3. What documents are checked first in an FTA VAT audit?

Auditors usually start with VAT returns, tax invoices, trial balances and customs papers, then move to contracts and detailed ledgers once early reconciliations show where risk may sit.

4. Which mistakes trigger the largest VAT penalties?

Big penalties often arise when VAT is underpaid on sales, when invoices are missing or when errors repeat over many periods, leading to large tax differences plus monthly penalty percentages.

5. How often can the FTA audit the same business?

There is no set limit on audit count. The FTA can review a business again if new information appears or if refund claims and voluntary disclosures raise fresh questions on past periods.