Definition

A Provisional Tax Assessment is a temporary calculation of a business’s tax liability, issued by the Federal Tax Authority (FTA) when a return is late, incomplete, or requires verification. It is not final and can be revised once the taxpayer submits the required documentation or files the correct return.

Key points

• Issued by the FTA to estimate VAT or Corporate Tax payable.
• Businesses must review, file, and settle outstanding amounts promptly to avoid penalties.
• Can be challenged through a Voluntary Disclosure or objection process.
• Late payment or inaction may trigger fines and interest.

Practical example

If a UAE company fails to submit its VAT return on time, the FTA may issue a provisional assessment based on available data (e.g., past returns or sector averages). The business must correct and confirm its actual liability to avoid further penalties.

Why it matters

Understanding provisional assessments helps businesses avoid unnecessary penalties, maintain compliance, and resolve disputes efficiently with the FTA.