Definition

A VAT Audit is an inspection conducted by the UAE Federal Tax Authority (FTA) to verify that a business is correctly charging, collecting, and paying VAT in compliance with the law.

Key points

• Can be announced or unannounced.
• FTA reviews invoices, ledgers, and VAT returns.
• Non-compliance may result in penalties or backdated tax assessments.
• Businesses must cooperate and provide requested records within the deadline.

Practical example

A trading company receives an FTA notice for a VAT audit covering the past two years. It must submit sales invoices, bank statements, and tax filings for review.

Why it matters

Being prepared for VAT audits helps avoid fines and demonstrates compliance with the FTA.