Responding to a UAE Federal Tax Authority (FTA) tax audit costs AED 0 in official fees — the FTA charges nothing for the audit itself, for the records you supply, or for the outcome if no error is found. The real costs are your own: assembling five years of records on short notice, professional adviser fees if the position is complex, and the settlement bill — tax plus penalties — if the audit finds an underpayment. A business with clean, current books can answer an audit from its own desk; one with messy records pays in time, adviser fees and, potentially, the highest penalty rates in the tax system.
TL;DR
- The FTA charges no fee for a tax audit, the notification, or the review of your records.
- A tax audit notification gives you at least five business days to prepare.
- Records must be kept for at least five years after the end of the tax period.
- If the audit finds underpaid tax, settlement covers the tax plus late-payment penalties (14% per annum on VAT/Excise; AED 500/month late-return penalties).
- The only mandatory external cost is advice you choose to buy — there is no official tariff.
What the audit itself costs: nothing
The FTA's audit powers come from Federal Decree-Law No. 28 of 2022 on Tax Procedures: the Authority notifies a person that it will conduct a tax audit, then examines records at the person's premises or requests them at the FTA. No service fee applies to any part of this. If the audit concludes the records are correct, the process ends with no payment due — the total cost to the business is the staff time spent producing documents.
The timeline is tight but known: the FTA must notify at least five business days before the audit start, and the audit proceeds from there. The five-day window is the preparation clock — businesses that keep current books can satisfy it; businesses that reconstruct records from bank statements cannot.
Where the real costs come from
| Cost item | When it applies | Amount | Source |
|---|---|---|---|
| Audit, notification and review | Always | AED 0 | Tax Procedures Law — no service fee |
| Record production | Audit window | Staff time — 5+ years of invoices, returns, ledgers | Tax Procedures Law, Art. 25 |
| Professional adviser fees | Optional, complexity-dependent | Varies by provider | No official tariff |
| Underpaid tax found | Audit assessment | The assessed amount, due in full | Tax Procedures Law assessment rules |
| Late-return penalties on corrected filings | If the audit shows unfiled or incorrect returns | AED 500 per month (VAT/Excise regime) or per CD 75/2023 for corporate tax | Cabinet Decision No. 40 of 2017 / No. 75 of 2023 |
| Late payment on assessed tax | If not settled on the due date | 14% per annum (VAT/Excise) charged on the same date monthly | Cabinet Decision No. 40 of 2017, Table 1, item 8 |
The settlement exposure is the whole story. An audit that finds AED 50,000 of underpaid tax also finds the penalties that would have applied to it: the late-payment clock and, where returns were wrong, the incorrect-return penalties. Under the amended penalty framework (Cabinet Decision No. 40 of 2017 as amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026), certain penalties apply at double the stated amount when the violation is repeated within five years — the maximum rate the system imposes.
The five-day preparation sprint
Five business days is enough only if the underlying records exist. What the FTA expects, per its audit guidance and the record-keeping rules:
- Invoices, credit notes and contracts for the periods under review
- Filed VAT, Excise and corporate tax returns reconciled to the ledgers
- Bank statements matching declared revenues
- For free-zone companies, qualification evidence supporting the 0% corporate tax rate
Businesses outsourcing their bookkeeping answer most of an audit from the provider's records. Businesses reconstructing history face a genuine bill here — either days of internal effort or adviser fees — before the FTA even arrives.
The penalty exposure if something is found
The audit itself is free; the outcome is priced. The main exposures, all under the current penalty framework:
- Late payment: 14% per annum on the unpaid tax, charged on the same date monthly — 5% on the first month plus 1% for each further month under the amended table.
- Incorrect returns: AED 500 under CD 75/2023 for a wrong corporate tax return, or AED 1,500 for an incorrect VAT return under the amended CD 40/2017 table.
- E-commerce marketplace liability: where the audit finds an unregistered online seller, the marketplace can be jointly liable for the tax — a 2026 change under Cabinet Decision No. 126 of 2024 that widens who pays when registration was skipped.
Businesses can dispute an outcome through a reconsideration request (free to file, up to 45 business days for a response) or a tax objection — the dispute path costs staff time, not fees.
Questions businesses ask when the audit letter arrives
Does the FTA charge for a tax audit?
No. Notification, the audit itself and the outcome review are all free. Costs arise only from your own preparation and any settlement the audit finds due.
How much time do I get before an FTA audit?
At least five business days' notice before the audit begins, per the Tax Procedures Law. The audit can extend considerably beyond that.
What does it cost if the audit finds unpaid tax?
The assessed tax plus the applicable penalties — 14% per annum on late-paid amounts, plus incorrect-return penalties where filings were wrong. Under the amended framework, repeat violations within five years double certain penalties.
Can I dispute an audit result?
Yes — a reconsideration request is free to file on EmaraTax, with the FTA responding within around 45 business days, or a formal tax objection can be lodged.
FAQ
How much does it cost to respond to an FTA tax audit in the UAE?
The audit process itself is free. Costs come from record preparation, optional adviser fees, and any tax plus penalties the audit finds due.
How much notice does the FTA give before an audit?
At least five business days, per Federal Decree-Law No. 28 of 2022 on Tax Procedures.
How far back can an FTA audit go?
Records must be kept for at least five years after the end of the tax period, and the audit can examine any period within that retention window.
What penalties apply if an audit finds underpaid tax?
Late payment at 14% per annum charged monthly, plus incorrect-return penalties where applicable — under Cabinet Decision No. 40 of 2017 as amended (effective 14 April 2026) and Cabinet Decision No. 75 of 2023.
One last thing
The cheapest audit response was bought years earlier: books reconciled monthly, returns filed on the numbers, and records retained the full five years. In that position an audit notice costs a few days of staff time and nothing else. Without it, the five-day window forces adviser fees and the settlement bill can reach the doubled repeat-violation penalties. Talk to Finanshels — Finanshels is an FTA Registered Tax Agency handling audit responses and record-keeping for businesses across the UAE.
