For many SMEs in the UAE, just the thought of an FTA tax audit sounds very overwhelming and complicated.

Since the audit isn’t just limited to VAT, your corporate tax records, invoices, and compliance reports may also be reviewed. Tax authorities aren’t out to punish or fine you for no reason, but they will expect your records to be clear, accurate, and neatly kept.

This is the reason why an audit doesn’t have to be stressful or overwhelming if you’re well prepared and organized beforehand. With Simpla.ai keeping your VAT and corporate tax records in order all year-round, you can face an FTA audit any day of the year. 

Here’s a simple step-by-step guide to help you get ready.

1. Key Documents the FTA Reviews During Audits in UAE

The Federal Tax Authority in the UAE will review:

• VAT returns and payment records

• Corporate tax filings

• Sales and purchase invoices

• Import and export documentation

• Bank statements and ledgers

• Your chart of accounts and bookkeeping records

They may go back a few years, so it’s not enough to only keep the last quarter’s data tidy, especially since VAT compliance UAE rules require businesses to maintain complete records for multiple years.

2. Record-Keeping for Corporate Tax Compliance for SMEs

Audits are rarely announced months in advance. Sometimes you’ll only get a short notice period. The best approach is to:

• Store invoices digitally and in chronological order

•  Reconcile bank statements monthly

• Keep VAT codes accurate in your accounting system

• File tax returns in the exact required format to stay aligned with corporate tax compliance UAE standards.

• Save all correspondence with tax authorities

Tools like Simpla.ai store all your invoices, returns, and correspondence in one secure dashboard, so you don’t have to search through folders during an audit.

3. VAT Compliance Requirements in the UAE

In the UAE, VAT laws are similar but not identical. Since the UAE applies 5% VAT, you would essentially need to make sure that each tax filing follows the distinct rules of the country. This is of course if your business operates in more than one country.

A quarterly VAT review can help you:

• Spot missing VAT codes

• Correct any misclassified transactions

• Ensure input and output VAT amounts match reported figures

With Simpla.ai, VAT reviews become faster as the system automatically flags missing VAT codes and mismatched figures before you file, working as your built-in VAT automation software UAE solution.

4. What to Check for Corporate Tax Filing Before an Audit

If your business is above the taxable income threshold, the auditor will expect your corporate tax filings to be flawless, which is why many companies turn to SME tax automation UAE solutions for accuracy. That means:

• All profits and allowable deductions are properly recorded

• The right tax rate is applied based on ownership structure

• All supporting documents are ready to back up reported figures

5. How to Train Your Finance Team for Audit Readiness

Often, the panic during audits isn’t because the company is non-compliant, it’s because employees don’t know where the documents are.

Make sure your finance team knows:

• How to retrieve past returns and invoices

• The standard filing and storage process

• Who will communicate with the FTA during the audit?

6. How AI Tools Keep Your SME Audit-Ready

Instead of scrambling at the last minute, AI accounting software like Simpla.ai can:

• Flag missing VAT codes before filing

• Keep documents in the exact FTA-required format

• Track filing deadlines automatically

• Prepare reports that auditors can review without delays, simplifying AI VAT filing

Don’t wait until the FTA comes knocking? Keep your VAT and corporate tax filings audit-ready every day. Start your free 14-day trial with Simpla.ai now.

FAQs

Do all SMEs in the UAE face FTA audits?

Not always. Audits can be random or triggered by discrepancies in filings. Larger businesses are more frequently audited, but SMEs are not exempt.

What happens if the FTA finds mistakes?

Depending on the issue, you could face penalties, back taxes, or interest charges. In severe cases, it may affect your business license.

How long should I keep my records?

In the UAE, you must keep VAT and tax records for at least 5 years.