For businesses familiar with the stringent tax penalty regime in the UAE, the term “tax audit” often invokes feelings of fear, doubt, and anxiety. While these emotions are natural, understanding the dos and don’ts of navigating a tax audit can significantly influence how a business responds to the Federal Tax Authority (FTA) and, in turn, impact the outcome of the audit.

The introduction of Corporate Income Tax (“CIT”) in the United Arab Emirates (“UAE”) has been a pivotal moment in the country’s continuous development. Historically, the UAE operated as a jurisdiction where no federal corporate income tax (CIT) was applicable.