How long can the FTA audit my tax records?

Article 56 – Record Keeping 1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shall maintain all records and documents for a period of (7) seven years following the end of the Tax Period to which they relate that: a. Support the information to be provided in a Tax Return or in any other document to be filed with the Authority. b. Enable the Taxable Person’s Taxable Income to be readily ascertained by the Authority. 2. Notwithstanding the provisions of the Tax Procedures Law, an Exempt Person shall maintain all records that enable the Exempt Person’s status to be readily ascertained by the Authority for a period of (7) seven years following the end of the Tax Period to which they relate.

ُ .نهايةُالفترةُالضريبيةُذاتُالصلة expiration of 5 years from the end of the relevant tax period. As an example, the tax period from July 2022 to ُ2022ُُبالنسبةُللفترةُالضريبيةُمنُيوليو،علىُسبيلُالمثال September 2022, with the related tax return to be ُُالتيُيتمُتقديمُاإلقرارُالضريبيُالمتعلق،2022ُإلىُسبتمبر filed no later than 28 October 2022, generally ُُالُيمكنُعمومً ا،2022ُُأكتوبر28ُبهاُفيُموعدُالُيجاوز cannot be subject to a tax audit or the issuance of ُلتلكُالفترةُالضريبيةُأنُتخضعُللتدقيقُالضريبيُأوُأنُيتم a tax assessment after 30 September 2027. ُ .2027ُُسبتمبر30ُإصدارُتقييمُالضريبيُبشأنهاُبعد As an exception to the general rule, the FTA may ُ ُيجوز ُللهيئة ُإجراء ُتدقيق،واستثنا ًءُ ُمن ُالقاعدة ُالعامة conduct a tax audit or issue a tax assessment to the ُضريبي ُأو ُإصدار ُتقييم ُضريبي ُللخاضع ُللضريبة ُبعد taxable person after 5 years from the end of the ُ) ُخمس ُسنوات ُمن ُنهاية ُالفترة ُالضريبية ُذات5(ُ مرور ُ :الصلةُوذلكُفيُالحاالتُاآلتية relevant tax period in the following instances: − If the FTA notified the taxable person of the tax ُإذا ُقامت ُالهيئة ُبتبليغ ُالخاضع ُللضريبة ُبالتدقيق − audit before the expiry of the 5-year period, ُُعلىُأن،)ُالخمسُسنوات5(ُالضريبيُقبلُانقضاءُمدة provided that the tax audit is completed or the ُ،يتمُإتمامُالتدقيقُالضريبيُأوُإصدارُالتقييمُالضريبي tax assessment is issued, within 4 years from ُ) ُأربع ُسنوات ُمن ُتاريخ ُالتبليغ ُبالتدقيق4(ُ خالل the date of the notification of the tax audit. ُ ُ.الضريبي ُ :ًُفمثال For example: If the FTA notified the taxable person on 23 ُ ُديسمبر23ُ إذاُأبلغت ُالهيئةُالخاضعُللضريبةُبتاريخ December 2022 that it will audit the tax periods ُُبأنهاُستقومُبالتدقيقُعلىُالفتراتُالضريبيةُلعام2022 of 2018, this tax audit must be completed, or ُُفيجبُإكمالُهذاُالتدقيقُالضريبيُأوُإصدار،2018 the relevant tax assessment must be issued, ُ .2026ُُديسمبر23ُُقبل،التقييمُالضريبيُذوُالصلة before 23 December 2026. − If the person submitted a voluntary disclosure ُإذا ُقام ُالشخص ُبتقديم ُتصريح ُطوعي ُفي ُالسنة in the fifth year from the end of a tax period, ُ ُعلى ُأن ُيتم ُإتمام،الخامسة ُمن ُنهاية ُفترة ُضريبية provided that the tax audit is completed or the ُُخاللُسنة،التدقيقُالضريبيُأوُإصدارُالتقييمُالضريبي tax assessment is issued, within one year from the date of submission of the voluntary disclosure. 10/17 ُ .واحدةُمنُتاريخُتقديمُالتصريحُالطوعي −

Article 16 – The Right of the Authority to Perform a Tax Audit 1. The Authority may perform a Tax Audit on any Person to verify the extent of that Person’s compliance with the provisions of this Decree-Law and the Tax Law. 2. The Authority shall notify the Person of a Tax Audit at least (10) ten Business Days prior to conducting the Tax Audit. 3. The Authority may perform the Tax Audit at its premises or the place of Business of the Person subject to the Tax Audit or any other place where such Person conducts Business, stores goods or keeps records. 4. By way of exception to Clause 2 of this Article, the Tax Auditor may enter, without prior Notification, any place where the Person subject to the Tax Audit conducts his Business, stores goods or keeps records, and may temporarily close such place in order to perform the Tax Audit for a period not exceeding )72) seventy-two hours in any of the following cases: a. If the Authority has serious grounds to believe that the Person subject to the Tax Audit is participating or involved in Tax Evasion in respect of any of his or any other Person’s obligations imposed under this Decree-Law or the Tax Law; b. If the Authority has serious grounds to believe that not temporarily closing the place where the Tax Audit is conducted will hinder the conduct of the Tax Audit; c. If the Person who has been given advance notice of the Tax Audit under Clause 2 of this Article attempts to stop the Tax Auditor from entering the place where the Tax Audit is to be performed. 5. In all cases stipulated in Clause 4 of this Article, the Tax Auditor must obtain the prior written consent of the Director General or person acting on his behalf, and if the place to be accessed is a place of residence then a permit from the Public Prosecution must also be obtained. 6. Places closed under this Article shall be reopened upon the expiration of (72) seventy-two hours, unless the Authority obtains a permit from the Public Prosecution to extend the closure period for a similar period prior to the expiry of the period mentioned in this Article. 7. The Executive Regulation shall determine the necessary procedures related to the Tax Audit. Federal Decree-Law No. 28 of 2022 and its amendments – As published by the Ministry of Finance 11

15.2.3. Will businesses be informed of the audit before it takes place? The FTA will usually inform the taxable persons of the audit 5 business days in advance, however no notice will be given in cases of suspected tax evasion, or if to do otherwise would hinder the conduct of the audit. 15.3. What can a business expect to happen during a tax audit? The relevant FTA officer(s) can inspect the taxable person’s documents, assets and/or premises with a view to confirming the taxable person’s VAT position. The tax auditor may want to talk to persons from various parts of a business, for example this could be members of the finance team to confirm how the tax return is calculated, or a person in logistics to confirm the process for importing goods, etc. The tax auditor may also remove documents, items, or samples for further review. The amount of time required for the audit will depend on the size of the business and the complexity of the tax affairs. The results of the audit shall be notified to the taxable person within 10 business days of the end of the audit. 15.3.1. What level of conduct is required from the taxable person? Any person subject to a tax audit (including their tax agent, or legal representative), must offer full facilities and assistance to the tax auditor in order for the auditor to carry out the audit. For example, upon receiving notice of a scheduled audit, the taxable person should ensure:    the relevant premises are accessible; tax records are accessible; and relevant staff are present (for example the person responsible for compiling the tax return). If the taxable person fails to provide adequate facilities and assistance they may be subject to penalties. 15.4. What powers will the FTA have during a tax audit? In order to confirm the taxable person’s VAT position, the tax auditor may, subject to certain rules and restrictions:   55 request original records or copies of documents (or request records or information from third parties in respect of checking the person’s tax position); and take samples. VAT Guide | Taxable Person | VATG001