In 2025, VAT audits in the UAE have become more data‑driven, frequent and integrated with corporate tax and customs data, as the Federal Tax Authority (FTA) sharpens its focus on high‑risk businesses and sectors. Many companies that have been compliant on paper are now being asked to prove their VAT positions with detailed reconciliations, electronic audit files and robust documentation.​

This guide explains what a VAT audit in the UAE is, the latest VAT audit trends and triggers in 2025, the documents the FTA typically requests, and a practical VAT audit preparation checklist so your business is ready before an audit notice arrives.​

What is a VAT audit in the UAE and how does it work?

A VAT audit in the UAE is an official inspection by the Federal Tax Authority to verify that the VAT you have reported, paid and recovered is accurate and supported by proper records. During an audit, FTA officers review your VAT returns for specific periods and cross‑check them against tax invoices, accounting records, customs declarations, contracts and bank statements.​

An audit may be conducted on‑site at your premises or as a desk‑based review, and can cover multiple tax periods depending on the risk profile and potential issues identified. At the end of the review, the FTA may issue an audit report confirming compliance or assessing additional VAT, penalties and interest if discrepancies are found.​

Latest VAT audit trends in the UAE in 2025

VAT audits in 2025 are increasingly driven by analytics, with the FTA using EmaraTax data, customs information and third‑party sources to identify inconsistencies in reported sales, purchases and input tax claims. Businesses with unusual refund patterns, frequent voluntary disclosures, or large swings in taxable versus exempt supplies are more likely to be flagged for review.​

Audits are also becoming more integrated, with VAT checks linked to corporate tax, customs and economic substance reviews to ensure a consistent picture across all tax obligations. This means that gaps between your VAT returns, financial statements and corporate tax filings can quickly attract attention if they are not properly explained and documented.​

Common VAT audit triggers in the UAE

While any registered business can be selected for a VAT audit, certain patterns increase the risk of being chosen. Typical VAT audit triggers in the UAE include:​

• Large or repeated VAT refund claims compared with the size and nature of the business.​

• Frequent corrections, voluntary disclosures or amended VAT returns that change liabilities or refunds.​

• Significant mismatches between VAT returns and customs import/export data or financial statements.​

• High levels of input tax recovery in sectors where exemptions or restrictions are common, such as real estate, financial services or mixed‑use activities.​

• Late VAT return filings, late payments or a history of administrative penalties for non‑compliance.​

VAT audit preparation checklist for UAE businesses in 2025

The strongest defence in a VAT audit is year‑round audit readiness built on clean records, reconciliations and clear processes. Use this practical checklist to prepare your business:​

• Keep all VAT‑related records (tax invoices, credit/debit notes, VAT returns, contracts, customs documents and ledgers) organised and accessible for at least the required retention period.​

• Reconcile VAT returns with accounting records and bank statements regularly so that sales, purchases and VAT balances match before the FTA asks for explanations.​

• Review input tax claims, zero‑rated and exempt supplies and high‑risk areas such as discounts, bad debts and imports to ensure eligibility and correct treatment.​

• Ensure your accounting system can generate the reports or electronic audit file (such as an FTA audit file) that the FTA may request in CSV or similar format.​

• Assign a tax lead or FTA‑registered tax agent to coordinate responses, manage timelines and communicate with the FTA during any audit.​

• Train key staff on how to respond to FTA queries, what information can be shared and how to document explanations for any unusual or complex transactions.​

How long should you keep VAT records in the UAE?

Businesses must keep VAT records, including tax invoices, contracts, accounting books and relevant correspondence, for at least the minimum retention period set out in the UAE VAT Law and Tax Procedures Law. For many businesses this is typically five years from the end of the tax period, and up to fifteen years in some real estate or capital asset cases.​

Keeping complete and well‑organised records for the full retention period is essential, because the FTA can request information and conduct audits relating to past periods within the applicable time limits. If records are missing or incomplete, the FTA may disallow input tax, challenge zero‑rated or exempt treatments, or estimate liabilities based on available information.​

Conclusion: Be audit‑ready before the FTA calls

VAT audits in the UAE are no longer rare, one‑off events but a regular part of the FTA’s enforcement strategy, especially as VAT, corporate tax and customs data become more integrated in 2025. Businesses that invest in strong VAT governance, reconciliations and documentation will find most audits become routine confirmations rather than stressful surprises.​

If your business wants to assess its VAT audit readiness, test its records against FTA expectations or prepare for a potential audit, STH Financial can support you with VAT health checks, mock audits and ongoing compliance support tailored to your sector. Contact our VAT team to schedule a 2025 VAT audit readiness review and reduce the risk of costly findings in a future FTA audit.