UAE Tax Audits Rise 46% as FTA Expands Data-Driven Compliance Reviews

The UAE Federal Tax Authority (FTA) recorded a 46% increase in tax audit and review cases in 2025 compared with 2024, according to its Annual Report 2025 published on 29 June 2026. The total value of assessed taxes rose by 66%, while total assessments for taxes and administrative penalties combined increased by 67%. In addition, tax revenue generated from audit activities climbed by 33.9%.

According to the report, the FTA utilized predictive analytics to monitor approximately 400,000 registered taxpayers. The authority's audit activities covered 16 commercial sectors across small, medium-sized, and large enterprises. The Tax Audit Department carried out 14 targeted projects focused on sectors with identified compliance risks, including e-commerce platforms, construction, automotive companies, and digital content creators.

Auditors are conducting cross-tax reviews to identify inconsistencies across filings and data sources. This involves cross-checking VAT returns against general-ledger turnover, input tax deductions against purchase records, customs declarations against import VAT, corporate tax revenue against VAT-reported supplies, and financial statements against both VAT and corporate tax returns.

The publication highlighted that zone-based businesses face specific scrutiny regarding whether legal and operational conditions are met. This includes examining formal zone status, inventory and gate records, customs import and export declarations, transport documents, and proof of commercial substance under corporate tax rules.