FTA Inspection Process
Overview
The FTA may conduct a tax audit to verify compliance with Corporate Tax law. Audits can be desk-based or field audits.
Audit Triggers
- Random selection
- Risk-based selection (e.g., large deductions, consistent losses)
- Industry-wide reviews
- Tips or referrals
Audit Process
- Notification — FTA issues an audit notice specifying scope and period
- Information request — FTA requests documents and records
- Review — FTA reviews documents and asks questions
- Preliminary findings — FTA shares initial findings
- Taxpayer response — opportunity to clarify or correct
- Final assessment — FTA issues a tax assessment (if applicable)
- Appeal — taxpayer may appeal via TAR or TDRC
How to Respond
- Cooperate fully with the FTA
- Provide requested documents promptly
- Designate a single point of contact
- Seek professional advice
- Maintain confidentiality of sensitive information
Your Rights
- Right to be informed of the audit scope
- Right to provide explanations
- Right to request additional time (in reasonable cases)
- Right to appeal the final assessment
Best Practice
- Maintain an audit-ready audit pack at all times
- Conduct internal reviews before an audit
- Document all communications with the FTA