Tax Assessment

A business files a VAT return but the FTA later identifies a discrepancy, and the authority may issue a tax assessment to determine what it considers due. Management must read the notice, evidence and applicable response route rather than treating it as another invoice.

The UAE Tax Procedures Law defines a Tax Assessment as a decision issued by the FTA in accordance with its specified articles, and Article 23 can address payable or refundable tax and other matters prescribed by tax law or executive rules. The listed cases include missed registration, failure to file or pay, an incorrect return and tax shortfalls connected with evasion.

An assessment can also be estimated when actual due tax or return correctness cannot be determined, with amendment if relevant information later surfaces. An audit is one route by which information may be discovered, not the only route, and not every assessment proves fraud, so the taxpayer should examine the specific reason the FTA gives under its governing process.

Administrative penalties have a separate assessment provision in Article 24, so a notice may involve both tax and penalties whose amounts and legal grounds should be read separately. Adding every number in a notice without checking credits or prior payments can overstate the net balance.

On receipt, identify the taxpayer, tax type, period, amount and notification date, check that the notice is genuine through the official portal and not a payment link copied from an unverified message, and assign one person to manage deadlines. Reconcile the assessment to returns and the general ledger by asking which sales or costs the authority adjusted and whether the difference is tax, interest or penalty.

Preserve the audit trail rather than changing old books silently to fit the decision. If facts are missing, gather invoices, contracts, bank records and previous correspondence, because a response that says "we disagree" without showing the transaction and rule is unlikely to help, and seek qualified tax advice for a material or uncertain amount.

Article 28 provides an optional route to request review of a tax assessment or part of it and related penalties within 40 business days of notification, and it requires reasons. The law then provides reconsideration and committee objection stages with their own rules.

Article 29 separately provides reconsideration of an FTA decision within 40 business days of notice, and a person cannot run overlapping assessment review and reconsideration in a way the law disallows, so choose the route after reading current law and the notice. An objection before the Tax Disputes Resolution Committee has further conditions, including a prior reconsideration and rules on payment of tax, so do not promise that merely filing an appeal suspends collection or that all deadlines run from the same event.

The latest consolidated English FTA text available labels itself an unofficial translation and the law has amendments, so for a real dispute check the operative Arabic text, current portal procedure and any valid extension rules with a specialist. Retain the official decision and delivery evidence, since a later dispute about a deadline may depend on when the business was notified, not when an employee happened to read an internal email.