Tax Assessment Review in UAE 

Tax assessments are complex, and mistakes in tax decisions or administrative fines can have serious ramifications for taxpayers. The UAE has developed an optional tax assessment review system under Federal Decree-Law No. 28 of 2022. This approach allows taxpayers to protest claimed Common mistakes in tax assessments and penalties before further escalation. This blog outlines the basic concepts, eligibility requirements, and processes for making a review request, assisting taxpayers in understanding their rights and the choices available for fair appraisal.

What is Tax Assessment Review? 

Taxpayers can challenge errors in tax assessments and administrative fines levied by the Federal Tax Authority (FTA) through the Tax Assessment Review process. Through this procedure, a taxpayer can request an independent evaluation from FTA officials who were not engaged in the first audit, ensuring an unbiased and fair tax review of the assessment. This process excludes the introduction of new evidence and instead depends only on the data and records that were provided during the original audit.

Reasons for Reevaluating Tax Assessments

To be eligible for a Tax Assessment Review, taxpayers must provide specific and legitimate justifications. The following are some common explanations that could require reconsideration:

• Technical Issues: Taxpayers can request a review of tax laws, treaties, or processes that were misapplied.
• Variations in tax calculations that led to incorrect tax assessments or penalties are justified.
• Procedure errors: If the FTA utilized questionable data or breached audit rules, a review may be warranted.
• Restrictions Transgression: Tax audit notices more than five years after the relevant tax period.
• If the FTA audited or assessed the taxpayer without notification.
• The FTA assessed taxable supply and charged taxes using unreliable outside data.
• Failure to Request Supplementary Information: the FTA may have compromised the audit by failing to request essential information or proof.
• Certain transactions have tax treatment mistakes due to poor audit methods or missing documents.
• Tax Assessments: Periods not in the tax audit notification are assessed.

Note: The review method precludes adding new information or supporting documents not included in the first audit. Taxpayers should request reconsideration for further information.

How to File a Request for a Tax Assessment Review?

A request for a Tax Assessment Review may be submitted to the FTA by qualified taxpayers. The following methodical approach will ensure a smooth submission:

• Submission Deadline: After obtaining the tax assessment and related administrative penalty letter from the FTA, taxpayers have 40 working days to submit their review request.
• Application Requirements: The request must include supporting documentation that was previously available during the audit, as well as a description of the review’s justification.
• Submission Email: Email inquiries can be sent to [email protected].
• Extension of the Deadline: A taxpayer may request an extension from the FTA if their circumstances prevent them from meeting the 40-day restriction. This is only possible if valid explanations are offered, including unforeseen delays or mitigating circumstances.

The Process of Making Decisions and Reaction The FTA’s Timeline

When a taxpayer submits a review request, the FTA will evaluate it within a certain period of time, using all of the data that was provided during the first audit. Expect the following:

• Response Timeline: Within 40 business days of receiving the application, the FTA plans to review the request and render a decision. The FTA will notify the taxpayer of the extension if further time is required.
• Notification of the Choice: After the decision is made, the applicant will receive notification from the FTA within five business days.

Possible Outcomes

• Refusal of Request: If procedural requirements—such as missing deadlines or introducing new material—are not met, the FTA may reject the request.
• Changes to the Tax Assessment: The FTA may change the tax assessment or associated penalties to appropriately reflect the precise amount if it finds any disparities.
• Confirmation of the First Assessment: The first tax assessment and penalty will remain in effect if the FTA finds no differences.

Next Steps in the Event of an Unsatisfactory Review Outcome

Taxpayers have the option to request a reconsideration if they are unhappy with the outcome of their Tax Assessment Review or if the FTA does not reply by the deadline. Through this reevaluation, taxpayers are able to provide additional data and proof that might not have been available at the time of the original audit. To request reconsideration, taxpayers must do the following:

1. Send in the Request: Within 40 business days of receiving the Tax Assessment Review decision, or within the relevant extended term, the reconsideration request must be made.
2. Add New Evidence: The reconsideration process, as opposed to the review, allows for the incorporation of more supporting documentation or evidence.

How Audit Firms in Dubai Can Help You? 

Our team of seasoned tax professionals at Corporate Tax UAE is skilled in helping you with the Tax Assessment Review and Reconsideration procedure. Based in the United Arab Emirates, we specialize in providing tailored support to help clients properly express their claims, manage necessary documentation, and address any procedural or technological issues that may arise. We are committed to helping customers achieve fair tax outcomes and guaranteeing compliance by applying our understanding of UAE tax laws.