Tax assessments and administrative penalty assessments issued by the UAE Federal Tax Authority can have significant financial consequences. Although these decisions are legally binding, UAE law provides a structured process to challenge them, provided that strict deadlines and procedural conditions are met.
This article explains the key procedures, timeframes and authorities involved in challenging FTA decisions, in accordance with Federal Decree-Law No. 28 of 2022 on Tax procedures and cabinet resolution No. 74 of 2023 on its executive regulations.
Challenges may proceed through several administrative and judicial stages before the Federal Tax Authority, the Tax Dispute Resolution Committee and the UAE Federal Courts.
Accessing FTA audit documents
A taxpayer subject to a tax audit has the right to request the documents, data and information on which the FTA based its assessment of tax and penalties.
To exercise this right, an application must be submitted using the form specified by the FTA within twenty (20) Business Days from the date of the notification of the tax audit results or FTA Orders, in accordance with:
- Article 22 of the Tax Procedures Law; and
- Article 19 of its Executive Regulations.
Key procedures to challenge FTA orders
a) Procedures before the Federal Tax Authority
1. Review request (Optional)A taxpayer may submit a Review Request to the FTA for a formal review of a Tax Assessment and related Administrative Penalty Assessment.
- Deadline: within forty (40) Business Days from the date of receiving the FTA Order.
- The request must clearly state the reasons for seeking the review.
2. Reconsideration request
A taxpayer may submit a Reconsideration Request to the FTA for a formal reconsideration of a Tax Assessment or Administrative Penalty Assessment.
- Deadline: within forty (40) Business Days from the date of receiving the FTA Order or the Review Order.
- The request must clearly state the reasons for reconsideration.
The FTA must issue a decision within forty (40) Business Days and must notify the taxpayer within five (5) Business Days of issuing the decision (“Reconsideration Order”).
If a Review Request is still in progress, the Reconsideration Request may only be submitted after the Review Order has been issued.
b) Procedures before the tax dispute resolution committee
3. Objection to the TDRC
A taxpayer may file an objection before the Tax Dispute Resolution Committee (TDRC) if:
- they disagree with the Review Order or Reconsideration Order; or
- the FTA fails to issue a Reconsideration Order.
- A reconsideration Request must have been previously submitted.
- The disputed tax must be fully paid.
- The objection must be submitted within forty (40) Business Days from the date of receiving the Reconsideration Order.
The TDRC must issue a decision within twenty (20) Business Days and must notify the taxpayer within five (5) Business Days of issuing the decision (“TDRC Order”).
For disputes below AED 100,000, the TDRC Order is final and treated as a Writ of Execution.
c) Procedures before the UAE Federal Courts
4. Judicial appeals
Either party may file an appeal against a TDRC Order before the Federal Court of First Instance (CFI) if the dispute exceeds AED 100,000.
- Deadline: within forty (40) Business Days from receiving the TDRC Order, or from the date on which the TDRC failed to issue a decision.
- The taxpayer may also appeal if the TDRC does not issue a decision.
- Full payment of the disputed tax.
- Payment of 50% of the administrative penalties imposed by the FTA.
Either party may then file an appeal before the Court of Appeal within thirty (30) days from the date of the CFI judgment. Judgments issued by the Court of Appeal are final and binding for disputes exceeding AED 100,000 and below AED 500,000.
A second appeal may be filed before the Federal Court of Cassation within thirty (30) days from the date of the Appeal Court judgment, but only for disputes exceeding AED 500,000.
Conclusion
Challenging FTA Orders is a structured process that requires strict compliance with deadlines, payment conditions and other procedural requirements. Failure to act within the prescribed timeframe may result in losing the right to challenge an assessment altogether.
With combined legal and tax expertise, BDO supports clients through every stage of the UAE tax dispute process, providing clarity, confidence and continuity from audit through to litigation.
Note: This Legal Update / Newsletter is intended for general informational purposes only and should not be construed as legal advice. It is based on laws and legal interpretations in effect as of the date of publication. Laws and regulations may change over time, and their application can vary depending on individual circumstances. Readers are strongly encouraged to seek specific legal counsel before acting on any of the information provided herein.