Common Mistakes, FTA Audits, and How to Accelerate the Process

What This Blog Covers

                   1. Why VAT Refunds Get Delayed:

                   2. Common Mistakes in VAT Refund Claims:

                   3. When Does a Refund Trigger an FTA Audit

                   4. How to Fast-Track Your Refund with Precision

                   5. Turning Compliance Into Confidence:

                   6. HowTax Agent Support Can Changes Everything

Claiming a VAT refund in the UAE may appear straightforward at first glance, but the reality is that the process is often complex, documentation-intensive, and vulnerable to delays. Many businesses encounter challenges such as FTA queries, extended review periods, or even tax audits during or after a refund claim. Inaccuracies in submissions or poor compliance can endanger the entire refund — affecting cash flow. If you’re unsure about the accuracy of your VAT refund or are already facing delays or audits, it’s time to reassess your strategy.

Why Do VAT Refunds Get Delayed?

From our extensive experience, there are four recurring issues that hinder the refund process:

Incorrect Tax Positions: Businesses often misclassify expenses or claim input VAT on ineligible transactions, particularly involving exempt or zero-rated supplies, leading to rejections or queries.

Documentation Gaps: VAT invoices, contracts, credit notes, and payment proof must comply with Federal Tax Authority (FTA) formats and requirements. Missing or non-compliant documents are a key reason for rejection.

Reconciliation Issues: Discrepancies between VAT returns, books of accounts, and supporting schedules (like input VAT summary or supplier ledgers) frequently raise red flags.

FTA Investigations: High-value refund claims or the first refund submission by a business often prompt the FTA to initiate a detailed review or a comprehensive tax audit, further delaying refunds.

Best Practices to Expedite VAT Refunds

To reduce the risk of delays and improve the chances of timely approval, businesses should implement the following key measures:

1. Conduct a Detailed Internal Review:

Review the VAT returns, working files, and claim calculations. Ensure all input VAT is supported by valid documents and accurately reported in the correct VAT period.

2. Prepare Supporting Files in Advance:

The FTA requires specific refund templates and annexures, including transaction-level data. Ensuring all information is ready before applying is essential to avoid back-and-forth communication.

3. Identify and Rectify Non-Compliance:

If your business has legacy errors, such as incorrect VAT classifications or under-declared revenue, these should be resolved proactively before claiming a refund.

4. Submit with Precision and Timeliness:

A correctly submitted refund application initiates the standard 20-working-day processing window. Any gaps or inconsistencies will interrupt this timeline.

5. Respond Promptly to FTA Queries:

When the FTA requests clarifications or additional documentation, timely and precise responses help move the application forward without unnecessary delay.

6. Engage Professional Advisors:

Given the technical nature of VAT law and the strict compliance requirements, involving a qualified VAT consultant can significantly improve accuracy and reduce exposure to penalties or prolonged reviews.

How Stratify Consulting Can Help

At Stratify Consulting Group, we understand that claiming a VAT refund is not merely a compliance function — it’s a vital financial event that requires expertise and precision. Our team of FTA-approved Tax Agents conducts a detailed assessment of your refund eligibility, prepares compliant documentation, and ensures that each claim is backed by robust reconciliations and an audit-ready approach.

Whether you’re an exporter, a real estate developer, or a business investing in capital-intensive assets, our specialists ensure that every claim is accurate, compliant, and professionally handled. In cases where refunds trigger audits, we provide complete assistance in audit representation, clarification responses, and documentation defense.

Take Control of Your VAT Refund Process

If your VAT refund has been pending for months, if you’ve received queries from the FTA, or if you simply want to ensure your next application is risk-free and accurate, now is the time to act. Connect with our team for a free initial assessment and let us guide you through a structured and compliant VAT refund process.

To learn more, visit www.stratify.ae or email us at info@stratify.ae