Arakan Forensic | UAE Tax Intelligence

The transition from "Tax Registration" to "Tax Audit" marks the most significant regulatory shift for UAE enterprises since 2023. In 2026, the FTA’s audit methodology has evolved from a document-review process to a system-led forensic inquiry.

I. The Audit Mandate: Federal Law No. 28

The legal basis for an FTA audit rests on Federal Decree-Law No. 28 of 2017 on Tax Procedures. Article 17 grants the Authority the right to perform a Tax Audit at their discretion, often with only 5 business days' notice (or zero notice in cases of suspected evasion).

In 2026, "Readiness" is no longer about having a trial balance; it is about the Immediate Digital Accessibility of the underlying transactional evidence.

The 5-Day Statutory Window

"The FTA expects a 'Forensic Export' of your tax ledgers within 120 hours of a formal notice. If your data sits in a global ERP without a pre-configured local extraction node, you are statistically likely to miss the deadline, triggering an automatic non-compliance penalty."

Reference: Cabinet Decision No. 105

II. Three Fatal Gaps in Traditional Audit Prep

Through our forensic work, Arakan has identified three recurring vulnerabilities that Big4 advisors often miss:

The Reconciliation Gap: Differences between your VAT returns and your Corporate Tax ledgers that cannot be explained via a cryptographically linked audit trail.
The Residency Gap: Statutory records that exist only in foreign cloud environments, lacking a UAE-based "Golden Copy" as required by data sovereignty norms.
The Metadata Gap: Missing "Time-Stamp" and "User-ID" data for ledger entries, making it impossible to prove the data wasn't altered post-closing.

III. The Arakan "In-Situ" Audit Protocol

Arakan’s framework moves the audit burden away from your finance team. By maintaining a Sovereign Digital Twin of your tax data, we ensure:

Pre-Audit Sanitization: Our AI identifies inconsistencies in your ledger before the FTA does, flagging potential "Tax Exposure" in real-time.
The Statutory Vault: All relevant documents are stored in a Zero-Custody, UAE-hosted environment with SHA-256 integrity proofs.
The "Audit Button": A one-click generation of the "FTA Audit File" (FAF) format, fully reconciled and forensic-ready.

Strategic Conclusion: The First Cycle

Your first audit cycle will set the tone for your relationship with the FTA for years to come. Demonstrating **Forensic Competence** on day one significantly reduces the likelihood of deep-dive inquiries. With the Arakan Protocol, you aren't just filing taxes—you are building an unassailable defense.