This template helps businesses identify, score, and mitigate Corporate Tax risk areas before they trigger scrutiny from the Federal Tax Authority.
The FTA uses risk-based assessment models, not random checks. Red flags increase the likelihood of:
Audit selection
Information requests
Reassessments
Penalties
This template is designed for self-review, not filing, and should be completed at least annually (preferably quarterly).
Review each risk category
Answer honestly
Assign a risk level
Note mitigation actions
Reassess after corrections
| Rating | Meaning |
|---|---|
| Low | Unlikely to trigger review |
| Medium | May attract questions |
| High | Likely audit trigger |
| Critical | Immediate corrective action needed |
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Registered late for Corporate Tax | ☐ | ☐ |
| Incorrect entity registered | ☐ | ☐ |
| Wrong tax period selected | ☐ | ☐ |
| Free Zone status not reviewed | ☐ | ☐ |
| Group structure not disclosed | ☐ | ☐ |
Accounting Red Flag Assessment
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Year-end accounting only (no monthly close) | ☐ | ☐ |
| Frequent post-close adjustments | ☐ | ☐ |
| Weak audit trail | ☐ | ☐ |
| Inconsistent revenue recognition | ☐ | ☐ |
| Manual spreadsheets drive tax numbers | ☐ | ☐ |
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Adjustments not documented | ☐ | ☐ |
| Non-deductible expenses unclear | ☐ | ☐ |
| Exempt income unsupported | ☐ | ☐ |
| Losses not reconciled | ☐ | ☐ |
| No independent review of computation | ☐ | ☐ |
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Related parties not formally identified | ☐ | ☐ |
| No intercompany agreements | ☐ | ☐ |
| Management fees not supported | ☐ | ☐ |
| Cost allocations unclear | ☐ | ☐ |
| No transfer pricing documentation | ☐ | ☐ |
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Small Business Relief used without review | ☐ | ☐ |
| Revenue artificially managed | ☐ | ☐ |
| Free Zone income incorrectly treated | ☐ | ☐ |
| Group relief applied aggressively | ☐ | ☐ |
| No substance evidence | ☐ | ☐ |
Filing & Conduct Red Flag Assessment
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Late filings | ☐ | ☐ |
| Repeated amendments | ☐ | ☐ |
| Ignored FTA notices | ☐ | ☐ |
| Inconsistent disclosures | ☐ | ☐ |
| No compliance owner assigned | ☐ | ☐ |
| Risk Question | Yes / No | Risk Level |
|---|---|---|
| Missing invoices or contracts | ☐ | ☐ |
| Records not retained for required period | ☐ | ☐ |
| Poor document organization | ☐ | ☐ |
| Slow document retrieval | ☐ | ☐ |
| No audit response process | ☐ | ☐ |
Mitigation Notes:
| Category | Risk Level |
|---|---|
| Registration | ☐ |
| Accounting | ☐ |
| Tax Computation | ☐ |
| Related Parties | ☐ |
| Reliefs | ☐ |
| Filing Behavior | ☐ |
| Record Keeping | ☐ |
LOW / MEDIUM / HIGH / CRITICAL
| Overall Rating | Meaning |
|---|---|
| Low | Routine compliance |
| Medium | Monitoring required |
| High | Corrective action needed |
| Critical | Immediate remediation advised |
High and critical ratings significantly increase the probability of audit selection.
| Business Type | Review Frequency |
|---|---|
| SMEs | Quarterly |
| Growing businesses | Quarterly |
| Groups / Free Zones | Quarterly |
| High-risk structures | Monthly |
| Pre-filing | Mandatory |
This template is a preventive compliance tool, not a formality.
Businesses that regularly assess red flags:
Reduce audit likelihood
Shorten audit duration
Avoid penalties
Strengthen governance
The goal is not zero risk — it is defensible, well-managed risk.
For international best practices on tax risk management and audit selection models, refer to OECD guidance on compliance risk management.
https://www.oecd.org/tax/
