The Discovery Memo: What to Write

The discovery memo is the smallest document with the largest legal job: it proves when the 20-business-day clock started. One paragraph, written on discovery day: what was found, in which tax periods, by whom, and what surfaced it — the reconciliation, the email, the audit note. Without it, the awareness date is an assertion; with it, the deadline is defensible. Keep the source that surfaced the error with the memo — the email thread, the review report — because the memo references it and the reviewer may ask to see it.

Five-year retention under Article 3 of Cabinet Decision No. 74 of 2023 is the floor, not the target: keep tax records for five years after the end of the relevant tax period (seven for corporate tax records under Article 56 of Federal Decree-Law No. 47 of 2022), and keep the disclosure file for the same period measured from the disclosure. Organise the file so it can be produced as a unit — chronologically, by period, with the five load-bearing documents first. A file that has to be reassembled under an FTA deadline is a file that was never really kept.

A disclosure is only as strong as its evidence. Before starting the form, assemble the discovery memo (what was found, when, by whom), the original filed figures for each affected period, the corrected figures with a clear reconciliation between the two, and the source documents behind the correction — tax invoices, contracts, bank statements, import declarations, or payroll records as the error type requires. Keep everything for at least five years: Article 3 of Cabinet Decision No. 74 of 2023 (the Executive Regulation of the Tax Procedures Law) requires tax records to be retained for five years after the end of the relevant tax period (seven years for corporate tax under Article 56 of Federal Decree-Law No. 47 of 2022), and the FTA can ask to see the file behind any disclosure inside that window. A complete, dated file also protects you if the same error is ever questioned again — you can show exactly what was disclosed and when.

Awareness is practical, not philosophical. You become aware when someone in the business — an owner, accountant, bookkeeper, or your appointed tax agent — actually learns that a filed return, assessment, or refund claim contains an error. Typical triggers are an internal review that finds unreported sales, a supplier query that exposes a wrong TRN, a bank reconciliation that surfaces missing income, or an external audit that flags an input VAT claim with no valid invoice. Awareness is not the date the error was made, and it is not the date the FTA finds it — once the FTA discovers the error first, the voluntary route is effectively closed and the case is treated as a discovery, with harsher consequences. Be careful with the grey area in between: if your records should have revealed the error months ago, the FTA may argue awareness started earlier than the day you wrote the memo. That is why regular reconciliations matter — they convert 'should have known' into documented, dated discovery. When in doubt, treat the earliest date you can defend as day zero and file early.