Records to Be Maintained for A Tax Audit / VAT Audit

A tax audit is a formal examination conducted by the FTA to verify information or uncover fraud and inaccurate tax returns. As per Article (78) of Federal Decree-Law states that a registrant must maintain the following records to be made available to FTA when asked:

1. Records of all supplies and Imports of Goods and Services.
2. All Tax Invoices and alternative documents related to receiving Goods or Services.
3. All Tax Credit Notes and alternative documents received.
4. All Tax Invoices and alternative documents issued.
5. All Tax Credit Notes and alternative documents issued.
6. Records of Goods and Services that have been disposed of or used for matters not related to Business, showing Taxes paid for the same.
7. Records of Goods and Services purchased and for which the Input Tax was not deducted.
8. Records of exported Goods and Services.
9. Records of adjustments or corrections made to accounts or Tax Invoices.
10. Records of any Taxable Supplies made or received.
11. A Tax Record that includes the following information:
⦁ Due Tax on Taxable Supplies.
⦁ Due Tax after the error correction or adjustment.
⦁ Recoverable Tax for supplies or Imports.
⦁ Recoverable Tax after the error correction or adjustment.
In addition to that the Federal Tax Authority (FTA) can demand any further documents such as annual accounts details, general ledgers, purchase day books, invoices received, invoices issued, debit notes, credit notes, VAT ledgers, records of all supplies and imports, etc. Under the VAT law in UAE, Accounting Records should be maintained for at least five years.

VAT Penalties in the UAE if You Fail to Keep the Records

Every VAT registered person has the responsibility to maintain proper records and documents to support all the transactions. It is their responsibility to submit the documents or information’s whenever requested by FTA or during Tax Audit.
If a taxable person or business in UAE fails to keep required records, books, and documents, a penalty of AED 10,000 will be given and AED 50,000 in case of repetition.

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