UAE VAT Record-keeping Requirements

UAE’s Federal Tax Authority has recently issued a Taxable Persons’ Guide elaborating the requirements of Record-keeping for VAT purpose. You can accordingly cascade this information to your team so that appropriate VAT compliance is ensured. For our valuable VAT consulting clients, we ensure that the on-going VAT compliance always remains intact.

What records must be kept?

A VAT-registered person is required by law to keep all of the following records:

  1. records of all supplies and imports of goods and services;
  2. all tax invoices and alternative documents received;
  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 the business, detailing the VAT paid on those goods and
services;

  1. records of goods and services purchased for which the input tax was not
    deducted;
  2. records of exported goods and services; and
  3. records of adjustments or corrections made to accounts or tax invoices.

In addition to the above, a VAT-registered person must keep a VAT record or account which includes the
following information:

  1. output tax due on taxable supplies;
  2. output tax due on taxable supplies accounted for via the reverse charge mechanism;
  3. output tax due after the correction of any errors or adjustments;
  4. input tax recoverable on supplies or imports; and
  5. all tax credit notes and alternative documents issued;
  6. input tax recoverable after the correction of any errors or adjustments.

In addition to the above VAT-specific record-keeping requirements, all businesses have to keep accounting records and documents that relate to their business activities.Such records and documents include:

  1. balance sheet and profit and loss accounts;
  2. records of wages and salaries;
  3. records of fixed assets;
  4. inventory records and statements (including quantities and values) at the end of any relevant tax period and all records of stock-counts related to inventory statements.

The above requirements exist in order to demonstrate a sufficient audit trail such that a VAT amount can be traced from a source document, for example, an invoice, through to the final tax return.

For on-going VAT compliance, a company must adhere to above requirements to avoid fines and penalties.