Many UAE businesses underestimate their accounting obligations. The UAE now operates a sophisticated tax regime combining VAT (since 2018) and Corporate Tax (since 2023), both of which impose clear statutory record-keeping obligations that, if neglected, attract significant administrative penalties.

VAT Record-Keeping Requirements

VAT-registered businesses must maintain the following records for a minimum of 5 years:

  • Tax invoices issued for every taxable supply (must include TRN, date, description, taxable amount, VAT amount)
  • Tax invoices received from suppliers for input VAT recovery claims
  • Credit notes and debit notes
  • Import and export records
  • Bank statements and payment records
  • VAT return submissions and FTA correspondence

Corporate Tax Record-Keeping Requirements

Under UAE Corporate Tax Law, taxable persons must maintain records for 7 years after the end of the relevant tax period. Required records include:

  • IFRS-compliant financial statements
  • Trial balance and supporting schedules
  • Fixed asset register
  • Payroll and employee records
  • Contracts, invoices, and receipts for material transactions
  • Transfer pricing documentation for related-party transactions over AED 40 million
  • Tax returns filed with the FTA and supporting workings

Financial Statements Requirements

UAE CT registrants must prepare IFRS-compliant financial statements. Businesses with revenue below AED 50 million may use IFRS for SMEs. Businesses with revenue exceeding AED 50 million, or those belonging to a multinational group, must have their financial statements externally audited.

Penalties for Non-Compliance

  • Failure to maintain required records: AED 10,000 first offence, AED 50,000 repeat
  • Failure to submit VAT return on time: AED 1,000 first late filing, AED 2,000 repeat
  • Late payment of VAT due: 2% monthly penalty on unpaid amount
  • Failure to register for VAT when required: AED 10,000 to 20,000

Recommended Accounting Software

  • Zoho Books: UAE-specific VAT and CT compliance features, recommended for SMEs
  • QuickBooks Online: Global standard, strong reporting, widely used by accountants
  • Xero: Cloud-native, excellent for businesses with international operations
  • SAP / Oracle NetSuite: Enterprise-grade for larger businesses with complex compliance needs