Account and bookkeeping records will be kept under UAE’s VAT

According to the UAE’s value-added tax, the law stipulates the accounts and records that all registrants in the country should keep. The law also stipulates the period of time during which bookkeeping records related to the supplies made and received should be kept. Let us understand the accounts and records that should be maintained in the UAE under VAT and the period of time these accounts and records should be kept.

Accounts and records under VAT

Taxable persons under UAE VAT shall keep the following accounts and bookkeeping records:

Accounts and records under UAE VAT

1. Record all outward supply

2. Tax invoices or alternative documents related to the inward supply of goods and services

3. Imported goods and services records

4. Records of exported goods and services

5. All tax credit notes or replacement documents issued

6. Records of goods and services that are disposed of or used for matters unrelated to the business, showing the taxes paid for them

7. Records of purchases of goods and services that have not recovered input tax

8. Record adjustments or corrections to accounts or tax invoices

9. The tax record shows the following:

Taxable supplies

Make up the tax payable

Taxes payable after correction of errors or adjustments

Input supply or import recoverable input tax

Input tax recoverable after correction or adjustment

Time period to keep accounts and records

The accounts and bookkeeping records kept by taxable persons shall be kept for 5 years after the end of the tax period associated with them.

For example:’The supply tax invoice dated January 10, 2018 relates to the tax period from January to December 2018. Therefore, it should be retained until December 31, 23.

However, please note that records related to capital assets such as machinery and furniture should be retained for at least 10 years from the end of the relevant tax period, and records related to real estate should be retained for at least 15 years from the relevant tax period. The tax period associated with it ends.

Therefore, although UAE companies have done record keeping in the past and maintained accounts and records for internal reference, the introduction of value-added tax requires certain record keeping and accounts and records must be maintained compulsorily. The detailed information required in these accounts and records and the period for which they should be retained have been specified. Crucially, companies must use a software that will make it easier to maintain records and manage these accounts and records. Companies should evaluate and decide on a software that can help them maintain systematic, error-free accounts and records, and have inherent compliance verification. Commercial software should become a tool for compliance testing based on value-added tax, while helping them to maintain focus on core business activities.