Books of accounts maintenance and retaining of supporting / relevant records are highly essential for proper control of the business operations. This will facilitate the correct receipt and payment of cash and other transactions encoded by the company.
It is mandatory to maintain the books of accounts under UAE company law and UAE VAT law.
Accounting Records (Article 26) – Federal Law No. (2) Of 2015 on Commercial Companies in the United Arab Emirates (UAE)
1. Each company shall maintain accounting records showing transactions, provided that such records would accurately and at any time demonstrate the Company’s financial standing, and through which partners and shareholders could verify that Company’s accounts are maintained as per the provisions of this law.
2. Each company shall maintain its accounting records at its head office for at least five (5) years as from the company’s fiscal year end date.
3. Company may maintain an electronic copy of original of the documents and records kept or deposited therewith in accordance with the controls issued by Ministerial decision.
Article (78) Federal Decree-Law No. (8) of 2017 on Value Added Tax
Record-keeping
1. Without prejudice to the provisions related to record-keeping stated in any other law, the Taxable Person shall keep the following records:
a)Records of all supplies and Imports of Goods and Services.
b) All Tax Invoices and alternative documents related to receiving Goods or Services.
c) All Tax Credit Notes and alternative documents received.
d) All Tax Invoices and alternative documents issued.
e) All Tax Credit Notes and alternative documents issued.
f) Records of Goods and Services that have been disposed of or used for matters not related to Business, showing Taxes paid for the same.
g) Records of Goods and Services purchased and for which the Input Tax was not deducted.
h) Records of exported Goods and Services.
i) Records of adjustments or corrections made to accounts or Tax Invoices.
j) Records of any Taxable Supplies made or received in accordance with Clause (3) of Article 48 of this Decree-Law, including any declarations provided or received in respect of those Taxable Supplies.
k) A Tax Record that includes the following information:
i) Due Tax on Taxable Supplies.
ii) Due Tax on Taxable Supplies pursuant to the mechanism in Clause (1) of Article (48) of this Decree-Law.
iii) Due Tax after the error correction or adjustment.
iv) Recoverable Tax for supplies or Imports.
v) Recoverable Tax after the error correction or adjustment.
2. The Executive Regulation of this Decree-Law shall specify the following:
a)Time limits, restrictions and conditions for keeping the records listed in Clause (1) of this Article.
b) Restrictions and procedures regarding the maintenance of the confidentiality of the records that may be accessed by the Authority in the case of Government Entities mentioned under Clause (2) of Article (72) of this Decree-Law.
Article (3) – Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures
Period of Record-Keeping
1. Every Person holding and maintaining any of the records mentioned in Article (2) of this Decision, shall keep these records in a manner that enables the Authority, or an officer authorised by the Authority, to ascertain that Person’s Tax obligations, as follows:
a) For a period of (5) years after the end of the Tax Period to which they relate in the case of a Taxable Person.
b) For a period of (5) years from the end of the calendar year in which the concerned document was created in the case of non-Taxable Persons.
c) For a period specified in the Tax Law for real estate records.
2. The Authority may, before the expiry of the period specified in paragraph (a) of Clause (1) of this Article, inform the Person to retain the records for a further period not exceeding (4) years, in cases where he is required to do so including the following:
a) If the Taxable Person’s tax obligations are subject to a dispute between him and the Authority.
b) If the Person is being subject to a Tax Audit and that Tax Audit has not yet been completed.
c) If the Authority has given notice to the Person that it intends to conduct a Tax Audit before the expiry of the period specified in Clause (1) of this Article.
3. If a Person is no longer a Taxable Person, he shall be required to comply with the provisions of paragraph (b) of Clause (1) of this Article.
4. Where a Person enters into bankruptcy proceedings, his Legal Representative is required to keep the records of that Person for 12 months from the date on which those proceedings have come to an end.
5. For the purposes of Clause (4) of this Article, should the Authority require the records to be kept for a longer period, it may take possession of them, at a time agreed with the Legal Representative responsible for the relevant bankruptcy proceedings.
Article (4) – Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures
How to Keep Accounting Records and Commercial Books
1. Unless otherwise required by the Tax Law, the obligation to maintain Accounting Records and Commercial Books shall be met through any of the following:
1. Creating the record and the retention of original Documents which support the entries contained in the record.
2. Creating the record and preserving the information that was contained in the original document, provided that:
a) The information matches the data contained in the original document, and shall be available during the periods referred to in Article (3) of this Decision.
b) The information retained or stored in either photocopy or electronic form, and an easily readable copy of it can be reproduced within a reasonable period, if requested by the Authority.
2. The Authority may lay down the rules of preserving information contained in Accounting Records and Commercial Books, and impose such reasonable requirements for ensuring that the information will be as readily available to it as if the original records themselves had been preserved.
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