Under UAE Corporate Tax Law, the FTA has the right to conduct tax audits and request any documentation needed to verify a company's tax obligations — including whether the company should have registered for tax in the first place. If you cannot produce the records when asked, the FTA can make its own assessment of what you owe.
Record keeping is not just good accounting practice. Under the UAE Corporate Tax Law's Ministerial Decision on record keeping, it is a legal obligation with specific content, format, language, and retention period requirements. Failing to maintain proper records is itself a penalty-attracting offence.
These record keeping obligations apply to all persons subject to UAE Corporate Tax Law — taxable persons (registered businesses), non-taxable persons (those below the registration threshold), and anyone with potential CT or VAT obligations. If you have a UAE trade license and conduct any business activity, you are within scope.
The law divides mandatory records into two categories: accounting records and commercial books, and the supporting documents that back up those books. Think of it as the books themselves, plus everything that proves the entries in those books are correct.
Every UAE business must maintain the following core accounting records:
Your financial statements — the complete picture of assets, liabilities, equity, income, and expenses for each accounting period. This is the foundation of any FTA review.
All payroll records — employee names, salary amounts, WPS transfer records, bonus payments, and end-of-service gratuity provisions. Covers all staff whether sponsored or not.
Your fixed asset register — every piece of equipment, vehicle, furniture, or other asset, including purchase cost, date of acquisition, depreciation method, and net book value at each period end.
If your business holds stock, you must maintain inventory records showing quantities and values at the end of every relevant Tax Period, plus records of stock counts that support those statements.
Every entry in your accounting books must be backed by a source document. The law requires all of the following:
Every sales invoice issued and every purchase invoice received. This is the primary evidence of revenue and expenses. VAT invoices are especially critical.
All signed contracts related to the business — client agreements, supplier contracts, employment contracts, lease agreements, and service terms.
Business correspondence relevant to transactions, plus all licences — trade licence, professional licences, regulatory approvals. Correspondence includes emails that evidence the terms or completion of transactions.
Documents evidencing any election made under UAE Corporate Tax Law — for example, Small Business Relief election, QFZP status, realisation basis election — and the calculations behind your CT computation. The FTA can review these even years later.
Beyond these listed records, the FTA has the right to request any other information needed to verify a person's Tax obligations — including their responsibility to register for tax. This is a broad power. If you cannot produce something the FTA requests, it may draw adverse inferences about your tax position.
This is where many businesses get caught out — assuming five years is always sufficient. The base period is five years, but there are extensions that can push the requirement well beyond that in specific situations.
All accounting records and commercial books must be retained for 5 years following the end of the Tax Period they relate to. This is the baseline for registered CT taxpayers.
Base PeriodFor all persons other than taxable persons, records must be kept for 5 years from the end of the calendar year in which the document was created.
Base PeriodAny records related to real estate must be retained for 7 years from the end of the calendar year in which the document was created. Includes purchase contracts, valuation records, lease agreements, and sale documents.
Extended BaseIf there is an ongoing dispute between the company and the FTA, or if the company is subject to a tax audit, or if the FTA has notified its intention to audit before the base period expires — an additional 4 years is added (or until the dispute is finally settled, whichever is later).
ExtensionIf the company submits a Voluntary Disclosure in the fifth year from the end of the relevant Tax Period — an additional 1 year is added from the date of that disclosure submission.
ExtensionTax period ends Dec 2024. No dispute, no audit. Keep records until Dec 2029. (5 years)
FTA notifies audit intention in Dec 2028 (year 4). Records now required until Dec 2032. (5 + 4 years)
Dispute raised in Dec 2028 and not settled until Dec 2034. Records required until dispute settles — Dec 2034.
If a company has a Legal Representative — for example, a liquidator — that representative must retain the company's books and records for a minimum of 1 year from the date their legal representation expires. This is relevant during company liquidations: the liquidator cannot simply delete everything once the company is struck off.
Good news: UAE law does not require everything to be kept in paper form. There are two acceptable methods, and both are equally valid.
Cloud accounting software (Zoho Books, QuickBooks Online, Xero), scanned copies of original invoices stored in a cloud drive, emailed invoices saved in your email system, and digital bank statement exports all qualify — provided the system is accessible, the data is not altered from the original, and you can produce it promptly when the FTA asks. Deleting old accounting software accounts mid-retention-period is a risk. Archive access — even read-only — must be maintained throughout.
This is one of the most practically useful clarifications for UAE businesses, many of which operate in English:
The FTA will accept records, data, and documents submitted in English. You do not need to maintain a parallel Arabic set of books for routine compliance.
The FTA can, at its discretion, request translation of some or all documents into Arabic. Any translation must be approved under UAE translation law and submitted within the FTA's specified timeframe.
If the FTA requests an Arabic translation during an audit, you will need a licensed translator to certify the documents. If your business operates entirely in English, this is fine for day-to-day accounting — but if you receive an FTA audit notice, budget for potential certified translation costs, especially if the audit covers voluminous records.
| What | Article | Retention | Key Point |
|---|---|---|---|
| Balance sheet & P&L | Art 2 | 5 years (taxable) | Core financial statements — must exist every period |
| Wages & salary records | Art 2 | 5 years | Includes WPS and gratuity provisions |
| Fixed asset register | Art 2 | 5 years | Depreciation schedule must be maintained throughout |
| Inventory records | Art 2 | 5 years | Quantities + values at each period end |
| Invoices (sales & purchase) | Art 2 | 5 years | Every invoice, not just above a threshold |
| Contracts & correspondence | Art 2 | 5 years | Business contracts and relevant emails |
| Tax election documents | Art 2 | 5 years | SBR, QFZP, realisation basis — must be documented |
| Real estate records | Art 3 | 7 years | Extended base period for property transactions |
| All records — during dispute/audit | Art 3 | +4 years | Extension runs from dispute/audit notification date |
| All records — voluntary disclosure yr 5 | Art 3 | +1 year | Extra year from VD submission date |
| Format | Art 4 | — | Original OR identical electronic copy — must be readable |
| Language | Art 5 | — | English accepted; FTA may request Arabic translation |
Based on what we see when taking on new accounting clients, these are the most frequent gaps:
From AED 499/month, Fastlane handles your accounting, payroll, and record keeping — with all source documents filed, all records maintained in cloud accounting software, and all retention periods tracked. FTA-registered Tax Agent. MoE-approved Auditor.
View Accounting & Payroll Services →This article is based on the UAE Ministerial Decision on Record Keeping under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022), covering Articles 2–5. Fastlane is an FTA-registered Tax Agent handling accounting, payroll, CT and VAT compliance for UAE mainland and free zone companies. Record keeping requirements may be updated — confirm current obligations with a qualified UAE tax advisor.