Most UAE businesses registered for VAT are aware that the Federal Tax Authority (FTA) can review their tax compliance at any time. But in practice, not all business owners are clear on the concrete record-keeping obligations, in what format records must be kept, and how long each type of document must be available for inspection. This article sets out the main practical points to know if your business faces an FTA VAT review.

The records the FTA expects to see

The FTA has the authority to request all documents and records that support the figures and information declared in a VAT return. Typical requests cover:

  • Original tax invoices for sales and purchases
  • Credit and debit notes issued and received
  • Contracts and agreements relevant to supply of goods and services
  • Bank statements supporting business transactions
  • Import and export documentation (including customs paperwork)
  • General ledgers and detailed accounting records
  • Supporting calculations for input and output VAT

The range of records covers not just invoices and receipts, but also underlining agreements and audit trails that allow the FTA to match entries with underlying transactions. For example, if your VAT return includes a large input VAT claim for imported goods, the FTA may ask for customs declarations and bank transfer proofs in addition to the invoice itself.

File formats and language for VAT records

Under UAE regulations, VAT records must be made available to the FTA in Arabic upon request. Businesses must ensure either the original records are in Arabic, or a precise Arabic translation is provided when requested.

While businesses may keep their accounting systems and source documents in English or another language for internal use, the expectation is that all supporting VAT records can be provided in Arabic without delay. The FTA, when conducting a review, can request to see either the original Arabic documentation or translated copies.

In terms of file format, the FTA accepts electronic records, but these must be in a readable and accessible form. Scanned PDF copies of original documents are generally accepted as long as the electronic file is legible and authentic. However, handwritten notes or poor scans that obscure key information are not sufficient. For system-generated reports or ledgers, exportable formats such as PDF or Excel are commonly requested and should be kept available.

Retention period for VAT records

A key compliance requirement is the retention of all VAT-related records for at least 5 years from the end of the tax period to which they relate. This applies to:

  • Tax invoices (issued and received)
  • Credit and debit notes
  • Customs records
  • Accounting and financial statements
  • Any other documentation supporting the contents of the VAT return

The 5-year period is a basic minimum. For example, documents relating to real estate must be kept for a longer period of 15 years, but for general VAT compliance, 5 years covers most cases.

Common points raised in FTA VAT reviews

When the FTA initiates a review, it does not only seek to see official invoices and ledgers. Some common requests include:

  • Proof that customer and supplier TRNs (Tax Registration Numbers) have been validated
  • Evidence of actual payment for input VAT claims (e.g. bank transfers, payment vouchers)
  • Detailed breakdowns matching sales and purchases in the accounting system with the submitted returns
  • Reconciliation between the business bank account and declared VAT liability

This means the documentation required during a review is broader than just the VAT return and invoices. Any supporting file showing how amounts in the return were calculated, or how the business verified VAT treatment (such as zero-rating on exports), can be required.

Maintaining readiness for an FTA inspection

To be prepared for an FTA VAT review, businesses should:

  • File and index documentation so that retrieval is swift and straightforward
  • Ensure records can be provided in Arabic without undue delay
  • Keep digital backups in formats that retain integrity and legibility (e.g. PDF with clear scans, not just images)
  • Retain all correspondence with the FTA or suppliers regarding VAT treatment or clarifications
  • Review and monitor that audit trails are preserved, so transactions can be traced back through supporting documents

The FTA does not require submission of all records on a regular basis but expects full and accurate records to be ready for inspection at any point within the 5-year window. Gaps, missing files, or unreadable documentation are common risk points during a review.

UAE businesses are advised to periodically review their record-keeping and document storage practices in line with these requirements, prioritising legibility, traceability and the ability to provide an Arabic version when needed.