Since the VAT came into effect from this year, it is mandatory for every taxable person to maintain books of accounts under the VAT law. In addition to that the Federal Tax Authority (FTA) can ask for additional documents such as, Annual accounts details, General ledgers, Purchase day books, Invoices issued, Invoices received, Credit notes, Debit notes, VAT Ledgers, Records of all supplies and imports etc. Under the VAT law in UAE the books of accounts and records are to be maintained for at least five years.
Records Maintained by the Taxable Person
According to the VAT Decree 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.
k. A Tax Record that includes the following information:
1) Due Tax on Taxable Supplies.
2) Due Tax after the error correction or adjustment.
3) Recoverable Tax for supplies or Imports.
4) Recoverable Tax after the error correction or adjustment.
Penalty for not keeping proper records and documents
It is necessary for all the taxable businesses to keep their books in an organized and standardized form and must keep all the documents to avoid penalty and fines.
If a taxable person or business fails to keep required records, books and documents, penalty of AED 10,000 will be given and then AED 50,000 if the offence is repeated again.
SAB is providing the services of VAT Accounting and we will take care of the VAT Accounting and Bookkeeping and save your business from facing any penalties and fines. Contact us now!