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Call in UAE : 600550007 | Outside UAE: +971600550007
From Corporate Tax registration deadlines to VAT filing cycles, ESR obligations, Transfer Pricing rules, and the new FTA penalty regime — everything your business needs to stay fully compliant with UAE tax law, explained from first principles to advanced practice.
Tax compliance in the UAE is no longer a back-office formality. It is the operational backbone of every registered business in the country — and since 2023, failure to comply carries compounding financial and reputational consequences.
The UAE’s tax landscape has undergone a fundamental transformation over the past six years. Starting with the introduction of VAT at 5% in January 2018, followed by the federal Corporate Tax (CT) regime effective June 2023, and most recently the Domestic Minimum Top-Up Tax (DMTT) applicable from 1 January 2025, businesses operating in Dubai and across the UAE now face a multi-layered set of corporate tax registration, reporting, and payment obligations overseen by the Federal Tax Authority (FTA).
Tax compliance in this context means four things: registering correctly and on time; filing accurate returns within prescribed corporate deadlines; maintaining the documentation the FTA requires for audits; and proactively correcting errors before they are discovered. Getting any of these wrong can trigger penalties under the UAE’s revised framework — which came into force on 14 April 2026 following Cabinet Decision No. 129 of 2025.
The FTA conducted 176,000 market inspection visits in 2025 — an 89% year-on-year increase. Risk-based audit selection now cross-references customs records, banking data, VAT returns and CT filings simultaneously. Passive compliance is no longer sufficient protection.
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This guide covers every active tax obligation a UAE business may face: Corporate Tax, VAT, Economic Substance Regulations, Transfer Pricing documentation, and the new penalty framework. Whether you are a startup just crossing the registration threshold or a multinational managing DMTT exposure, you will find the technical depth and practical steps you need.
The UAE currently operates three concurrent federal tax regimes, each with its own legislation, registration requirements, filing cycles and penalty structure. ESR adds a fourth layer of compliance obligation for entities conducting relevant activities.
On taxable income above AED 375,000. Effective for financial years starting on or after 1 June 2023. 0% rate for QFZPs on qualifying income.
Standard rate on most taxable supplies since January 2018. Mandatory registration at AED 375,000 taxable turnover. Quarterly or monthly filing.
Applies to tobacco (100%), energy drinks (100%), carbonated drinks (50%), and sweetened beverages. Registration mandatory for producers and importers.
Domestic Minimum Top-Up Tax for MNE groups with €750m+ global revenues. Effective 1 January 2025 under Federal Decree-Law No. 60 of 2023.
| Tax Type | Primary Legislation | Effective Date | Administered By |
|---|---|---|---|
| Corporate Tax | Federal Decree-Law No. 47 of 2022 | 1 June 2023 | FTA |
| VAT | Federal Decree-Law No. 8 of 2017 (amended by FDL No. 16 of 2025) | 1 January 2018 | FTA |
| Excise Tax | Federal Decree-Law No. 7 of 2017 | 1 October 2017 | FTA |
| DMTT | Federal Decree-Law No. 60 of 2023; Cabinet Decision No. 142 of 2024 | 1 January 2025 | FTA |
| Tax Procedures | Federal Decree-Law No. 28 of 2022 (amended by FDL No. 17 of 2025) | Various | FTA |
| Penalty Regime | Cabinet Decision No. 129 of 2025 | 14 April 2026 | FTA |
Registration for Corporate Tax is mandatory for virtually every entity operating in the UAE — regardless of profitability, size, or whether income is currently being generated.
| Entity Type | Registration Required? | Tax Rate | Notes |
|---|---|---|---|
| Mainland LLC / JSC | Mandatory | 0% / 9% | 0% on income ≤ AED 375,000; 9% above |
| Free Zone Company (non-QFZP) | Mandatory | 9% | Loses free zone benefit if QFZP criteria not met |
| Qualifying Free Zone Person (QFZP) | Mandatory | 0% on qualifying income; 9% on non-qualifying | Must maintain substance; pass FTA tests annually |
| Natural Person (Sole Trader) | Conditional | 0% / 9% | Only if business revenue exceeds AED 1 million/year |
| Offshore Company (activity in UAE) | Mandatory | 9% | Applies where UAE permanent establishment exists |
| Government / Qualifying Public Benefit | Exempt | N/A | Cabinet Decision No. 55 of 2025 provides specific exemptions |
The rate structure under Federal Decree-Law No. 47 of 2022 is tiered, not flat:
📊 Worked Example
A Dubai mainland LLC with AED 850,000 net profit and AED 50,000 non-deductible expenses has taxable income of AED 900,000. Tax payable: 0% × AED 375,000 = AED 0, plus 9% × AED 525,000 =AED 47,250. No advance payment is required — the full amount is due with the return filing.
Under Cabinet Resolution No. 73 of 2023, businesses with revenue below AED 3,000,000 could elect Small Business Relief for tax periods 2023, 2024 and 2025, treating taxable income as zero. This relief is not automatic — it must be elected on the CT return. Critically, the relief expires for tax periods ending after 31 December 2026. Businesses relying on this must begin standard-regime readiness planning now.
| Obligation | Deadline | Platform | Penalty for Late |
|---|---|---|---|
| CT Registration | Within 3 months of incorporation (new entities) — phased deadlines for pre-2024 companies | EmaraTax | AED 10,000 |
| CT Return Filing | Within 9 months after financial year-end | EmaraTax | AED 500–1,000 per month |
| Tax Payment | With return filing (no advance payment) | EmaraTax | 14% p.a. on outstanding balance (from 14 Apr 2026) |
| Record Retention | Minimum 7 years from end of tax period | Internal | AED 10,000–20,000 for failure |
| CT Return (FY Dec 2025) | 30 September 2026 | EmaraTax | As above |
🚫 Critical: Dormant Companies Must Still File
A nil return must be filed even if the entity generated zero revenue. The FTA monitors non-filers through integrated data systems. Assuming exemption from filing because of inactivity is the single most common and costly compliance error in the UAE.
| Registration Type | Taxable Turnover Threshold | When to Register |
|---|---|---|
| Mandatory | AED 375,000 / year | Immediately upon crossing threshold — register via EmaraTax |
| Voluntary | AED 187,500 / year | Optional; allows recovery of input VAT before mandatory threshold |
| Non-Resident (Foreign) Business | Any taxable supply in UAE | Must appoint a fiscal representative; registration due immediately |
VAT returns are generally filed quarterly, though the FTA may assign monthly filing to businesses with larger or more complex transaction volumes. Returns and payments are due on the 28th of the month following the end of the reporting period.
⚠ NIL Returns are Mandatory
Even during periods of zero activity, a VAT return must be submitted. Failure to file a NIL return incurs an AED 1,000 penalty (AED 2,000 on a second violation within 24 months).
All VAT-registered businesses must retain the following records for a minimum of five years:
Economic Substance Regulations (ESR) were introduced under Cabinet Decision No. 57 of 2020 to ensure that UAE entities conducting certain “Relevant Activities” maintain genuine economic substance in the country. Although separate ESR filings were abolished from FY 2023, substance requirements have been integrated into the broader Corporate Tax compliance framework — meaning the obligation continues, it is simply reported through CT.
| Relevant Activity | Common Business Types |
|---|---|
| Banking | Licensed banks and deposit-taking institutions |
| Insurance | Underwriters, re-insurers, captive insurance entities |
| Investment Fund Management | Fund managers, portfolio advisers |
| Lease-Finance | Finance leasing companies, SPVs |
| Headquarters | Regional HQ entities managing group companies |
| Shipping | Vessel operators, shipping companies |
| Holding Company | Pure equity holding entities |
| Intellectual Property (IP) | IP owners, royalty-receiving entities |
| Distribution & Service Centre | Group distribution hubs, shared-service centres |
Entities conducting any of these activities must demonstrate: adequate employees with requisite qualifications in the UAE; adequate operating expenditure incurred in the UAE; physical office or premises in the UAE; and that the core income-generating activities (CIGAs) for the relevant activity are conducted within the UAE.
From FY 2023 onward, ESR substance evidence is reviewed as part of CT compliance. The FTA will audit management charges or service fees designed to shift profits to exempt free zone affiliates — this is an area of active enforcement focus in 2026.
Transfer pricing (TP) rules under Articles 34 and 35 of Federal Decree-Law No. 47 of 2022, supplemented by Ministerial Decision No. 97 of 2023, require that all transactions between related parties and connected persons be conducted at arm’s length — the same price that independent parties would agree in comparable circumstances.
| Documentation Type | Trigger Threshold | Content Required |
|---|---|---|
| Local File | Domestic related-party transactions > AED 3,000,000 OR cross-border controlled transactions > AED 6,000,000 | Detailed analysis of specific controlled transactions; comparability analysis; method selection and justification |
| Master File | Member of MNE group with consolidated revenues ≥ AED 3.15 billion (approx. €750m) | Group-level TP policies; organisational structure; global value chain description |
| Country-by-Country Report (CbCR) | UAE-headquartered MNE group with consolidated revenues ≥ AED 3.15 billion | Revenue, profit, tax paid and employees per jurisdiction |
| Disclosure Form | Any entity with related-party transactions | Summary TP disclosure submitted with CT return |
The FTA actively audits the following TP arrangements:
⚠ Indicative Cost of TP Documentation
Transfer pricing documentation (Master File + Local File) typically costs AED 15,000–40,000 depending on transaction complexity. This is a known, controllable expense. The cost of an FTA assessment identifying undocumented non-arm’s-length pricing is considerably higher — and carries criminal exposure where intentional evasion is found.
The Domestic Minimum Top-Up Tax (DMTT), enacted under Federal Decree-Law No. 60 of 2023 and Cabinet Decision No. 142 of 2024, applies to financial years commencing on or after 1 January 2025. It is the UAE’s implementation of the OECD’s Pillar Two global minimum tax framework.
The DMTT applies to constituent entities of Multinational Enterprise (MNE) groups with consolidated global revenues of at least €750 million (approximately AED 3.15 billion) in at least two of the four preceding fiscal years.
If a UAE-based entity — including a Qualifying Free Zone Person normally subject to 0% CT — has an effective tax rate (ETR) below 15% on its UAE profits, the DMTT triggers a top-up charge to bring the combined rate to the 15% floor. This means even QFZP status cannot shelter MNE constituent entities from the minimum tax.
The UAE has published framework legislation for R&D tax credits under Cabinet Decision No. 215 of 2025. This allows qualifying R&D expenditure to generate credits that reduce CT liability — a meaningful incentive for technology, pharmaceutical and innovation-focused businesses in Dubai and free zone environments.
The UAE’s penalty framework was fundamentally restructured by Cabinet Decision No. 129 of 2025, effective 14 April 2026. The previous compounding model — which could reach 300% of the unpaid tax — has been replaced by a simpler but still significant regime designed to encourage voluntary correction.
| Violation Type | Old Regime (Pre-Apr 2026) | New Regime (From 14 Apr 2026) |
|---|---|---|
| Late payment of tax | Daily compounding rate — capped at 300% | 14% per annum flat rate on outstanding balance |
| Voluntary disclosure (before FTA audit notice) | 1% per month on underpaid tax | 1% per month — lower penalty tier confirmed |
| Voluntary disclosure (after FTA audit notice) | Higher rates | Additional 15% fixed surcharge + 1% per month from original due date |
| Late VAT registration | AED 20,000 | AED 20,000 (unchanged) |
| Late CT registration | AED 10,000 | AED 10,000 (unchanged) |
| Failure to file VAT return (first time) | AED 1,000 | AED 1,000 |
| Failure to file VAT return (repeat, within 24 months) | AED 2,000 | AED 2,000 |
| Failure to maintain records (VAT) | AED 10,000–20,000 | AED 10,000–20,000 |
| Designated Zone violations (Excise) | Up to 50% of tax value or AED 50,000 | Up to 50% of tax value or AED 50,000 |
| Tax evasion | Criminal + financial | Criminal prosecution + imprisonment; 15-year audit window |
💡 Voluntary Disclosure: The Financial Case for Acting Now
On a AED 200,000 underpayment: disclosing before an FTA audit notice costs approximately AED 6,000 (1% × 3 months) plus 14% p.a. interest. Waiting until after an audit notice costs an additional AED 30,000 fixed surcharge alone — purely for the delay. The new framework creates a sharp, quantifiable incentive to self-correct proactively.
Under Federal Decree-Law No. 17 of 2025, the standard FTA audit window is five years. However, where the FTA holds reasonable grounds to suspect tax evasion or failure to register, this window extends to 15 years. The FTA can also conduct unannounced field inspections without adhering to the standard 10-business-day notice period in evasion cases.
The FTA operates under an ISO 31000-certified risk management framework. Audit selection is data-driven, with the most common triggers including:
The FTA sends a formal written audit notice. Standard notice period: 10 business days. The notice specifies the tax type, period under review, and records required. Unannounced inspections permitted where evasion is suspected.
Taxpayer provides requested records within the specified deadline. Documents typically include financial statements, tax returns, invoices, contracts, bank statements and intercompany agreements. Deadlines set by the FTA are fixed by statute.
FTA issues iterative written queries. The taxpayer responds within prescribed timeframes. This phase can involve multiple rounds of requests covering specific transactions, deductions, or related-party arrangements.
If the FTA identifies discrepancies, it issues a Tax Assessment detailing additional tax due, penalties and interest. The taxpayer has 20 business days to pay or formally object.
The taxpayer may file a Reconsideration Request to the FTA within 20 business days of receiving the assessment. The FTA has 20 business days to respond. This is an internal review mechanism before escalation to the TDRC.
If the Reconsideration is unsuccessful, the taxpayer may escalate to the TDRC — an independent administrative body. The TDRC conducts a formal hearing and issues a binding decision.
Further appeals may be escalated to the UAE Federal Courts. This route is time-consuming and costly. In most cases, the TDRC provides the final practical resolution.
⚖Resolution — Payment, Refund, or Penalty Adjustment
The following flow covers the end-to-end compliance journey for a new or existing business operating in the UAE mainland or a free zone, from initial assessment through to ongoing annual obligations.
Identify entity type (mainland / free zone / offshore), business activities, and whether you conduct any of the 9 ESR-relevant activities. Assess whether QFZP criteria are achievable. Confirm whether MNE group revenues trigger DMTT.
All UAE-resident companies must register within 3 months of incorporation (or immediately if already incorporated and not yet registered). Complete the EmaraTax registration to obtain your Corporate Tax Registration Number (CTRN).
If taxable turnover exceeds or is expected to exceed AED 375,000 in the next 30 days, register immediately. Consider voluntary registration at AED 187,500 to recover input VAT. Apply via EmaraTax; allow 2–3 weeks for TRN issuance.
Set up IFRS-compliant accounting. Implement chart of accounts aligned to tax requirements. Configure VAT codes for standard-rated, zero-rated and exempt supplies. Enable compliant invoicing with all FTA-required invoice fields (TRN, VAT amount, currency, etc.).
File quarterly (or monthly if assigned) by the 28th of the following month. Always file NIL returns if no activity. Reconcile VAT output and input accounts monthly to avoid end-of-period errors. Apply reverse charge correctly on imported services.
After year-end: prepare audited financial statements; adjust accounting profit for CT purposes (add non-deductible expenses; subtract exempt income); calculate taxable income; apply Small Business Relief election if eligible; prepare TP Disclosure Form if related-party transactions exist; file via EmaraTax within 9 months of FY end.
Retain FTA invoices, contracts, bank statements, audited accounts, intercompany agreements, payroll records and all supporting documents for the prescribed periods. Poor record retention is the primary audit trigger and a standalone penalty exposure.
Conduct periodic internal compliance reviews — at minimum annually. If errors are identified in prior filings, submit a Voluntary Disclosure via EmaraTax before any FTA audit notice. The financial benefit of proactive self-correction under the 2026 penalty regime is quantifiable and significant.
Ongoing Compliance — Annual CT Return + Quarterly VAT + ESR Substance + TP Documentation
| Obligation | Mainland LLC / JSC | Qualifying Free Zone (QFZP) | Non-Qualifying Free Zone | Offshore (UAE PE) |
|---|---|---|---|---|
| CT Registration | Required | Required | Required | Required |
| CT Rate | 0% / 9% | 0% (qualifying income); 9% (non-qualifying) | 9% | 9% |
| Annual CT Return | Mandatory | Mandatory | Mandatory | Mandatory |
| VAT Registration (if threshold met) | Mandatory | Mandatory | Mandatory | Conditional |
| Substance (ESR) Requirements | If relevant activity | Mandatory for QFZP status | If relevant activity | If relevant activity |
| Transfer Pricing Documentation | If thresholds met | If thresholds met | If thresholds met | If thresholds met |
| DMTT | If MNE group >€750m | If MNE group >€750m | If MNE group >€750m | If MNE group >€750m |
| Record Retention (CT) | 7 years | 7 years | 7 years | 7 years |
⚠ Free Zone Entities: Automatic Exemption Is a Myth
Free zone entities routinely assume their jurisdiction provides automatic CT exemption. It does not. QFZP status requires annual demonstration of adequate substance, qualifying income composition, and a clean CT filing record. Revenue from UAE mainland transactions may be taxed at 9% unless it falls into a specifically qualified category. A single non-qualifying transaction in a year can jeopardise the entire 0% rate for that period.
| Issue | Root Cause | Risk Level | Resolution Mechanism |
|---|---|---|---|
| Missed CT registration deadline | Belief that non-profit or inactivity exempts registration | High | Register immediately via EmaraTax; AED 10,000 late registration penalty applies. Late Registration Penalty Waiver Initiative available for qualifying cases — verify on FTA portal. |
| NIL VAT returns not filed | Assumption that zero-activity periods need no filing | Medium | File all outstanding NIL returns immediately. AED 1,000–2,000 per missed period. Consider Voluntary Disclosure if multiple periods missed. |
| Input VAT claimed on non-deductible expenses | Incorrect VAT coding in accounting system; entertainment, motor vehicles claimed incorrectly | High | Submit Voluntary Disclosure on EmaraTax to correct prior-period return. Revise accounting codes to block restricted input tax categories. |
| Reverse charge VAT not applied on imported tax services | Unawareness that RCM applies to B2B services received from non-UAE suppliers | High | Calculate historical RCM exposure. Submit Voluntary Disclosure. Update accounts payable procedures and supplier onboarding to flag foreign service providers. |
| Related-party transactions not at arm’s length | Intercompany pricing set without TP analysis; management fees lacking documentation | High | Commission TP study and Local File. Review and restate intercompany agreements. Prepare Disclosure Form for CT return. Amend returns if prior filings are affected via Voluntary Disclosure. |
| QFZP status unknowingly lost | Mainland revenue exceeding permitted thresholds; substance requirements not maintained | High | Conduct qualifying income analysis for affected periods. Amend CT returns to apply 9% on non-qualifying income. Restructure mainland dealings going forward. |
| VAT credit balance approaching five-year deadline | Unmonitored EmaraTax credit balance from earlier periods | Medium | Review EmaraTax for outstanding credit balances. File VAT refund application immediately if within five-year window. Expired credit is permanently forfeited. |
| Poor record retention | No formal document management policy; records stored informally or deleted | Medium | Implement document management system. Restore records from counterparties where possible. For an ongoing audit, consult a tax agent to manage the FTA’s information requests. |
| FTA audit notice received | Any of the above; or FTA risk-based selection | Critical | Do not ignore or delay. Engage FTA-registered Tax Agent immediately. Respond within statutory timeframes. Prepare all documentation. Do not submit Voluntary Disclosures after an audit notice without legal advice — the penalty structure changes. |
A Voluntary Disclosure is the formal mechanism for correcting errors in previously submitted tax returns. It is submitted via EmaraTax and should be filed as soon as a discrepancy is identified — before the FTA initiates an audit. The 2026 penalty regime makes the timing of a Voluntary Disclosure the single most important variable in determining the total financial cost of a compliance error.
✅ Best Practice: Annual Internal Compliance Review
Businesses that conduct a structured annual internal compliance review — covering CT return accuracy, VAT reconciliation, TP documentation currency, and record completeness — consistently face fewer FTA findings. The cost of a proactive review is always lower than the cost of an audit. DgTx provides this as a standalone advisory service for UAE businesses of all sizes.
Yes. All entities registered in the UAE — whether mainland, free zone, or offshore — are required to register for Corporate Tax and comply with the Federal Tax Authority’s filing, record-keeping and payment obligations. The only exceptions are entities specifically exempted by Cabinet Decision (primarily government bodies and qualifying public benefit organisations). Zero profitability, inactivity, or free zone location does not exempt a business from registration or filing requirements.
Free zone companies must register for Corporate Tax and file returns like all other UAE entities. Those that qualify as a Qualifying Free Zone Person (QFZP) may benefit from a 0% rate on qualifying income — but this is not automatic. Businesses must demonstrate adequate substance, earn qualifying income from permitted activities, and maintain a clean compliance record. Income from UAE mainland transactions may be taxed at 9% unless it falls within specific permitted categories. Losing QFZP status results in the full 9% rate applying to all income.
Corporate Tax returns must be filed within nine months after the end of the relevant financial year. For businesses with a 31 December 2025 year-end, the deadline is 30 September 2026. There are no advance or provisional tax payments — the full liability is settled with the return. Late filing attracts penalties of AED 500–1,000 per month, and late payment carries interest at 14% per annum under the new 2026 penalty regime.
Missing a VAT return deadline results in an AED 1,000 penalty for the first violation. If the same violation occurs again within 24 months, the penalty doubles to AED 2,000. Late payment of VAT carries additional interest at 14% per annum on the outstanding balance under the revised April 2026 framework. The most cost-effective approach is to file on time even if payment cannot be made simultaneously — filing late and paying late doubles the exposure.
Small Business Relief allows UAE businesses with revenues below AED 3,000,000 to elect to treat their taxable income as zero for tax periods 2023, 2024 and 2025. The relief is not automatic — it must be actively elected on the Corporate Tax return filed for each eligible period. The relief is unavailable to members of MNE groups covered by OECD Pillar Two. Importantly, Small Business Relief expires for tax periods ending after 31 December 2026. Businesses currently relying on this relief must begin preparing for standard-regime compliance in 2027.
The Domestic Minimum Top-Up Tax (DMTT) is the UAE’s implementation of the OECD Pillar Two global minimum tax. It applies to constituent entities of Multinational Enterprise groups with consolidated global revenues of at least €750 million (approximately AED 3.15 billion) in at least two of the four preceding fiscal years. If a UAE entity — including a Qualifying Free Zone Person subject to 0% CT — has an effective tax rate below 15%, the DMTT imposes a top-up charge to bring the combined rate to 15%. DMTT applies to financial years commencing on or after 1 January 2025.
Yes. All VAT-registered businesses must submit returns for every filing period, including periods of zero activity. A NIL return must be submitted by the due date even when there is nothing to report. Failure to do so incurs the same penalty as a non-filing on a period with transactions. This is one of the most common and easily avoided compliance errors in the UAE.
A Voluntary Disclosure is the formal mechanism for self-correcting errors in previously submitted UAE tax returns. It is filed through EmaraTax. You should file a Voluntary Disclosure as soon as you identify a material error or omission — and critically, before the FTA issues an audit notice. Filing before an audit notice means you pay the lower penalty tier (1% per month). Filing after an audit notice triggers an additional 15% fixed surcharge on the tax difference, plus 1% per month from the original due date. The financial difference between early and late disclosure can be substantial.
Under Ministerial Decision No. 97 of 2023, UAE businesses must document related-party transactions at arm’s length. A Local File is required when domestic related-party transactions exceed AED 3 million or cross-border controlled transactions exceed AED 6 million. A Master File is required for MNE group members with consolidated revenues above AED 3.15 billion (approximately €750m). All entities with related-party transactions must submit a TP Disclosure Form with their Corporate Tax return, regardless of whether threshold-based documentation is required.
The standard FTA audit limitation period is five years from the end of the relevant tax period. However, under Federal Decree-Law No. 17 of 2025, the FTA can extend this to 15 years if it has reasonable grounds to suspect tax evasion or failure to register. This 15-year window applies from the date the FTA becomes aware of the issue — meaning historical non-compliance carries long-tail risk. Businesses that identify historical errors should self-correct via Voluntary Disclosure rather than assuming the issue will not surface.
Yes. There is a formal two-stage appeal process. First, you may file a Reconsideration Request directly with the FTA within 20 business days of receiving the Tax Assessment. The FTA has 20 business days to respond. If the outcome is unsatisfactory, you may escalate to the Tax Disputes Resolution Committee (TDRC), an independent administrative body that conducts formal hearings and issues binding decisions. As a final resort, further appeals may be taken to the UAE Federal Courts. Engaging an FTA-registered Tax Agent for audit responses and appeals significantly improves outcomes.
For Corporate Tax, all financial and tax records must be retained for a minimum of seven years from the end of the relevant tax period. This includes invoices (issued and received), bank statements, contracts, audited financial statements, payroll records, intercompany agreements, and any documents supporting deductions or exemptions claimed. For VAT, the minimum record retention period is five years. Poor documentation is both a standalone penalty risk and the primary audit trigger — the FTA’s risk algorithms flag businesses with inadequate records.
