This guide lists the records the law requires, how long to keep them, the audit and transfer pricing thresholds, a worked VAT-to-corporate-tax revenue reconciliation, and the penalties for gaps.
Which corporate tax records does the law require?
Article 56 of the Corporate Tax Law requires the records that support your tax return and let the FTA verify your taxable income. The FTA says the core of those records is every transaction, every asset bought or sold, your liabilities, and the shares you hold at period end.
The Executive Regulation of the Tax Procedures Law (Cabinet Decision No. 74 of 2023, Article 2) lists the types of record:
| Record | What it should show |
|---|---|
| Balance sheet and profit and loss | The accounts the return is based on |
| General ledger and journals | Every transaction behind those accounts |
| Fixed asset records | Additions, disposals and depreciation |
| Inventory records | Stock movements and valuation |
| Payroll records | Salaries, benefits and end-of-service provisions |
| Invoices, contracts and licences | The evidence for income and expenses |
Electronic copies are acceptable if they are identical to the original (Article 4). The FTA may accept records in English but can ask for an Arabic translation (Article 5).
Businesses that claim Small Business Relief or are exempt still have to keep records: exempt persons must keep the records that show they qualify for exemption.
How long must you keep corporate tax records?
Keep them for at least 7 years after the end of the tax period they relate to. VAT's general minimum is five years, but the Corporate Tax Law sets 7, so 7 is the period to plan for. Keep records about real estate for 15 years.
| Financial year ends | Return due | Keep records until at least |
|---|---|---|
| 31 December 2024 | 30 September 2025 | 31 December 2031 |
| 31 December 2025 | 30 September 2026 | 31 December 2032 |
| 30 June 2026 | 31 March 2027 | 30 June 2033 |
| 31 December 2026 | 30 September 2027 | 31 December 2033 |
Do not destroy records for a period the FTA is still reviewing or that is under dispute, even if the retention period has passed.
Two 2026 changes make long retention matter. Since 1 January 2026, amendments to the Tax Procedures Law give you five years from the end of a tax period to claim a refund, after which the right is lost. The FTA's default window to audit and assess also stays at five years. If you claim a refund in the fifth year, the FTA can still audit that claim within two years of the date you submitted it. Records are your only defence in both directions.
Do you need audited financial statements?
You need audited financial statements if your revenue is above AED 50 million, if you are a Qualifying Free Zone Person, or if you file as a Tax Group. Ministerial Decision No. 84 of 2025 sets these rules for tax periods starting on or after 1 January 2025, replacing the 2023 decision.
| Your business | Audited financial statements? | Accounting standard |
|---|---|---|
| Revenue above AED 50 million | Yes | IFRS |
| Qualifying Free Zone Person, any revenue | Yes | IFRS, or IFRS for SMEs if revenue is AED 50 million or less |
| Tax Group | Yes, special-purpose statements for the group | Same revenue tests as a single business |
| Revenue AED 50 million or less | Not required for tax | IFRS for SMEs allowed |
| Revenue AED 3 million or less | Not required for tax | Cash basis allowed |
The accounting standard rules come from Ministerial Decision No. 114 of 2023. A non-resident tests only the revenue of its UAE permanent establishment or nexus.
Even when an audit is not required, the FTA compares your return with your financial statements first. Statements that agree with the trial balance and the return, line for line, are the strongest record you can keep.
What related-party and transfer pricing records do you need?
Every business must be able to show that transactions with related parties were priced at arm's length. Full transfer pricing files are needed only above set thresholds, but a list of related parties and what you traded with them is needed by almost everyone.
| Requirement | When it applies | Source |
|---|---|---|
| Master file and local file | Your revenue is AED 200 million or more, or your group's consolidated revenue is AED 3.15 billion or more | Ministerial Decision No. 97 of 2023 |
| Transfer pricing disclosure form with the return | Related-party transactions total more than AED 40 million; each category above AED 4 million is listed | FTA Tax Returns Guide |
| Connected-persons schedule | Payments to a connected person, such as an owner or director, exceed AED 500,000 | FTA Tax Returns Guide |
| Documents on request | Any business: provide transfer pricing documents within 30 days of an FTA request | Corporate Tax Law, Article 55 |
For most SMEs, the practical record is a related-party register kept up to date through the year: each related party, the type of transaction, the annual amount, and how the price was set. Building it from memory in month nine, when the return is due, is where errors start.
What will the FTA or your auditor ask for first?
After the first corporate tax filing cycle, the FTA began sending review questionnaires by email. EY reports that the financial statements are the main check against the return, and that businesses should have related-party lists, reconciliations, working papers and transfer pricing support ready. Advisers also expect the FTA to compare revenue in your VAT returns with revenue in your corporate tax return.
Prepare this first-response pack before anyone asks:
Worked example: VAT to corporate tax revenue. The accounts show revenue of AED 18,400,000. The four VAT returns for the year report total supplies of AED 18,150,000.
| Item | AED |
|---|---|
| Revenue per financial statements | 18,400,000 |
| Less: revenue accrued but not yet invoiced at year-end (no VAT supply yet) | (450,000) |
| Add: advances received in December, taxed for VAT, recognised as revenue next year | 200,000 |
| Total supplies per VAT returns | 18,150,000 |
Each reconciling item is a timing difference you can evidence. A difference you cannot explain is what turns a questionnaire into an audit. For the VAT side, see UAE VAT Return Mistakes: 8 Errors to Catch Before You File.
What are the deadlines and penalties?
The corporate tax return and payment are due 9 months after the end of the tax period. Failing to keep the required records costs AED 10,000, or AED 20,000 if repeated within 24 months, under Cabinet Decision No. 75 of 2023.
| Violation | Penalty |
|---|---|
| Failure to keep records | AED 10,000; AED 20,000 for a repeat within 24 months |
| Failure to provide information in Arabic when requested | AED 5,000 |
| Late tax return | AED 500 per month for the first 12 months, then AED 1,000 per month |
| Late payment | 14% a year, charged monthly |
| Late registration | AED 10,000 |
The FTA waives the late-registration penalty if the first return is filed within 7 months of the end of the first tax period.
An FTA audit starts with 10 business days' notice. During the audit, the FTA can inspect your premises, your electronic records and your accounting system, and can copy records. Ten days is not long enough to rebuild a year, which is why the first-response pack above should exist before the notice arrives.
Where are corporate tax records usually weakest?
In our work with HYP ERP customers, the gaps are rarely in the main ledger. They sit in the schedules that explain the ledger to a tax reader.
| What we see | Why it matters | The fix |
|---|---|---|
| Entertainment mixed into general expenses | The disallowed 50% cannot be calculated | Use a separate expense account for client entertainment |
| Related parties not flagged in the customer and supplier masters | The related-party schedule is built by hand | Flag related parties in the master data |
| Fixed asset register kept in a spreadsheet | Depreciation and disposals do not agree to the ledger | Keep the register in the ERP and post depreciation from it |
| VAT and corporate tax prepared by different people, separately | Revenue does not reconcile between the two | Reconcile VAT revenue to the accounts every quarter |
| Records kept only by the previous accountant | Seven-year retention fails when people leave | Keep records in the company's system, not personal folders |
Most of these fixes are master-data settings made once. They save a week of reconstruction every year the return is prepared.
Sources
- Federal Decree-Law No. 47 of 2022 on Corporate Tax, consolidated with amendments
- FTA: press release on corporate tax records and return deadlines, 27 August 2025
- Cabinet Decision No. 74 of 2023, Executive Regulation of the Tax Procedures Law
- Ministerial Decision No. 84 of 2025 on audited financial statements
- Ministry of Finance: transfer pricing documentation decision (No. 97 of 2023)
- Cabinet Decision No. 75 of 2023 on corporate tax penalties, with amendments
- FTA: waiver of the late-registration penalty, 7 May 2025
- The National: Small Business Relief extended to 2029, 7 August 2026
- Deloitte: transfer pricing disclosures in the tax return, 26 November 2024
- EY: UAE completes first corporate tax compliance cycle, 24 November 2025
- KPMG: Federal Decree-Laws No. 16 and 17 of 2025