—
type: Case Studies
focuskw: UAE corporate tax record keeping penalty
desc: A Dubai tech company faced an FTA audit without proper records. Here is how businesses avoid AED 10,000-20,000 penalties under UAE Corporate Tax law.
status: publish
—
# The Challenge
"We assumed our accounting software was enough. When the FTA asked for seven years of ledgers, contracts and supporting invoices during an audit, we simply couldn't produce them all — and we didn't realise that gap alone could trigger a penalty."
A growing Dubai-based technology company, which we will call Tech Solutions Co, ran into exactly this problem. Under UAE Corporate Tax law, businesses are required to maintain accounting books, ledgers, contracts and supporting documents for a full seven years, and when the FTA selected the company for a routine review, its records were incomplete.
Under Cabinet Decision 75/2023 (Violation No. 1), failure to maintain the required records carries an administrative penalty of AED 10,000 for a first offence, rising to AED 20,000 if the same violation recurs within 24 months — a real and avoidable cost sitting on top of the disruption of an audit itself.
# Our Approach
– Record-keeping audit — we review what a client currently retains against the full seven-year FTA requirement, covering ledgers, contracts, invoices and bank records.
– Structured filing systems — we set up clear digital and physical retention processes so documents are organised, backed up and retrievable the moment the FTA asks.
– Ongoing compliance checks — we build record retention into regular bookkeeping cycles rather than treating it as a one-off exercise, so gaps never accumulate unnoticed.
The principle is simple: the FTA does not just want tax paid correctly, it wants proof that it was, and that proof has to survive for seven years, not seven months.
# The Result
By putting disciplined, audit-ready record-keeping in place from the outset, businesses in this position can avoid the AED 10,000 to AED 20,000 penalty range entirely under Cabinet Decision 75/2023, and walk into any future FTA audit with confidence rather than exposure.
# The Takeaway
"Keeping accurate records isn't just good practice — under UAE Corporate Tax law it's a legal requirement for seven years, and the penalty for falling short is entirely avoidable."
