How long should documents be retained in the UAE?

Are you aware of the crucial role document retention plays in the success and compliance of businesses in the UAE? From financial transparency to legal requirements, proper management of documents is essential.

Navigating the various laws and regulations governing document retention can be overwhelming. Join us as we explore the recommended retention periods, uncover the importance of document retention, and discover we can assist you in storing, digitizing, and securely destroying your documents.

VAT Records: 5-Year Retention Period

In order to comply with VAT regulations in the UAE, businesses are required to maintain thorough accounts and records. These records should be retained for a period of 5 years after the end of the tax period to which they relate.

For example, a tax invoice for supply in April 2018 would relate to the tax period of January – December 2018 and should be retained until 31st December 2023.

There are some exceptions to this, such as records pertaining to capital assets like machinery, which should be retained for 10 years from the end of the tax period, and documents related to real estate, which should be kept for at least 15 years.

Corporate Tax Records: 7-Year Retention Period

Under the new corporate tax law in the UAE, which took effect on 1st June 2023, taxpayers are obligated to prepare and retain financial statements to accurately calculate their taxable income. Furthermore, it is essential to maintain all supporting documents and records that validate the information provided in the Corporate Tax return or any other filings submitted to the Authority. Exempt individuals or entities must also preserve all records that substantiate their exempt status.

Records and documents should be retained for at least 7 years following the end of the relevant Tax Period.

Employee Records: 7-Year Retention Period

Employee records play a crucial role in managing human resources and complying with labor regulations. In the UAE, it is recommended to retain employee records, such as payroll records, timesheets, and performance reviews, for at least 7 years after an employee leaves the company. However, if an employee suffers a work-related accident or files a claim against the business, it’s advisable to retain your records for up to 10 years after the claim is resolved.

Contractual Records: 7-Year Retention Period

Contractual records are essential for documenting agreements and protecting the rights of all parties involved. Purchase orders, sales contracts, leases, and other contractual records should be retained for at least 7 years after the contract ends. This allows for future reference and potential dispute resolution.

Compliance Records: Ongoing Retention

Compliance records are directly linked to industry-specific regulations and ensure adherence to legal requirements. Documents such as environmental permits and safety records should be kept for as long as the company is subject to the relevant regulations. This ongoing retention helps demonstrate compliance and allows for historical reference during inspections or audits.

Ownership Records: Indefinite Retention

Certain vital documents should be retained permanently by businesses. These include business formation documents, annual meeting minutes, by-laws, stock ledgers, and property deeds. By keeping these documents, companies ensure a reliable and enduring record of their formation, governance, ownership, and valuable property assets for future reference, compliance, and analysis.

Factors Influencing Document Retention Periods:

Industry or location Specific Regulations:

Different industries may have specific regulations dictating extended retention periods for certain documents. For example, financial institutions might be required to retain records for 7 years, while healthcare providers may have a 10-year-plus retention requirement. Additionally, free zones within the UAE, such as Jebel Ali, Ras Al Khaimah, and the Dubai International Financial Centre (DIFC), have their unique legal requirements for companies operating within them.

Business Size:

The size of a business can impact document retention periods. Larger businesses often have more extensive record-keeping requirements due to their scale of operations. They may be required to retain records for longer periods compared to smaller firms. Understanding the specific retention requirements for your business size is essential for compliance.

Likelihood of Litigation:

Businesses involved in litigation may need to retain records for longer periods as potential evidence. If there is a high likelihood of litigation, it is prudent to extend the retention period to preserve relevant documents that may be required for legal proceedings.

Managing document retention can be a complex task for businesses; with varying retention periods and the need to comply with industry-specific regulations, it becomes crucial to have a reliable partner to assist in this process. That’s where we come in.

Whether you require secure physical storage, efficient digitization of documents, or secure destruction once the retention period is over, Crown has the expertise and resources to support you. With our trusted services, you can ensure proper management of your records while maintaining compliance and freeing up valuable space within your organization.