UAE Records Review Before Corporate Tax Filing

Are your accounting records ready for a UAE Corporate Tax return, or could a small bookkeeping error create a bigger filing problem?

A records review before Corporate Tax filing UAE businesses can help identify unreconciled balances, missing documents, incorrect classifications and tax adjustments before the return is submitted. Reviewing the trial balance, financial statements, transactions and supporting records gives businesses a stronger starting point for Corporate Tax preparation.

So, what should businesses check before filing? Let’s walk through the key areas step by step.

Why Review Your Records Before Filing Corporate Tax?

A Corporate Tax return is based on financial information, so the quality of the underlying accounting records matters.

The FTA explains that taxable income starts with the accounting net profit or loss and is then adjusted for items specified under the Corporate Tax rules. 

This means an error in the accounting records can potentially flow into the tax calculation. For example, a business may discover during its review that:

• A bank account has unreconciled transactions.
• Revenue has been recorded in the wrong period.
• An expense has been incorrectly classified.
• Intercompany balances do not agree.
• Fixed assets are missing from the register.
• Supporting invoices cannot be located.
• Related-party transactions have not been properly identified.
• Tax adjustments have not been considered.

A pre-filing review gives the business an opportunity to address these issues before completing the return.

What Is a Records Review Before Corporate Tax Filing?

A records review before CT filing UAE businesses undertake is a structured check of the accounting and supporting information that will be used to prepare the Corporate Tax return.

It is not simply about checking whether the accounts balance.

The review should consider whether:

1. The accounting records are complete.
2. Key balances are reconciled.
3. Transactions are correctly classified.
4. Supporting documentation is available.
5. The financial statements agree with the underlying records.
6. Relevant Corporate Tax adjustments have been identified.
7. Related-party transactions have been reviewed.
8. The information required for the tax return is accurate.

The purpose is to create a reliable bridge between bookkeeping and Corporate Tax filing.

1. Review the Trial Balance

The trial balance is one of the first places to start. It provides the closing balances of the company’s accounts and forms an important part of the accounting information used to prepare the financial statements.

During a trial balance review UAE businesses should check whether:

• Debits and credits balance.
• Revenue accounts appear complete.
• Expense accounts are properly classified.
• Bank balances agree with reconciliations.
• Receivables and payables are reasonable.
• Loan balances agree with supporting statements.
• Suspense accounts have been investigated.
• Intercompany balances have been reconciled.
• Unusual or unexpected balances have been reviewed.

Why the trial balance matters for Corporate Tax

The FTA’s Corporate Tax Returns Guide states that accounting income for a juridical person is based on the accounting net profit or loss reported in its financial statements. Therefore, reviewing the trial balance before finalising the accounts can help identify errors before they affect the Corporate Tax calculation.

2. Reconcile Bank Accounts

Bank reconciliation should be another key step in the review.

Compare the accounting records against the company’s bank statements and investigate differences such as:

• Unrecorded bank charges
• Outstanding cheques
• Deposits in transit
• Duplicate entries
• Unidentified receipts
• Unrecorded payments
• Incorrect transaction dates

Old unreconciled balances should not simply be carried forward without investigation. A clean bank reconciliation helps confirm that the cash figures reported in the accounts are supported by actual banking activity.

3. Check Revenue and Sales Records

Revenue should be reviewed before preparing the Corporate Tax calculation. Compare the accounting records with available supporting information, such as:

• Sales invoices
• Customer statements
• Sales reports
• Contracts
• Credit notes
• Debit notes
• Point-of-sale reports, where relevant
• Other revenue records

The objective is to determine whether revenue has been completely and accurately recorded.

Businesses should also investigate unusual movements in revenue compared with previous periods.

For companies with multiple revenue streams, separate categories may need additional review depending on the nature of the income and the applicable Corporate Tax rules.

4. Review Expenses and Supporting Documents

Expenses should also be checked for completeness, classification and supporting documentation. Review major expense categories such as:

• Rent
• Salaries and employee costs
• Professional fees
• Marketing
• Travel
• Utilities
• Insurance
• Repairs and maintenance
• Finance costs
• Depreciation
• Other operating expenses

The purpose is not simply to reduce taxable income. The business needs to determine whether expenses have been recorded correctly and whether any Corporate Tax adjustment is required.

The FTA explains that legitimate business expenses incurred to derive taxable income are generally deductible, subject to the Corporate Tax rules and specific limitations. 

5. Review Receivables and Payables

Outstanding customer and supplier balances can reveal accounting issues that need to be resolved before filing. For receivables, review:

• Long-outstanding invoices
• Credit notes
• Bad debt balances
• Customer advances
• Unusual debit balances

For payables, review:

• Old supplier balances
• Unrecorded invoices
• Supplier advances
• Debit balances
• Unusual or dormant accounts

This process can help identify transactions that may have been recorded incorrectly or remain unresolved at year-end.

6. Check Fixed Assets and Depreciation

Businesses with equipment, vehicles, machinery, computers or other fixed assets should review their asset records. Compare the fixed asset register with the general ledger and identify:

• New asset purchases
• Asset disposals
• Transfers
• Missing assets
• Incorrect asset classifications
• Depreciation entries

The FTA has specifically identified records of assets, including purchases and disposals, among the records Taxable Persons should maintain. 

A review can therefore help ensure that the accounting records and supporting asset documentation are consistent.

7. Review Loans and Other Liabilities

Loan and liability balances should also be checked. For bank and shareholder loans, compare the accounting records with relevant agreements and statements.

Review:

• Opening balances
• New loans
• Repayments
• Interest
• Closing balances
• Related-party financing
• Intercompany loans

Where financing involves Related Parties or Connected Persons, additional Corporate Tax and transfer pricing considerations may apply.

The FTA confirms that transfer pricing rules apply to transactions involving Related Parties and Connected Persons, including transactions within the UAE and across borders. 

8. Check Related-Party Transactions

This is an important part of a tax records checklist for groups and businesses with related entities. Look for transactions such as:

• Management fees
• Intercompany services
• Loans
• Interest
• Shared costs
• Asset transfers
• Licensing arrangements
• Purchases or sales between related entities

The review should establish whether these transactions are correctly recorded and appropriately supported.

Businesses should also determine whether relevant transfer pricing documentation or disclosures are required.

9. Review Accounting Adjustments for Corporate Tax

One of the most important steps is comparing accounting profit with taxable income. The FTA explains that taxable income is based on accounting net profit or loss after adjustments required under the Corporate Tax Law. 

Potential areas for review include:

• Exempt income
• Non-deductible expenditure
• Unrealised gains or losses
• Intra-group transfers
• Related-party transactions
• Tax losses
• Tax reliefs
• Other applicable adjustments

The FTA’s Corporate Tax Returns Guide specifically includes a section for accounting adjustments and exempt income when determining taxable income. 

Keep a clear tax reconciliation

A good working paper should show the movement from:

Accounting profit/loss → Tax adjustments → Taxable income → Corporate Tax payable

This makes the calculation easier to review and explain.

10. Check Financial Statements

Before filing, the final financial statements should be reviewed against the underlying accounting records.

Check that:

• The profit and loss statement agrees with the ledger.
• The balance sheet balances.
• Cash balances agree with reconciliations.
• Receivables and payables are supported.
• Fixed assets agree with the asset register.
• Loans agree with supporting records.
• Equity balances are properly explained.
• Significant year-end adjustments have been reviewed.

The FTA’s Corporate Tax Returns Guide states that resident juridical persons use the accounting net profit or loss from their financial statements as the accounting income figure in the return. 

11. Review Supporting Documents

Good bookkeeping is not only about numbers. Businesses should also be able to support important balances and transactions with appropriate records.

Depending on the business, this may include:

• Invoices
• Contracts
• Bank statements
• Receipts
• Payroll records
• Loan agreements
• Lease agreements
• Asset purchase documents
• Customer and supplier statements
• Related-party agreements

The FTA has stated that Taxable Persons must maintain records and documents supporting the information provided in their Corporate Tax returns. 

12. Check the Information Required for the Tax Return

Once the accounts have been reviewed, businesses can check whether the information needed for the actual return is available.

The FTA’s Corporate Tax Returns Guide provides detailed guidance on completing the return and explains the information that may be required.

Businesses should verify information such as:

• Tax Period
• TRN
• Accounting basis
• Accounting income
• Taxable income
• Tax losses
• Reliefs
• Tax credits, where applicable
• Corporate Tax payable

Pre-Filing Records Review Checklist

Businesses can use the following checklist before starting the Corporate Tax return:

• Trial balance
• General ledger
• Bank reconciliations
• Revenue records
• Expense records
• Receivables
• Payables
• Fixed asset register
• Loan and liability balances
• Related-party transactions
• Transfer pricing records, where applicable
• Financial statements
• Tax adjustments
• Supporting documents
• Tax return information

This checklist is a practical starting point. The appropriate review will depend on the company’s size, activities, accounting system and Corporate Tax position.

Common Problems Found During a Pre-Filing Review

A records review can uncover several issues that may otherwise remain unnoticed until after filing.

• Unreconciled balances: Old balances in bank, receivable, payable or suspense accounts can indicate incomplete bookkeeping.
• Missing supporting documents: A transaction recorded in the accounts may still require supporting documentation to establish its nature and business purpose.
• Incorrect expense classification: An accounting expense may require further review before it is included in the Corporate Tax calculation.
• Unrecorded transactions: Payments, invoices, accruals or other transactions may not have been recorded before the accounts were closed.
• Intercompany differences: Balances between related companies may not match, particularly where each entity maintains separate accounting systems.
• Tax adjustments overlooked: Accounting profit does not always equal taxable income. Relevant adjustments need to be identified before finalising the return.

How Long Should Businesses Keep Corporate Tax Records?

Businesses should also consider record retention as part of their pre-filing process. The FTA states that Taxable Persons and Exempt Persons must generally retain relevant records and documents for at least seven years following the end of the relevant Tax Period. 

The FTA also explains that records should support the information reported in Corporate Tax returns and may include transaction, asset, liability and shareholding records. Businesses should therefore establish an organised system for storing records by entity and Tax Period.

When Should You Review Your Records?

A records review should ideally begin before the Corporate Tax filing deadline, not immediately before submitting the return.

Starting early gives the business time to:

1. Complete bookkeeping.
2. Reconcile accounts.
3. Investigate unusual balances.
4. Collect missing documents.
5. Review tax adjustments.
6. Resolve intercompany differences.
7. Prepare the Corporate Tax calculation.
8. Review the final return before submission.

The FTA states that Corporate Tax returns and Corporate Tax payable are generally due within nine months from the end of the Tax Period. 

Using that period for preparation rather than waiting until the deadline can make the filing process much smoother.

How Ripple Can Help With a UAE Records Review

A Corporate Tax return is only as reliable as the financial information behind it. If bookkeeping records contain unreconciled balances, missing documents or unclear transactions, identifying these issues before filing can be valuable.

Ripple Accountants can help businesses review their accounting records before Corporate Tax filing and identify areas that may need attention. A compliance review can cover areas such as:

• Trial balance review
• General ledger review
• Bank reconciliation checks
• Revenue and expense review
• Receivables and payables
• Fixed asset records
• Related-party transactions
• Supporting documentation
• Corporate Tax adjustment review
• Pre-filing compliance checks

If you are preparing for your UAE Corporate Tax return and want an independent review of your records, contact Ripple Accounting, Tax & Advisory to discuss the the support your business requires.

• Email: info@uaetaxcompliance.ae 
• Phone: +971 52 356 5409
• WhatsApp: +971 4 250 0833

Explore Ripple Compliance Review Services

FAQs

1. What should I review before filing Corporate Tax in the UAE?

Businesses should review the trial balance, general ledger, bank reconciliations, revenue, expenses, receivables, payables, fixed assets, liabilities, related-party transactions, financial statements and relevant Corporate Tax adjustments.

2. Why is a trial balance review important before Corporate Tax filing?

The trial balance provides the closing balances used in preparing financial statements. Reviewing it can help identify unreconciled accounts, incorrect classifications and unusual balances before they affect the Corporate Tax calculation.

3. Does accounting profit equal taxable income in the UAE?

Not always. The FTA states that taxable income starts with accounting net profit or loss and is adjusted for items specified under the Corporate Tax rules. 

4. How long should UAE Corporate Tax records be kept?

Relevant records and documents should generally be retained for at least seven years following the end of the relevant Tax Period. 

5. Can Ripple review our records before Corporate Tax filing?

Yes. Ripple can provide a compliance review covering areas such as the trial balance, accounting records, reconciliations, supporting documentation and Corporate Tax-related adjustments. Businesses can contact Ripple to discuss the appropriate scope and requirements.

Conclusion

A records review before CT filing UAE businesses conduct can help connect accurate bookkeeping with a more reliable Corporate Tax return. Reviewing the trial balance, bank reconciliations, revenue, expenses, assets, liabilities, related-party transactions and tax adjustments can help identify problems before they reach the filing stage. The aim is not simply to make the accounts balance. It is to ensure that the financial information used for Corporate Tax is complete, supported and properly reviewed. Businesses should also keep the relevant records for the required retention period and refer to the latest FTA guidance when preparing their returns.

Disclaimer: This article is provided for general informational purposes only and does not constitute tax, accounting, legal or financial advice. Corporate Tax requirements can vary according to a business’s structure, activities, accounting records and specific circumstances. UAE legislation and FTA guidance may also be updated. Businesses should review the latest official FTA guidance and obtain professional advice before making Corporate Tax filing or compliance decisions.