January 2018 marks the moment for all VAT registered businesses across the GCC to start keeping records of their transaction documents: invoices, records, VAT returns, accounts and others. According to the Tax Procedures Law recently released by the President of the UAE, the retention period of VAT records for all UAE-based businesses will be 5 years. This new obligation will be particularly challenging to organisations with a big volume of documents, such as trading companies, because it implies extra administrative duties and additional costs of space rental. With this in mind, electronic archiving appears to be a true enabler and facilitator for GCC businesses, offering compliance with the legal changes and easy access to transaction documents for tax audits.
E-archive is a solution for any organization that is required to store e-documents for an extended period of time. Data is housed in the controlled area designed for the long-term data storage. This means that only authorised users have access to documents and, when needed, they can retrieve them.
“In contrast to traditional, paper-based archive, the electronic archiving solution ensures greater security of data. Apart from access control, time stamping is a must-have in terms of e-archiving solution. A time stamp confirms that a document has not been changed since its creation day as well as guarantees a correct issuer. Importantly, time stamping and access control are compliant with the Federal Law No. (1) of 2006 On Electronic Commerce and Transactions in the UAE” – Łukasz Spirała, Business Development Manager at Infinite IT Solutions, explains.
In the UAE, tax audits will be carried out by the Federal Tax Authority (FTA) to examine if a company is compliant with the provisions of the Tax Law. In the event of a tax audit, businesses using e-archive solutions will be able to provide the FTA with a temporary access to e-documents via the administration panel. There, the tax authority will be able to retrieve both a printable document and an original file of this document.
With e-archive suite, GCC businesses are ready to step up to the document archiving challenge. By moving trade documents into the paperless archive companies across the GCC will achieve VAT compliance in terms of documents storage as well as substantial operational savings.