Definition

A Tax Audit Trail is the detailed record of accounting entries and supporting documents that show how VAT and Corporate Tax were calculated and reported.

Key points

• Must include invoices, ledgers, and reconciliation files.
• Required for FTA audits and inspections.
• Data must be stored for five years (or seven for real estate).
• Should link every tax filing to the source transaction.

Practical example

During an audit, the FTA requests the company’s tax audit trail showing all invoices tied to its VAT return for Q2 2024.

Why it matters

A complete audit trail ensures transparency and compliance, reducing risk during FTA reviews.