FTA Accredited Tax – Accounting Software Requirements

Tally Solutions | Updated on: February 8, 2022


With the introduction of VAT on 1st January 2018, accounting software plays a vital role in helping businesses to comply with the VAT requirements. Filing of VAT returns- Monthly or Quarterly, maintaining the books of accounts for a period of 5-10 years, issuing Tax Invoices/Credit notes, generating Audit File (FAF), etc. are some of the major VAT requirements.

No matter, how big or small is your business, whether you deal with thousands of transactions or a few hundred? Accounting software is an invaluable technology compliance resource for your business. In the era of VAT, the need of the hour is integrated software that gives, businesses ease of accounting, quick reporting, and more importantly, error-free VAT return filing.

With the similar objective of making the taxpayer's life easier, the Federal Tax Authority (FTA) has issued strict requirements which an accounting software should meet in order to be qualified as 'Tax Accounting Software'.

Let's understand what is Tax Accounting Software? And the key requirements which a Tax Accounting Software should adhere to.

What is Tax Accounting Software?

Apart from meeting the business requirements like managing accounts payable, accounts receivable, inventory management, order management, billing, etc. the accounting software is one which helps the businesses in producing the accounting information into tax reporting.

For example, the sales transaction recorded in tax accounting software will help you to generate VAT compliant invoices (Tax Invoice), reporting of sales and VAT details into VAT Returns (VAT Return Form 201), and maintain and generate various other reports like Audit files (FAF ) as required by the law. On the other side, it also takes care of your business needs like generating the sales registers, Accounts receivable and various other MIS reports as required by the businesses.

Therefore, tax accounting software is accounting software that has an inbuilt capability to generate the tax reporting from its accounting records with zero or minimum efforts. In simple words, it's accounting software that fully meets your business needs and 100% complies with VAT requirements.

Key requirements for Tax Accounting Software issued by FTA

To put the FTA's requirements in a broader perspective, a Tax accounting software must have the ability to automatically generate FTA Audit File (FAF), VAT returns in the prescribed format, and VAT compliant tax invoice and Credit/Debit Note. These are functional guidelines that a Tax Accounting Software should include along with various other non-functional requirements.

The following are some of the key requirements of Tax Accounting Software.

  • The tax accounting software should automatically generate non-editable VAT return files as per the format prescribed by FTA. More importantly, with minimum or zero efforts or without the help of any other IT specialist.
  • Automatic generation of FAF (Audit File) by a user. The FAF should be complete, accurate, and in a format that is readable by the FTA.
  • Supports issuance of tax invoices, credit/debit notes, and self-billed invoices that comply with the VAT Law.
  • The tax accounting software must be accompanied by comprehensive documentation to assist auditors, both internal and government, and users, in understanding how the software operates. This would include a user manual (printed and/or web-based) and thorough system-based help files.
  • Access controls to ensure that only authorized users can access and process data based on the permissions given
  • Password control features should be built into the system, i.e. password change upon initial login, minimum password length, password complexity, Password history, etc.
  • Inbuilt capabilities to prevent, detect and correct the Incomplete and invalid data to ensure that details in VAT return and FAF file are complete and accurate.
  • Inbuilt control to prevent the editing and deleting of entries made.
  • The tax accounting software has suitable provisions for back-up of data and restores as when required.
  • The system should allow the creation of multiple user profiles with different access rights
  • The system should have the capability to generate configured reports weekly, monthly, quarterly, and annually.

The above are some of the key tax accounting software requirements that software needs to meet in order to get FTA certification or accreditation.

At regular intervals, FTA verifies the Tax Accounting Software in accordance with the guidance issued. The accounting software which meets the requirements is accredited or certified by FTA as 'Tax Accounting Software' and is listed in FTA's Tax Accounting Register (TASR).

Click Here to access the list of FTA accredited Tax accounting Software.

It is highly recommended for businesses to use the tax accounting software which is certified or accredited by FTA. This is because, it guarantees to automate all tax-based responsibilities, i.e., keeping track of records, payments, file returns, etc., and saving businesses time and reducing the compliance cost.

Read more about Federal Tax Authority (FTA)

What is FTA Audit File (FAF), e-guarantee Cancellation in FTA portalSteps to Submit e-guarantee in FTA portalAdministrative Penalties under Tax Procedures Law by FTA in UAEChange in business details to be notified to FTABenefits of using FTA Approved Tax Accounting Software in UAE


UAE VAT Return, VAT in UAE, How Does VAT System Works, Frequently Used Terms in VAT, VAT Exempt Supplies in UAE, VAT Return Form 201, Tax Audit under VAT in UAE, Supply under UAE VAT, Supply of Goods and Services in UAE VAT, Input Tax Recovery under VAT in UAE, VAT Return Filing in UAE, VAT Return Filing Period in UAE, Tax Agent under UAE VAT

VAT Payment

VAT Payment in UAE, How to Make VAT Payment using GIBAN, How to make VAT Payment to FTA in UAE, VAT Payment on Import of Goods in UAE, VAT Payment through e-guarantee in UAE, VAT payment on commercial property in FTA Portal, VAT payment on import in FTA portal


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