Accounting & Bookkeeping – UAE Compliance
1. Legal Foundations & Record-Keeping Obligations
Under Federal Decree-Law No. 28 of 2022 (Tax Procedures Law) and Cabinet Decision No. 74 of 2023, all businesses in the UAE must maintain proper accounting records and commercial books showing:
Payments and receipts
Sales and purchases
Revenues and expenses
Profit and loss accounts
Balance sheet
Wage and salary records
Fixed asset register
Inventory details
These records must be preserved in a retrievable format—either as original documents or accurate electronic copies—and must be accessible during any Federal Tax Authority (FTA) audit.
2. Document Retention Periods
General business records: 5 years from the end of the relevant tax period.
Real estate–related records: 7 years (can be up to 15 years in some VAT cases).
Capital or fixed asset records: 10 years.
Real estate ownership documents: up to 15 years.
3. Format & Language Requirements
Records may be maintained in electronic or paper form but must be clear, complete, and accessible.
The FTA accepts records in English or Arabic. Non-Arabic records must be translated into Arabic upon request.
4. Standards & Best Practices
Accounting records should comply with International Financial Reporting Standards (IFRS) to ensure accurate financial statements, audit readiness, and tax compliance.
Best practices include:
Using FTA-accredited accounting software.
Maintaining proper VAT input/output tracking.
Conducting regular reconciliations for bank accounts, VAT returns, and ledgers.
5. Penalties for Non-Compliance
As per FTA regulations:
Failure to maintain proper books: AED 10,000 (first offense), AED 20,000 (repeat offense).
Late VAT return submission: AED 1,000 (first), AED 2,000 (repeat within 24 months).
Late VAT payment: 2% of the unpaid tax immediately, 4% after one month, plus 1% daily thereafter (up to 300%).
Missing tax invoices or credit notes: AED 5,000 per document.
Failure to provide Arabic records when requested: AED 20,000.
Undeclared imports or inaccurate filings: up to 50% of unpaid tax.
6. Service Value and Client Impact
By maintaining compliant and organized accounting and bookkeeping records:
Legal Assurance – Meets all FTA obligations under UAE tax laws.
Risk Mitigation – Avoids costly penalties.
Audit Preparedness – Ensures smooth FTA inspections.
Financial Clarity – Provides accurate reporting for strategic decision-making.
Operational Efficiency – Improves control over finances and supports growth.