With VAT and corporate tax now part of doing business in the UAE, bookkeeping is no longer just good practice. It’s how you prove your tax figures. The Federal Tax Authority (FTA) can ask for your records years later, and gaps can lead to administrative penalties. The good news: the rules are clear, and a simple monthly routine keeps you compliant.
This guide covers which records to keep, how long to keep them, when audited financial statements are required, and a practical monthly routine for small businesses.
Why bookkeeping matters more than ever
- Corporate tax is calculated from your financial statements, so your books are the starting point of every corporate tax return.
- VAT returns must match your sales and purchase invoices.
- Banks, investors and authorities increasingly ask for proper accounts when you open accounts, apply for finance or renew approvals.
Records you must keep
Keep complete, organised records that support every figure in your accounts and tax returns:
- Financial statements: balance sheet, profit and loss, cash flow and notes.
- Sales and purchase invoices, receipts and supplier bills, including tax invoices for VAT.
- Bank statements and monthly bank reconciliations.
- Payroll records, including salaries, benefits and end-of-service calculations.
- Fixed asset register, listing equipment, vehicles and fit-out.
- Contracts and agreements with clients, suppliers and landlords.
- Supporting documents such as delivery notes, shipping and customs papers.
- Related-party records for transactions with owners or group companies.
How long to keep records
| Purpose | Keep records for |
|---|---|
| Corporate tax | At least 7 years after the end of the financial year they relate to |
| VAT | Follow the FTA’s VAT retention rules, and keep them at least as long as your corporate tax records to be safe |
Example: for a financial year ending 31 December 2025, keep the records until at least 31 December 2032.
When are audited financial statements required?
Under Ministerial Decision No. 84 of 2025, which applies to tax periods starting on or after 1 January 2025, the following must prepare and keep audited financial statements for corporate tax:
| Business | Audit required? |
|---|---|
| Taxable person with revenue above AED 50 million in the tax period | Yes |
| Tax groups | Yes (audited special purpose financial statements) |
| Qualifying Free Zone Persons | Free zone companies claiming the 0% rate have specific requirements; check the FTA’s current guidance |
| Other small and medium businesses | Not required for corporate tax, but you must still keep proper accounts |
Your free zone authority, bank or licensing authority may also ask for audited accounts, whatever your revenue.
A simple monthly bookkeeping routine
- Record every sale and expense in accounting software, not just in spreadsheets.
- Keep digital copies of every invoice and receipt, linked to the transaction.
- Reconcile your bank accounts every month, so the books match the bank.
- Separate business and personal spending. Use a business bank account only.
- Check VAT on every invoice and keep tax invoices for anything you reclaim.
- Run payroll records, including end-of-service provisions.
- Review a monthly profit and loss statement to catch errors early.
- Close the year properly with year-end adjustments, then prepare the financial statements for your corporate tax return.
Common bookkeeping mistakes
- Mixing personal and business transactions.
- Missing tax invoices for VAT you have claimed back.
- Not reconciling the bank until year-end.
- Deleting old records before the 7-year period ends.
- Waiting until the tax deadline to sort out a year of receipts.
Frequently asked questions
How long must UAE businesses keep accounting records?
For corporate tax, at least 7 years after the end of the relevant financial year.
Does my small business need audited financial statements?
For corporate tax, audits are required if revenue exceeds AED 50 million and for tax groups. Free zone companies claiming the 0% rate should check the FTA’s current guidance. Other businesses must still keep proper accounts.
Can I keep records digitally?
Yes. Digital records are standard. Make sure they’re complete, backed up and easy to produce if the FTA asks.
Do I need accounting software?
It isn’t a legal requirement, but it makes VAT returns, corporate tax and record-keeping far easier and more accurate.
Get your books in order
Bin Gohar PRO Services offers bookkeeping, VAT and corporate tax support for small and growing businesses in Dubai and across all seven Emirates. Message us on WhatsApp at +971 50 178 9163, or see our accounting and bookkeeping services.
Also useful: Corporate Tax Registration in the UAE and VAT Registration in the UAE.
Sources: PwC — Ministerial Decision No. 84 of 2025 on audited financial statements; Bestax — Maintaining accounting records for UAE corporate tax; Federal Tax Authority.
This guide gives general information, not tax or accounting advice. Check your situation with a registered tax agent or the FTA.
