Accounting for Companies in the UAE

Accounting in the UAE

Accounting in the UAE is a crucial element for the successful operation of a company amidst the rapidly evolving business landscape of the Emirates.

Accurate bookkeeping is vital for the correct preparation of financial statements, which are now mandatory for both local UAE companies and free zone companies.

The importance of recording financial transactions has become particularly pronounced following the introduction of Value Added Tax (VAT) in 2018 and Corporate Income Tax in 2023.

Accounting Services in Dubai (UAE)

Our company offers comprehensive accounting services in Dubai. We provide bookkeeping, preparation and support of financial statement audits, registration for Corporate Income Tax and VAT, preparation and submission of tax returns, and tax consultations.

Service How We Can Help
Accounting

We will develop an appropriate accounting policy, ensure quality bookkeeping, and interact with your representatives on any arising issues.

Financial Statements

We will promptly prepare IFRS-compliant financial statements that provide a true and fair view of your company’s financial position and performance.

Audit Support

We will facilitate the audit process in full compliance with UAE legislation and international auditing standards.

Corporate Tax Management

We provide necessary consultations and assistance on corporate taxation in the United Arab Emirates, including:

  • Registration for Corporate Income Tax in the UAE and obtaining a Tax Registration Number (TRN);
  • Preparation and submission of tax returns;
  • Consultations on domestic and international taxation of your company;
  • Analysis of opportunities to reduce your tax burden.
VAT (Value Added Tax) Services

We provide support on matters related to VAT in the UAE, including VAT registration with the Federal Tax Authority (FTA), submission of tax returns, and VAT refunds.

Accounting in the UAE: Legislative Requirements

Local UAE companies, according to the Federal Law “On Commercial Companies” of 2021, must maintain accounting records that at any time accurately reflect their operations and financial position. These records must be kept at the company’s head office for at least five years from the end of its financial year.

Free zone companies in the UAE are required to maintain and retain accounting records and supporting documents sufficient to display and explain the company’s transactions. The minimum retention periods for accounting documentation are established by the regulations of the respective free zone.

It’s important to note that regardless of whether full accounting is maintained, the requirement to prepare annual financial statements currently applies to virtually all UAE companies, including free zone entities. Therefore, all transactions should be meticulously documented throughout each financial year for which reporting will subsequently be required.

Preparation of Financial Statements

Why Are Financial Statements Necessary in the UAE?

Preparation of annual financial statements for a UAE company is required to:

  • Comply with UAE legislation and avoid penalties (currently, financial statements are mandatory in all emirates and free zones);
  • Confirm the amount of taxable profit for Corporate Income Tax purposes in the UAE;
  • Meet free zone company conditions for exemption from Corporate Income Tax (preparation of audited financial statements is one of the requirements for “Qualifying Free Zone Persons” eligible for a 0% rate);

Additionally, financial statements may be needed for:

  • Assessing the company’s financial health (during transactions, obtaining loans, upon investor request, and other situations);
  • Confirming the profit amount of a controlled UAE company in the tax residency country of the controlling person (if required by that country’s Controlled Foreign Company (CFC) legislation).

Standards for Preparing Financial Statements in the UAE

Financial statements of UAE companies must comply with:

  • International standards and practices;
  • UAE legislative requirements or free zone regulations;
  • Applicable directives of competent authorities.

The most commonly used standards are the International Financial Reporting Standards (IFRS), developed by the International Accounting Standards Board (IASB). IFRS, implemented by the UAE Central Bank, are mandatory for companies regulated by the Securities and Commodities Authority (SCA). Currently, IFRS are recommended for all UAE companies.

A company’s financial statements for its financial year (or other period) typically include:

  • Directors’ Report;
  • Auditor’s Opinion;
  • Statement of Financial Position;
  • Statement of Profit or Loss and Other Comprehensive Income;
  • Statement of Changes in Equity;
  • Statement of Cash Flows;
  • Notes to the Financial Statements.

Audit of Financial Statements in the UAE

An audit is mandatory in the UAE for local (mainland) Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs). For free zone companies, an audit is compulsory according to the regulations of the respective free zone.

Moreover, an audit is a condition for maintaining a company’s status as a “Qualifying Free Zone Person” (QFZP), which, along with other requirements, allows for exemption from Corporate Income Tax.

Audits are conducted in accordance with the International Standards on Auditing (ISA) and the legislative requirements for auditing in the UAE. To perform an audit, a company must appoint an independent auditor (audit firm).

The auditing function in the UAE is connected to local providers of audit services. The auditor must hold a local licence to perform auditing activities, and in the case of a free zone, must also be approved by the regulator of that free zone. For example, audits of financial statements for companies in the DMCC free zone (Dubai) can only be conducted by audit firms approved by the DMCC Authority.

In line with applicable regulations, a copy of the audited financial statements must be submitted to the competent authority within the specified timeframes after the end of the company’s financial year.

Tax Reporting for Companies in the UAE

The main types of tax reporting in the UAE for companies are:

  • Corporate Income Tax Return: Submitted no later than nine months after the end of the tax period. The Tax Authority may also request the financial statements used to determine taxable income, as well as other supporting documents and information.
  • VAT Returns: Submitted within 28 days after the end of each tax period, which is either three months or one month, depending on turnover. Companies must issue and receive tax invoices and retain documents related to taxable transactions as part of VAT compliance.

Why Choose Us?

  • Experience and Knowledge: Our accountants possess comprehensive knowledge of International Financial Reporting Standards and all UAE legislative requirements. We promptly monitor changes in corporate and tax regulations that may affect your company’s obligations.
  • Individual Approach: We offer solutions specifically tailored to your business, based on an understanding of industry specifics and client needs.
  • Technological Innovations: Utilising advanced technologies and software allows us to provide high-quality services and save you time.

By choosing our accounting services in Dubai, you gain a reliable partner who will help you effectively establish your accounting functions and optimise your tax profile.

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