Bookkeeping and audit requirements for UAE companies

Every company in the UAE has to keep proper books, and more companies need an audit than most owners assume. The AED 50 million corporate tax threshold is the figure people quote, but it is only one of three rulebooks. Company law, the tax rules and, for free zone companies, the free zone's own regulations each set requirements, and you have to meet all of them.

This guide covers who needs audited accounts, how long to keep records, which accounting standards apply and what goes wrong. It is general information, not tax or legal advice. Confirm your own position with a registered auditor or tax agent.

Which companies need audited accounts?

The corporate tax rules in the table apply to tax periods starting on or after 1 January 2025. Under the earlier decision, a tax group needed an audit only when its consolidated revenue passed AED 50 million; now every tax group needs one. FTA guidance adds two details: the AED 50 million threshold is not pro-rated for a tax period longer or shorter than 12 months, and the audit must be done by an auditor registered in the UAE.

The rule most often missed sits in the Commercial Companies Law (Federal Decree-Law No. 32 of 2021). Article 27 says every limited liability company and joint stock company must have one or more auditors to audit its accounts each year. There is no revenue threshold. A two-partner mainland LLC with modest revenue is covered as much as a large one, which is why the AED 50 million figure is the wrong one for most small LLC owners to focus on.

Free zone companies are different. Article 5 of the same law says it does not apply to free zone companies on matters their free zone's own laws or regulations cover. Whether your free zone requires an annual audit therefore depends on its company regulations and your licence terms, so check them well before licence renewal, not at the counter. And if you rely on the 0% rate as a Qualifying Free Zone Person, tax law requires the audit anyway; our guide to free zone qualifying income explains the other conditions.

How long do you have to keep records?

Longer than most people expect. The practical answer is to take the longest period that applies to you, which for any company subject to corporate tax is seven years.

• Corporate tax: seven years after the end of the tax period the records relate to, under Article 56 of Federal Decree-Law No. 47 of 2022. Exempt persons keep records of their exempt status for the same period.
• VAT and other taxes under the Tax Procedures Law: five years after the end of the tax period as the baseline (Cabinet Decision No. 74 of 2023), extended where there is an audit or a dispute with the FTA, and longer for real estate records.
• Company law: at least five years at the company's head office from the end of the financial year, under Article 26 of the Commercial Companies Law.
• E-invoices: once your business is on the national system, e-invoices and their data must be stored in the UAE for the Tax Procedures Law period. Our e-invoicing guide has the rollout dates.

Say your company's financial year ends on 31 December 2026. Keep that year's invoices, contracts and bank statements until at least 31 December 2033. If the FTA opens an audit before then, keep them for longer.

Language matters too. The Tax Procedures Law requires tax records to be submitted in Arabic when the FTA asks. The FTA may accept another language, but it can request an Arabic translation, so keeping records in English works only if you can produce that translation when asked.

Which accounting standards apply?

For corporate tax, Ministerial Decision No. 114 of 2023 accepts only two standards. IFRS is the default. IFRS for SMEs may be used in any tax period where revenue does not exceed AED 50 million.

A business with revenue of AED 3 million or less may instead prepare its accounts on the cash basis, recording income and costs when money actually moves. Above AED 3 million, accrual accounting is required unless the FTA approves an exception.

The cash basis is simpler, but it produces no balance sheet. Company law separately requires a company's accounts to follow international accounting standards, which are accrual based, and a bank reviewing your company will usually want a balance sheet too. For most small LLCs, IFRS for SMEs from the first year is the more practical choice.

What records should you actually keep?

The FTA's test is simple: your records must support every figure in your tax returns and let the FTA work out your taxable income without guesswork. In practice, that means keeping:

• sales and purchase invoices, credit notes and receipts
• contracts, especially any with related parties
• bank statements and monthly reconciliations
• payroll records and employment contracts
• a fixed asset register and depreciation workings
• stock records, if you hold inventory
• loan agreements, including loans between you and your company
• board and shareholder resolutions, and the workings behind each VAT and corporate tax return

Related-party transactions need the most care. The FTA can require a disclosure of them with your corporate tax return, and it can ask you to show within 30 days that they were priced at arm's length. A full master file and local file are required only if your revenue is AED 200 million or more, or you belong to a multinational group with consolidated revenue of at least AED 3.15 billion (Ministerial Decision No. 97 of 2023).

For VAT-registered businesses, the same records support your VAT returns; our guide to VAT registration covers tax periods and filing.

What happens if you get it wrong?

Under the corporate tax penalty table (Cabinet Decision No. 75 of 2023, as amended), failing to keep the required records costs AED 10,000 per violation, rising to AED 20,000 for a repeat within 24 months. Failing to submit tax records in Arabic when the FTA asks costs AED 5,000. Those are the amounts as of October 2026.

The indirect costs are usually larger. A Qualifying Free Zone Person without audited accounts puts its 0% rate at risk. A company that cannot produce clean statements struggles with bank reviews and with due diligence when it sells or raises money. And accounts rebuilt in a hurry, months after year end, are where tax errors come from.

While you are putting the books in order, check your beneficial ownership records as well. They are a separate obligation, covered in our UBO guide, and they drift out of date easily when shareholdings change.

A year-end routine that works

1. Reconcile your bank accounts every month, not once a year.
2. Choose your accounting standard at the start of the year and apply it consistently.
3. Appoint your auditor before the year closes, especially if you are an LLC or a Qualifying Free Zone Person.
4. Close the books and prepare the financial statements, then have them audited where required.
5. Prepare the corporate tax return from the final figures. Our corporate tax guide covers registration and filing.
6. Archive everything for seven years, including e-invoice data and the workings behind each return.

If you want a second opinion on what your own company needs, book a free consultation.

Sources

• Federal Decree-Law No. 47 of 2022 on corporate tax, consolidated text (PDF)
• Ministerial Decision No. 84 of 2025 on audited financial statements (PDF)
• Federal Tax Authority: Accounting Standards corporate tax guide (PDF)
• Cabinet Decision No. 74 of 2023, Executive Regulation of the Tax Procedures Law (PDF)
• Cabinet Decision No. 75 of 2023 on corporate tax penalties, as amended (PDF)
• Ministry of Economy and Tourism: company legislation, including the Commercial Companies Law (Arabic)