How long should UAE businesses keep their books of accounts?

Companies must keep records for at least 5 years, and in some cases longer for tax audits.

What penalties apply if a business fails to maintain accounts?

Initial fines start at AED 10,000 and can reach AED 50,000 or more for repeated violations.

Can small businesses outsource accounting in UAE?

Yes, outsourcing to firms like Mubarak Al Ketbi (MAK) Auditing helps reduce cost and ensures compliance.

Why are audited reports required for licence renewals?

Authorities use audited accounts to verify financial health and compliance before granting renewals.

What is the benefit of using IFRS standards?

IFRS improves global credibility, accuracy, and helps attract foreign investors.

Books of Accounts in UAE: How Businesses Should Maintain Records

Introduction to Books of Accounts in UAE

Books of accounts in UAE are not only legal requirements but also vital for business growth. Businesses must keep accurate financial records for a minimum of 5 years in compliance with Federal Law No. 2 of 2015 and the UAE VAT Law. The records include invoices, ledgers, purchase books, credit and debit notes, VAT ledger, and annual accounts.

Maintaining books ensures receipt and payment accuracy, supports business audits, and prevents financial instability. Companies that don’t follow the rules face heavy penalties. That’s why many firms rely on expert accountants or outsource services to trusted names like Mubarak Al Ketbi (MAK) Auditing.

Why Businesses Must Maintain Accounts

Businesses in UAE must keep their accounts updated for many reasons. Let’s explore the most important ones:

1. Licence Renewal

In mainland and free zones, regulators require audited reports during licence renewals.
Failure to maintain accounts may delay renewals or add high costs.
Companies are often asked for reports since incorporation, which takes time if not managed.

2. VAT Audits

Since 1 January 2018, UAE introduced VAT.

Firms crossing AED 375,000 turnover must register for VAT.
All transactions must comply with FTA rules, or penalties apply.
Businesses must keep books for 5 years.
Non-compliance costs AED 10,000 for first offense and AED 50,000 for repeat.

3. Economic Substance Regulations

From 2019, UAE adopted ESR under BEPS Action 5.

Companies must declare relevant activities.
Reports must be submitted within 12 months of fiscal year end.
Maintaining records ensures accuracy and smooth submissions.

4. Country-by-Country Reporting

If turnover exceeds AED 3.15 billion, firms must file CbCR.
Incorrect or late filing costs between AED 50,000 to AED 1 million.
Proper accounts make compliance easy.

5. Liquidation Procedures

Companies may liquidate due to losses or restructuring.
Auditors require all past reports for liquidation.
Proper accounting makes finalization faster and smoother.

Benefits of Accurate Bookkeeping

Maintaining books of accounts offers strong benefits:

Clear financial transparency
Accurate tax filing and VAT compliance
Better financial planning
Strong investor confidence
Protection against insolvency

Choosing Mubarak Al Ketbi (MAK) Auditing

When businesses look for reliable accounting services, Mubarak Al Ketbi (MAK) Auditing stands out. The firm provides:

Accounting and bookkeeping services
VAT compliance and consultancy
CFO services and business advisory
External and internal auditing

With expert accountants, they ensure compliance with IFRS and UAE rules, so businesses can focus on growth.

🥇 What Can Help – Mubarak Al Ketbi (MAK) Auditing

Mubarak Al Ketbi (MAK) Auditing can help you maintain accounts in full compliance with UAE rules. Their experts provide end-to-end financial solutions. Remember, when it comes to accounts, an ounce of prevention is worth a pound of cure.