Who must keep books of accounts under VAT in Dubai?

Every business must keep records. A registered person must keep full VAT books and tax records.

How long must a company keep VAT records?

Five years for general records, ten years for capital assets, and fifteen years for real estate.

What documents support a VAT return?

Tax invoices, credit notes, import and export proofs, contracts, ledgers, and reconciliations.

Can a startup register before hitting the threshold?

Yes. Voluntary registration is allowed when expenses or supplies cross AED 187,500.

How do strong books reduce penalties?

Strong books show facts on time. Errors drop and fines are less likely during reviews.

Books of Accounts under VAT in Dubai

Books of accounts under VAT in Dubai is a core duty for every company. The UAE introduced VAT on 1 January 2018 at a 5% rate. The state uses the tax for public services and growth. A registered seller charges VAT to customers. The seller pays the net VAT to the government on a monthly or quarterly cycle.

A company must register when taxable supplies and imports cross AED 375,000. A company may register voluntarily when supplies or expenses cross AED 187,500. A startup may also register when expenses cross the voluntary bar. Good records support every VAT return from the first day.

Mandate on Accounting Records and Books

The VAT law tells a business to document income, costs, assets, and VAT. The files must be accurate and up to date. Even a non-registered entity must keep records. The Authority may check the base documents at any time.

Core accounting books include:

Records of payments and receipts
Purchases and sales ledgers
Revenue and expense summaries
Balance sheet and profit and loss accounts
Wages and salaries records
Fixed asset register
Inventory records, counts, and valuation notes

The Authority may also ask for other data to confirm a duty to register or to confirm a tax position.

Record-Keeping Rules and Formats

Article (78) sets clear lists for VAT compliance. A taxable person keeps:

Records of all supplies and imports of goods and services
All tax invoices and any alternate documents received
All tax credit notes and any alternate documents received
All tax invoices and credit notes that the business issues
Records of goods or services used for non-business matters, with the VAT shown
Records of purchases where input VAT isn’t deducted
Records of exports
Records of adjustments or corrections to accounts or invoices
RCM (reverse charge) declarations and related entries
A tax record that shows due tax, corrections, and recoverable tax

Acceptable storage:
A firm keeps original documents. If not, the firm keeps clear copies in paper or electronic form. The firm stores data in a way that lets the Authority check obligations within a reasonable time.

Retention Time Frames

A taxable person keeps accounting records for 5 years after the end of the tax period. A non-taxable person keeps records for 5 years from the year-end of the document.

Capital assets files stay for 10 years. Real estate records stay for 15 years after the related tax period. The Authority may extend these limits in special cases.

Practical VAT Responsibilities for Owners

A registered company must:

Issue tax invoices with all required fields
Charge VAT on taxable supplies and track the totals
Claim input VAT on eligible business costs
File VAT returns online by the due date
Pay any net VAT on time
Keep ledgers, contracts, and shipping proofs in order

If output VAT is higher, the firm pays the difference. If input VAT is higher, the firm seeks a refund.

Penalties for Poor Records or Late Actions

Non-compliance can hurt a company. Fines apply to late filings, missing invoices, poor records, and wrong prices. For example, fines can reach AED 10,000 for failure to keep required records at first instance and AED 50,000 for repetition. A fine of AED 20,000 applies when a person fails to submit tax data in Arabic when requested. Strong controls help you avoid losses and stress.

Why Outsourced Bookkeeping Helps Owners

Owners want growth with less risk. Outsourcing books can give fast wins at a fair cost.

Key benefits:

It improves efficiency and streamlines processes
It reduces overhead and training cost
It lets leaders focus on core activities
It adds secure systems and confidentiality
It offers on-call experts with extra services
It keeps records ready for audits and reviews

Outsourcing works well for SMEs that need reliable cycles with limited staff.

Importance of Accounting & Bookkeeping in Dubai

The Commercial Companies Law and the VAT Law require proper books for at least five years. Clean books help you budget and plan. Clean books also support tax returns every year. Leaders use books to analyze performance and make decisions. Investors ask for timely reports and clear trends. Proper bookkeeping tracks profit, growth, and cash flow.

Good practice checklist:

Close books monthly with bank reconciliations
Match sales and purchases with invoices and receipts
Track VAT on each line with correct tax codes
Separate zero-rated, exempt, and standard-rated items
Keep payroll, fixed assets, and inventory registers current
Review each VAT return before filing

What Can Help 🥇

Mubarak Al Ketbi (MAK) Auditing helps your team set simple VAT processes and clean books. Our experts create chart-of-accounts with VAT codes. Our team trains staff and reviews returns before filing. We guide you through retention rules and audit steps. We keep your business compliant and calm. Remember, a stitch in time saves nine, because early controls stop big trouble later.

For more information visit our office:
Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
Contact/WhatsApp: +971 50 276 2132