Good bookkeeping is no longer optional for UAE businesses. With VAT and Corporate Tax in place, the law requires businesses to keep proper accounting records, retain them for set periods, and produce them when the Federal Tax Authority (FTA) asks. Missing or incomplete records can lead to penalties of AED 10,000 or more.

This guide explains what records to keep, how long to keep them, when audited financial statements are required, and how bookkeeping differs from accounting.

What Records Does the Law Require?

Under the Tax Procedures law, any person doing business or with tax obligations must keep accounting records and commercial books. The Executive Regulation lists what these include:

  • Records of payments and receipts, purchases and sales, revenue and expenses.
  • Balance sheet and profit and loss accounts.
  • Records of wages and salaries.
  • Fixed asset records.
  • Inventory records, including quantities and values at the end of each tax period and stock-count records.
  • Supporting documents, such as invoices, contracts, licences and correspondence.
  • Records of tax calculations, elections and the method used.

The FTA can also ask for any other information it needs to check your tax obligations.

How Long Must You Keep Records?

  • Generally: 5 years after the end of the tax period the records relate to, for a taxable person.
  • Real estate records: 7 years from the end of the calendar year in which the document was created.
  • Corporate Tax records: the Corporate Tax law requires records to be kept for 7 years after the end of the tax period.

Longer periods can apply. If you are in a dispute with the FTA, under a tax audit, or notified of a planned audit before the period ends, you must keep the records for an additional 4 years (or until a dispute is settled, if later).

In practice, many businesses keep all records for at least 7 years to cover both VAT and Corporate Tax.

When Are Audited Financial Statements Required?

Under Ministerial Decision No. 84 of 2025, for tax periods starting on or after 1 January 2025, these businesses must prepare and keep audited financial statements:

  • Taxable persons (other than tax groups) with revenue of more than AED 50 million in the tax period.
  • Qualifying Free Zone Persons, whatever their revenue.

Tax groups must prepare audited special purpose financial statements. See our guide to free zone Corporate Tax.

Penalties for Poor Record Keeping

  • Failing to keep the required records: AED 10,000 per violation, or AED 20,000 if repeated within 24 months (Corporate Tax penalty rules).
  • Failing to provide records in Arabic when the FTA asks: reduced to AED 5,000 from 14 April 2026.

See the full list in our Corporate Tax penalties guide.

Bookkeeping vs Accounting: What Is the Difference?

  • Bookkeeping is the day-to-day recording of transactions: sales, purchases, payments, receipts and bank reconciliations.
  • Accounting uses those records to prepare financial statements, analyse performance, calculate tax and support decisions.

Both matter. Accurate bookkeeping is the base for correct VAT returns, Corporate Tax returns and audited accounts.

How to Choose a Bookkeeping Service in the UAE

  • UAE tax knowledge: they should understand VAT, Corporate Tax and record-keeping rules.
  • Software: check they use reliable accounting software that can produce VAT reports, and will be ready for e-invoicing.
  • Regular reconciliations: monthly bank and VAT reconciliations catch errors early.
  • Clear scope and fees: agree in writing what is covered, such as bookkeeping, VAT returns or year-end accounts.
  • Record retention: make sure your records are stored securely and remain available to you for the full retention period.

With e-invoicing starting from 2027, clean bookkeeping and accurate customer data will matter even more. See our e-invoicing guide.

Frequently Asked Questions

How long do I need to keep business records in the UAE?

Generally 5 years after the tax period, and 7 years for Corporate Tax records and real estate records. Longer periods apply during audits or disputes.

Do all UAE companies need audited financial statements?

No. For Corporate Tax, they are required for taxable persons with revenue over AED 50 million and for Qualifying Free Zone Persons. Other laws or free zone rules may also require audits.

What is the penalty for not keeping proper records?

Under the Corporate Tax penalty rules, AED 10,000 per violation, or AED 20,000 if repeated within 24 months.

What is the difference between bookkeeping and accounting?

Bookkeeping records daily transactions. Accounting uses those records to prepare financial statements and tax returns.

Note: This article provides general information only and is not tax advice. Confirm the current requirements with the Federal Tax Authority or a qualified tax professional.