Clear answers to common questions related to Accounting, Bookkeeping, VAT, E-Invoicing, and Auditing services in the UAE.
Yes. Under UAE Commercial Companies Law and VAT regulations, all businesses must maintain proper accounting records for at least 5 years. Accurate accounting is also mandatory for VAT compliance, audits, and corporate tax reporting.
Companies must maintain ledgers, journals, bank statements, invoices, expense records, payroll data, VAT records, and financial statements in line with IFRS standards applicable in the UAE.
Yes. Outsourcing accounting services is common in the UAE and helps businesses reduce costs, ensure compliance, and focus on core operations while staying audit-ready.
Accounting should ideally be updated monthly to ensure accurate financial reporting, timely VAT filing, and better business decision-making.
Yes. Free zone companies are required to maintain accounting records and, in many cases, submit audited financial statements annually.
The UAE follows International Financial Reporting Standards (IFRS) for financial reporting.
Yes. Professional accounting helps startups manage cash flow, comply with VAT, and prepare for audits or funding requirements.
Bookkeeping involves recording daily financial transactions such as sales, purchases, receipts, and payments in compliance with UAE regulations.
Yes. Proper bookkeeping is essential for accurate VAT returns and audit readiness.
Monthly bookkeeping is recommended to avoid backlogs and errors.
Yes. Tally Prime is widely used in the UAE for bookkeeping and VAT reporting.
Invoices, receipts, bank statements, payroll records, and expense bills.
Yes. Digital records are accepted as long as they are accessible and accurate.
Poor bookkeeping can result in VAT penalties, audit issues, and financial mismanagement.
Businesses must register for VAT if their taxable turnover exceeds AED 375,000 in the last 12 months or is expected to exceed it in the next 30 days. Voluntary registration is allowed above AED 187,500.
The standard VAT rate in the UAE is 5%. Certain supplies are zero-rated or exempt, such as exports, healthcare, education, and some financial services.
VAT returns are usually filed quarterly, but some businesses may be assigned monthly filing by the Federal Tax Authority (FTA).
Businesses must keep tax invoices, credit notes, VAT returns, import/export records, and accounting books for at least 5 years as per UAE VAT law.
Penalties include fines for late registration, late filing, incorrect returns, and non-payment. These can range from fixed penalties to percentage-based fines.
Yes. Input VAT can be reclaimed on eligible business expenses, provided valid tax invoices are available and the expense is related to taxable supplies.
Yes. Free zone companies are subject to VAT unless they operate in designated zones under specific conditions defined by UAE VAT law.
E-invoicing refers to the electronic generation, submission, and storage of invoices in a structured digital format compliant with UAE regulatory standards.
The UAE is gradually implementing e-invoicing. Businesses are advised to adopt compliant accounting software to stay ready for future mandatory phases.
An e-invoice must include supplier details, TRN, invoice number, date, taxable amount, VAT amount, total value, and customer details where applicable.
Tally Prime supports structured invoicing and VAT compliance, making it suitable for adapting to UAE e-invoicing requirements.
E-invoices must be stored securely for at least 5 years and be accessible to the FTA upon request.
No. True e-invoices are generated in structured digital formats (such as XML or JSON), not simple PDFs.
E-invoicing improves accuracy, reduces fraud, speeds up compliance, and simplifies audits.
Many mainland and free zone companies are required to conduct annual audits as per licensing authority or shareholder requirements.
An audit ensures financial statements are accurate, compliant with IFRS, and free from material misstatements.
Audits must be conducted by registered and approved audit firms recognized by UAE authorities.
Financial statements, bank confirmations, invoices, VAT records, payroll data, and contracts.
Audit duration depends on business size and record quality, typically ranging from 2 to 6 weeks.
Delayed audits can result in license renewal issues, bank account restrictions, or regulatory penalties.
Yes. VAT audits focus on tax compliance, while financial audits assess overall financial accuracy and reporting standards.