Bookkeeping now mandatory for everyone in UAE
According to the Federal Decree-Law No. 7 of 2017, all UAE companies must maintain accounting record and commercial books for at least the past 5 years. Failure to comply can bring penalties starting from AED 5,000.
Accounting books should be maintained by qualified accountants in accordance with local laws & regulations as well as International Financial Reporting Standards (IFRS). Accounting and bookkeeping services can also be outsourced to UAE accounting firms like Zyla Accountants.
With the coming Corporate Tax changes, the necessity to have your accounts professionally maintained according to the international standards is even more important.
Zyla Accountants offer our clients flexible bookkeeping solutions to suit every business need and hiring the services of accounting & bookkeeping firms allow you to focus more on your company operations and business objectives. Maintaining proper books of accounts as per UAE regulations would ensure accurate receipts and payments of cash and other transactions. Additionally, it assists in addressing cash flow requirements, preventing insolvency & bankruptcy, supporting planning and forecasting budgets that contribute to effective financial management.
According to UAE Federal Law, how should companies maintain their books of accounts?
Accounting records in the UAE must be maintained to accurately show the company's financial position at any time. In order to confirm compliance with the law, the records should enable the partners or shareholders to verify that the company's accounts are properly maintained. Listed below are the requirements for maintaining books of accounts in the UAE according to Federal Law No 2 of 2015.
Article 26 on Accounting Records
Companies should maintain their books of accounts at their head office for at least 5 years from the end of the financial year of the company.
The companies can keep an electronic copy of the documents and records kept in accordance with the regulations issued by a Ministerial Decision.
While preparing the periodical and annual accounts, companies need to ensure that they comply with the International Accounting Standards and Practices to give a clear and accurate view of the profits and losses of the company.
Responsibility for Preparing the Accounts
According to Article 87 of the Federal Law, No 2 of 2015 on Commercial Companies, the manager of a company is required to prepare the annual budget and the profit and loss account. The manager is also required to compile an annual report on the financial position of the company and provide recommendations on the distributions of the profits of the General Assembly, within 3 months from the end of the financial year.
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