Cookie Settings
Co-Founder & CEO movingo
Editor
Author
Iakov Kukushkin
Copywriter, Journalist
Jun 30, 2025
When we work with clients, we receive many questions about accounting in the UAE every day. So, we decided to put all the common questions and myths about it in one place, so you don't need to look for them. We'll also give you some tips on how to avoid trouble and do business legally and safely.
Why is accounting important in the UAE?
Bookkeeping is more than just crunching numbers. It's a legal requirement in the UAE. Whether you operate in a Free Zone or on the Mainland, the government requires full transparency. Maintaining up-to-date bookkeeping records allows you to:
- operate your business legally
- understand your company's financial position
- maintain compliance with tax authorities
- make informed financial decisions
- avoid fines and penalties
Does every business need accounting? What about freelancers?
The law says that every company has to keep good accounting records. This means that even small businesses have to keep track of their finances to avoid getting into trouble with the law. This also applies to freelancers.
Accounting in the UAE usually includes VAT registration, financial reporting, audits, and tax returns. You can’t do your bookkeeping yourself, it requires the knowledge of accounting professional familiar with FTA regulations and IFRS standards.
Essential accounting tasks include:https://movingo.ae/tax_advice
Accounting in the UAE usually includes VAT registration, financial reporting, audits, and tax returns. You can’t do your bookkeeping yourself, it requires the knowledge of accounting professional familiar with FTA regulations and IFRS standards.
Essential accounting tasks include:https://movingo.ae/tax_advice
- Recording all income and expenses
- Keeping all invoices and receipts
- Preparing monthly reports
- Tracking VAT and Corporate Tax obligations
- Following IFRS standards
- Preparing for audits
- Even small companies with minimal transactions must maintain proper records.
We offer accounting packages designed for freelancers and small businesses. Even if you only have a few transactions with us each month, they will be in order.
What happens if you don't follow UAE accounting rules?
It's a legal requirement for everyone. If you don't play by the rules, though, you might run into a lot of problems.
- Heavy fines from the Federal Tax Authority (FTA). Here are some examples:
- Delays in bank account openings or renewals
- Problems with audits or inspections
- Reputation risks if you’re seen as non-compliant
- Personal liability for directors or owners
In short: cutting corners can cost you a lot. Follow the rules and keep your books in order.
How to do it right? Well, first off, you need to avoid some common mistakes. Here are some examples of those, and also some solutions to fix them.
Common bookkeeping and accounting mistakes and how to fix them
Now, let's take a look at the real situations that many businesses face.
-
You don’t know what exactly is being done in your accounting — or what standards are being followedWhen you delegate your bookkeeping, it's easy to assume "it's handled." But many freelancers or small firms just input numbers without telling you what they’re actually doing — or why. -
Always ask: What are you doing, how are you doing it, and according to which standards? In the UAE, bookkeeping should follow IFRS (International Financial Reporting Standards). Make sure your books are prepared in a way that supports VAT, Corporate Tax, and any future audit — not just for internal use or guessing. - Your accountant just sent you Excel spreadsheets, not proper financial reportsExcel is not a reporting system. You can’t use it for tax filings.
- Use accredited accounting softwares like ZohoBooks, QuickBooks, etc, and request reports in proper formats like P&L, Balance Sheet, VAT reports, etc.
- You don’t have a reporting calendarIf you don’t know your deadlines, you’ll miss them and get a large fines.
- Set a reporting calendar: monthly management reports, quarterly VAT, annual Corporate Tax returns, and annual audits if needed. Professional software can help automate it.
- You don't know the start of your financial yearThat’s the period your reports are based on. Without it, you won't be able to accurately calculate reporting dates and could get hit with fines.
- Check with your accountant or see if the license issue date. Your financial year often starts in January and ends in December, based on the Gregorian calendar. If there's any confusion, give us a call and we can help you out.
- You don’t have a certificate of Corporate Tax registrationWithout this, you are not compliant. In this case, fines can be up to AED 10,000.
- Check your Corporate Tax registration on the EmaraTax platform and download your certificate.
- You don’t know your turnover. You’re not sure if you need to pay VAT or Corporate TaxMany Free Zone businesses fall into this trap.
- Track your revenue monthly. If you pass the AED 375,000 threshold, you should register for VAT and file the returns quarterly. Applies both to companies and freelancers.
- You’re told that since you’re in a Free Zone, “you don’t need anything”That’s not true.
- Free Zone companies still need to register and file for VAT or Corporate Tax depending on their activities and income. So get qualified tax advice and work hassle-free.
- You’re told that in your Free Zone, no one pays taxAgain, this is often false. Many Free Zones offer tax exemptions under certain conditions, but you still have to have your records in order.
- If your annual revenue is over AED 375,000, then you need to register – even if you sell globally or your sales are zero-rated.
- You work without invoicesYou're going to be fined and face other serious issues during the next audit.
- Make sure you issue the correct tax invoices for each transaction. Save copies digitally or physically.
- You don’t keep any receiptsExpenses cannot be claimed without proof.
- Keep receipts for every business expense, even small ones. Use a professional app or service to organise them.
- You don't know which reports you've submitted or whenThis often leads to missed deadlines and fines.
- Ask your accountant for a submission schedule, and make sure you understand what each report is for.
- You’re told to register for Corporate Tax only when filing the return.That’s too late. You will face fines for sure.
- You must register during 3 months after company was incorporated.
- You don’t do any bookkeeping at all because “you only have 2-3 transactions a month”Even minimal activity needs tracking.
- You’re still legally required to keep all records for at least 5 years.
- “Our accountants registered us for VAT. We don’t know why”You might be registered incorrectly.
- Check your VAT certificate to ensure that everything is in order. If you see any mistakes, fix them right away — the penalties for incorrect VAT returns can be severe.
Here’s how to avoid all those mistakes
- Hire professionals accountants who understand UAE regulations, for example, us.
- Always keep your financial records organised and accessible.
- Know your tax obligations (VAT and Corporate Tax).
- Use professional accounting software — not just Excel.
- Ask for your accounting reports.
- Keep all receipts and invoices.
- Set reminders for all reporting deadlines.
Professional accounting can help you avoid all those problems. At movingo, we have helped over 400 companies operate legally in the UAE, saving them around AED 5 million in fines. We’re sure we can do something for you too. How about we have a quick call to see what we can do?
What to read next
We hold useful webinars several times a month. Be sure to see what's coming soon.