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.
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?
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.
Explore all options
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:
Failure to keep the necessary financial documents.;<b>AED 10,000 – 20,000</b>
Failed to submit the necessary paperwork during a tax audit.;<b>AED 20,000</b>
Failure to report changes to tax records (for each case);<b>AED 1,000 – 5,000 </b>
Not in compliance with FTA and IFRS;<b>AED 20,000</b>
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 followed
When 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 reports
Excel 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 calendar
If 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 year
That’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 registration
Without 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 Tax
Many 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 tax
Again, 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 invoices
You'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 receipts
Expenses 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 when
This 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.
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?