Introduction
Introduction
Accounting in Dubai is a critical aspect of running a successful business in the UAE. Dubai is one of the most attractive destinations for international entrepreneurs thanks to its business-friendly environment, favorable taxation, and growing reputation as a global financial hub.
However, properly managing the accounting of a company registered in Dubai is essential to remain compliant with local regulations, avoid penalties, and attract investors.
📌 Table of Contents
- Is Accounting Mandatory in Dubai?
- Differences Between Free Zone and Mainland
- VAT and Tax Obligations
- Corporate Tax (from 2023)
- Why Outsource Accounting and Bookkeeping
- Conclusion
🔄 Refer back to this guide anytime you have a question about taxation or accounting in Dubai—it’s a regularly updated resource!
1. Is Accounting Mandatory in Dubai?
Accounting in Dubai is a legal requirement for all business entities operating in the UAE. Since 2019, all companies incorporated, whether in Free Zones or in the Mainland, are required to maintain clear and verifiable accounting records. This includes:
- Systematic recording of all transactions
- Issuing and storing invoices
- Annual financial statements
- Journal and ledger maintenance
- Document retention for at least 5 years
2. Differences Between Free Zone and Mainland
Whether you’re based in a Free Zone or the Mainland, understanding accounting in Dubai is key to maintaining compliance and avoiding issues with regulators.
Companies registered in Free Zones and those in the Mainland must meet similar requirements, but there are some operational differences:
Free Zone:
- Free Zone authorities often require submission of audited annual financials signed by a certified accountant
- Some Free Zones (e.g., DMCC, IFZA) have stricter requirements than others
- Not all Free Zones require mandatory annual audits, but they are highly recommended
Mainland:
- Regulated by the Department of Economic Development (DED)
- Preparation of financial statements according to IFRS (International Financial Reporting Standards) is mandatory
- For LLCs (Limited Liability Companies), annual audits are often required
3. VAT and Tax Obligations
Since 2018, VAT (Value Added Tax) has been introduced in the UAE:
- Registration is mandatory for companies with revenues exceeding AED 375,000/year
- Standard rate is 5%
- Registration, quarterly filing, and payment are handled via the FTA (Federal Tax Authority) portal
- Voluntary registration is possible for those below the threshold
Important: In 95% of cases, Free Zone companies are also subject to the VAT regime, even if their clients are located outside the UAE.
Being subject to VAT does not necessarily mean applying the 5% rate on invoices, but it does mean being legally required to submit quarterly VAT filings through the FTA portal.
4. Corporate Tax (from 2023)
As of June 1, 2023, Corporate Tax is in effect in the UAE:
- 9% tax rate on profits above AED 375,000
- Exemptions apply to certain strategic activities or qualifying entities
- Transparent accounting is essential to demonstrate income and expenses
- Annual filing is mandatory and audits may be required
Note: Even Free Zone companies are generally subject to Corporate Tax. Only in rare cases—such as when operating within qualified activities in qualified Free Zones—can exemptions apply.
5. Why Outsource Accounting and Bookkeeping
Accounting in Dubai can quickly become complex due to evolving regulations and zone-specific obligations.
Many companies in Dubai choose to outsource their accounting for the following reasons:
- Avoid tax errors
- Ensure compliance with local financial regulations
- Prepare properly for audits or inspections
- Save costs compared to maintaining an in-house team
At MP Elites Consulting, we provide comprehensive accounting and bookkeeping services for both Free Zone and Mainland companies, including VAT and Corporate Tax management.
6. Conclusion
Staying compliant with accounting regulations in Dubai is essential today. While the complexity of obligations varies depending on your business location and type, maintaining clear, organized, and verifiable accounting is vital for all companies. Working with expert consultants allows you to operate confidently and legally. If you need help to choose the right accounting service in Dubai, read this article.
📣 If you’re a company in Dubai and you’re unsure about accounting, vat or corporate tax regulations, contact us: we’ll help you understand what to do to stay —no risks, no mistakes.
📲 Message us on WhatsApp at +971 56 979 4430
📧 Or send us an email at: info@mpelitesconsulting.com
MP Elites Consulting LLC – accounting services in dubai
