Accounting Services UAE — Outsourced Bookkeeping IFRS Financial Statements Abdelhamid & Co CPA

Accounting Services UAE — Outsourced Bookkeeping, Financial Statements & Payroll

Quick answer: UAE companies are legally required to maintain accurate accounting records and prepare financial statements under Federal Decree-Law No. 32 of 2021 on Commercial Companies and Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Records must be retained for 7 years for Corporate Tax purposes (Art. 55, FDL 47/2022) and for 5 years for VAT purposes (Art. 78, FDL 8/2017 — extended to 15 years for real estate transactions). Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) for listed entities, and IFRS is widely applied across all UAE business sectors as the accepted standard. Abdelhamid & Co — Ministry of Economy Licensed Auditor LC0106-01 | Registry No. 956 | FTA Tax Agent TAN: 30003958 — provides fully outsourced accounting, bookkeeping, financial statement preparation, payroll, and management reporting services for UAE businesses of all sizes.

Abdelhamid & Co Certified Public Accountants & Auditors LLC is fully authorised to practice as a licensed auditor and Tax Agent in the UAE: Ministry of Economy Licence LC0106-01 | Licensed Auditor Registry No. 956 | FTA Tax Agent TAN: 30003958 | Tax Agency TAAN: 20033908 | Emirates Accountants and Auditors Association (EAAA) Fellow No. 124 | International Arab Society of Certified Accountants (IASCA) Fellow No. 1361 | over 25 years of professional experience in UAE accounting, audit, and tax. Our accounting team serves SMEs, free zone entities, holding companies, professional services firms, trading companies, and real estate developers — providing the accurate financial records that drive sound management decisions and satisfy all regulatory obligations. Learn more about our broader professional services or about the firm.

Overview — Accounting Obligations for UAE Businesses

The UAE's rapid economic development has been matched by an increasingly sophisticated regulatory framework governing financial record-keeping. The introduction of Corporate Tax at 9% on taxable income exceeding AED 375,000 under Federal Decree-Law No. 47 of 2022, effective for financial years beginning on or after 1 June 2023, has fundamentally changed the accounting obligations of UAE businesses: taxable persons must now prepare financial statements that form the basis of the Corporate Tax return, maintain records in sufficient detail to support every line of the return, and retain those records for 7 years.

Simultaneously, VAT-registered businesses continue to require VAT-compliant bookkeeping — with every transaction coded to the correct VAT treatment, input tax reconciled to purchase invoices, and output tax reconciled to sales invoices — to support accurate quarterly or monthly VAT return filing and withstand FTA audit scrutiny. Payroll must be processed through the Ministry of Human Resources and Emiratisation (MOHRE) Wages Protection System (WPS), with accurate records of salary, allowances, end-of-service gratuity accruals, and UAE National pension contributions to the General Pension and Social Security Authority (GPSSA).

For many UAE SMEs, owner-managed businesses, and free zone entities, outsourcing accounting to a licensed professional firm is more cost-effective than maintaining a full-time in-house finance function — and significantly reduces the risk of errors, omissions, and regulatory non-compliance that arise when accounting is handled by non-specialist staff.

Legal & Regulatory Framework — UAE Accounting Requirements

  • Federal Decree-Law No. 32 of 2021 on Commercial Companies — Art. 26: all companies registered in the UAE must maintain proper accounting books and records in Arabic or in a language acceptable to the relevant authority; Art. 237: public joint-stock companies must prepare annual audited financial statements within 3 months of financial year-end; Arts. 78–80: LLC obligations to maintain accounts and present annual financial statements to shareholders.
  • Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law) — Art. 20: taxable income is determined on the basis of the accounting net profit as per the financial statements prepared in accordance with IFRS or IFRS for SMEs; Art. 54: taxable persons must prepare and maintain financial statements; Art. 55: accounting records must be retained for 7 years from the end of the relevant tax period; Art. 56: the Minister may prescribe the accounting standards to be used.
  • Cabinet Decision No. 75 of 2023 on the Administrative Provisions for the Implementation of Federal Decree-Law No. 47 of 2022 — specifies the financial statements to be prepared as the basis for Corporate Tax return filing; sets out the conditions for using IFRS for SMEs as an alternative to full IFRS; and confirms that free zone entities claiming the 0% Qualifying Free Zone Person rate must prepare audited financial statements.
  • Ministerial Decision No. 82 of 2023 on the Determination of Categories of Taxable Persons Required to Prepare and Maintain Audited Financial Statements — specifies which categories of taxable person must have their financial statements audited (rather than merely prepared) for Corporate Tax purposes: entities with revenue exceeding AED 50 million and Qualifying Free Zone Persons.
  • Federal Decree-Law No. 28 of 2022 on Tax Procedures — Art. 72: the general 5-year statute of limitations for FTA audit and assessment; Arts. 78–80 of the VAT Executive Regulations specify the VAT record-keeping obligations; Arts. 10 & 14 govern Tax Agent authorisation for filing on behalf of taxable persons.
  • Federal Decree-Law No. 8 of 2017 on Value Added Tax, Art. 78 — requires VAT registrants to retain all records (tax invoices, credit notes, accounting records, import/export documentation) for 5 years from the end of the tax period to which they relate; 15 years for records relating to real estate transactions.
  • Cabinet Decision No. 52 of 2017 on the Executive Regulations of Federal Decree-Law No. 8 of 2017 — Arts. 59–60: specifies the mandatory contents of a tax invoice (TRN, sequential number, date, supply description, taxable value, VAT amount); Art. 78: minimum bookkeeping requirements for VAT-registered businesses.
  • International Financial Reporting Standards (IFRS) — mandatory for companies listed on UAE stock exchanges (DFM, ADX) under Securities and Commodities Authority requirements; widely adopted as the applicable accounting framework by UAE free zone authorities, banks, and regulators; required for Corporate Tax purposes under FDL 47/2022 Art. 20 unless IFRS for SMEs is applied.
  • UAE Wages Protection System (WPS) — mandatory payroll salary transfer through MOHRE-approved financial institutions for all private sector employers; records of WPS transfers, salary breakdown, and deductions must be maintained; non-compliance results in MOHRE sanctions including inability to process new employment visas.
  • General Pension and Social Security Authority (GPSSA) Regulations — monthly pension contribution obligations for UAE national employees: employer contribution 12.5% of basic salary (15% for federal government entities); employee contribution 5%; accurate payroll records required for monthly reporting.

Key Facts — UAE Accounting & Record-Keeping

  • Corporate Tax rate: 9% on taxable income exceeding AED 375,000 | 0% on income up to AED 375,000 | 0% for Qualifying Free Zone Persons on qualifying income (Federal Decree-Law No. 47 of 2022)
  • Small Business Relief: Taxable persons with revenue ≤ AED 3 million may elect for taxable income to be treated as zero (Cabinet Decision No. 73 of 2023) — accounting records still required
  • Financial statement standard: IFRS (full) for listed entities and revenue >AED 50M; IFRS for SMEs permissible for smaller entities (Cabinet Decision No. 75 of 2023)
  • Audit requirement: Mandatory for revenue >AED 50M and for Qualifying Free Zone Persons (Ministerial Decision No. 82 of 2023)
  • Corporate Tax record retention: 7 years from end of relevant tax period (Art. 55, Federal Decree-Law No. 47 of 2022)
  • VAT record retention: 5 years general; 15 years for real estate records (Art. 78, Federal Decree-Law No. 8 of 2017)
  • WPS compliance: Mandatory for all UAE private sector employers — payroll must be processed through MOHRE-approved channels
  • GPSSA pension: 12.5% employer + 5% employee on UAE national basic salary — monthly payroll accounting obligation
  • Transfer pricing: Related-party transactions must be conducted at arm's length; contemporaneous documentation required for transactions exceeding AED 40 million (Federal Decree-Law No. 47 of 2022, Arts. 34–36; Ministerial Decision No. 97 of 2023)
  • Free zone accounting: Free zone entities must have audited financial statements to qualify for 0% Qualifying Free Zone Person rate (Cabinet Decision No. 75 of 2023)
  • Firm credentials: Ministry of Economy LC0106-01 | Licensed Auditor No. 956 | FTA TAN: 30003958 | EAAA Fellow No. 124 | IASCA Fellow No. 1361 | 25+ years experience

Our Accounting Services

1. Bookkeeping & Accounts Maintenance

We record every business transaction — sales, purchases, bank receipts and payments, journal entries, provisions, and accruals — in a properly structured general ledger with a chart of accounts designed for your business sector, VAT treatment, and Corporate Tax requirements. We maintain subsidiary ledgers for accounts receivable, accounts payable, fixed assets, inventory, and payroll, reconciled monthly to the general ledger control accounts. All transactions are coded to the correct VAT treatment per Federal Decree-Law No. 8 of 2017 and Cabinet Decision No. 52 of 2017, and to the correct Corporate Tax category per Federal Decree-Law No. 47 of 2022, creating a clean audit trail for both FTA VAT audits and Corporate Tax assessments.

2. Financial Statement Preparation (IFRS)

We prepare annual and interim financial statements in accordance with International Financial Reporting Standards (IFRS) or IFRS for SMEs as appropriate under Cabinet Decision No. 75 of 2023 — comprising a statement of financial position (balance sheet), statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows, and notes to the financial statements. Our financial statements satisfy the requirements of Federal Decree-Law No. 32 of 2021 on Commercial Companies, form the basis of the Corporate Tax return under Federal Decree-Law No. 47 of 2022 Art. 20, and meet the reporting requirements of free zone authorities, banks, and regulators.

3. Management Accounts & Financial Reporting

Beyond statutory financial statements, management needs timely, accurate financial information to make business decisions. We prepare monthly or quarterly management accounts — profit and loss by department or cost centre, working capital analysis, cash flow forecasts, budget-vs-actual variance reports, and key performance indicator dashboards — tailored to the specific reporting needs of your business. Management accounts are prepared within 10 working days of month-end, giving owners and directors the financial visibility needed to manage operations, control costs, and plan for growth.

4. Payroll Accounting & WPS Compliance

We process the complete monthly payroll cycle for UAE businesses: computing gross salaries, housing and transport allowances, overtime, deductions, end-of-service gratuity accruals under UAE Labour Law (Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations), and GPSSA pension contributions for UAE national employees. We generate WPS salary transfer files for submission through MOHRE-approved banking channels, issue payslips, maintain individual employee records, and prepare the payroll accounting entries for the general ledger. Annual leave accruals, visa-related costs, and repatriation provisions are computed and recorded in accordance with IFRS IAS 19.

5. Corporate Tax Accounting & Provision Computation

The introduction of Corporate Tax under Federal Decree-Law No. 47 of 2022 has added a significant dimension to UAE accounting — businesses must now compute the current tax provision, identify temporary differences between accounting and tax bases, recognise deferred tax assets and liabilities under IFRS IAS 12, and maintain the detailed records required by Art. 55. We prepare the Corporate Tax accounting entries and disclosures, compute the taxable income bridge from accounting profit, identify non-deductible expenses (entertainment, fines, provisions not meeting the Art. 28 conditions), apply the correct transfer pricing adjustments for related-party transactions under Arts. 34–36, and ensure the financial statements contain all Corporate Tax disclosures required by IFRS IAS 12.

6. VAT Accounting & Reconciliation

Accurate VAT accounting is the foundation of a defensible FTA VAT return. We maintain a dedicated VAT control account reconciled monthly to the VAT return position, code every transaction in the purchase and sales ledger to the correct VAT treatment under Federal Decree-Law No. 8 of 2017 (5% standard, 0% zero-rated, exempt, or out-of-scope), apply the reverse-charge mechanism to imported services under Art. 48, apportionment input tax for partially exempt businesses under Cabinet Decision No. 52 of 2017 Arts. 40–48, and produce the VAT reconciliation report that bridges the VAT return position to the accounting records — the primary document requested by the FTA in a VAT audit.

7. Chart of Accounts Design & Accounting System Setup

A correctly structured chart of accounts is the foundation of all accounting and tax compliance. For new UAE businesses, we design a chart of accounts that reflects the business's revenue streams, cost structure, asset base, and the coding requirements of Corporate Tax (Art. 20, FDL 47/2022), VAT (FDL 8/2017), and IFRS — mapped to the relevant accounting software (QuickBooks, Xero, Zoho Books, Tally, SAP, Oracle). For established businesses migrating to a new system or onboarding a new accounting provider, we perform a full account mapping exercise, migrate historical balances, and set up all tax codes, supplier masters, and customer masters before the go-live date.

Our Accounting Methodology

  1. Business Understanding & Compliance Mapping: We review your legal structure (mainland LLC, free zone, branch, holding company), activity, revenue streams, and existing accounting setup. We confirm the applicable accounting standard (full IFRS or IFRS for SMEs per Cabinet Decision No. 75 of 2023), VAT registration status, Corporate Tax position (taxable person, Small Business Relief eligibility, free zone status), and payroll obligations (WPS, GPSSA). We map every compliance requirement to the accounting deliverables.
  2. Chart of Accounts Design & System Configuration: We design or review the chart of accounts — ensuring it captures VAT codes, Corporate Tax categories, and IFRS presentation requirements — and configure the accounting software. We set up bank feed connections, supplier and customer master data, payroll codes, asset registers, and reporting templates before recording the first transaction.
  3. Transaction Recording & Bank Reconciliation: We record all transactions daily or weekly, reconcile bank accounts monthly within 5 working days of month-end, match supplier invoices to purchase orders and goods receipt notes, match customer receipts to sales invoices, and flag all outstanding items for management review. Every transaction is reviewed for VAT compliance and Corporate Tax deductibility before posting.
  4. Period-End Close & Financial Statement Preparation: At each month-end, quarter-end, and year-end, we perform the full close process: post accruals, prepayments, depreciation, provisions, foreign currency revaluations (IFRS IAS 21), and payroll entries; reconcile all balance sheet accounts; prepare the trial balance; and produce the financial statements in IFRS format with full notes — ready for management review, audit, bank submission, or Corporate Tax return filing.
  5. Compliance Verification & Management Reporting: We cross-check the financial statements against the VAT return position, Corporate Tax computation, WPS records, and GPSSA contributions — identifying any discrepancies before regulatory submissions. We issue the management accounts package, KPI report, and a compliance calendar for the next period highlighting all filing deadlines (VAT return, Corporate Tax return, GPSSA, WPS, free zone annual compliance).

When Do UAE Businesses Need Outsourced Accounting Services?

1. New Business Setup & First-Year Accounting

A newly incorporated UAE company — mainland LLC, free zone entity, or branch — must establish its accounting system, chart of accounts, and record-keeping practices from the first transaction. First-year accounting errors are the most costly: incorrect opening balance sheet entries, wrong depreciation policies, missed VAT registration timing, and absence of Corporate Tax-compliant records from day one create problems that compound across multiple years. Engaging a licensed accounting firm at incorporation eliminates these first-year risks and builds the clean financial baseline that regulators, banks, and investors expect.

2. Corporate Tax Registration & Compliance Readiness

Since the introduction of Corporate Tax under Federal Decree-Law No. 47 of 2022 — effective for financial years beginning on or after 1 June 2023 — UAE businesses that previously operated without formal accounting systems have been brought into a regulated tax environment. Companies that do not maintain IFRS-compliant financial statements cannot accurately compute their taxable income, cannot claim deductions for expenses not properly recorded, and face penalties for failure to file a complete Corporate Tax return under Art. 55. We convert existing records to IFRS-compliant format and establish the systems needed for ongoing Corporate Tax compliance.

3. Statutory Audit Preparation

Businesses required to have their financial statements audited — including those with revenue exceeding AED 50 million and Qualifying Free Zone Persons under Ministerial Decision No. 82 of 2023 — need accounting records that are complete, reconciled, and supported by documentary evidence before the auditor commences fieldwork. Disorganised or incomplete records lead to extended audit timelines and higher audit fees. We prepare the audit-ready accounting pack — trial balance, lead schedules, account reconciliations, fixed asset register, payroll summary, and bank reconciliations — before the auditor begins.

4. Free Zone Entity Accounting & QFZP Qualification

Free zone entities seeking to qualify for the 0% Corporate Tax rate as a Qualifying Free Zone Person (QFZP) under Federal Decree-Law No. 47 of 2022 must maintain audited financial statements and demonstrate that their qualifying income derives from qualifying activities with adequate substance. Accurate accounting is the evidentiary foundation of the QFZP claim — income must be correctly classified between qualifying and non-qualifying, related-party transactions must be at arm's length under Arts. 34–36, and the financial statements must be audit-ready. We manage the complete accounting and audit process for free zone entities seeking QFZP status.

5. Businesses Growing Beyond Owner-Managed Accounting

Owner-managed UAE businesses frequently reach a growth inflection point where the owner can no longer manage the accounting personally, and the business is not yet large enough to justify a full-time Finance Director or CFO. At this stage — typically when revenue exceeds AED 3–5 million or employee headcount exceeds 20 — outsourced accounting to a licensed firm provides the professional financial management of an in-house finance team at a fraction of the cost, with the added benefit of access to tax, VAT, and audit expertise from the same provider.

Common UAE Accounting Errors & Their Consequences

1. Mixing Personal and Business Expenses

Recording the owner's personal expenses — vehicle running costs, personal travel, home utility bills, children's education — as business expenses is the most pervasive accounting error in owner-managed UAE companies. Under Federal Decree-Law No. 47 of 2022 Art. 28, only expenses incurred wholly and exclusively for the purposes of the business are deductible for Corporate Tax. Personal expenses incorrectly charged to the business overstate costs, understate taxable income, and — when detected on Corporate Tax audit — attract a tax assessment plus penalties. For VAT-registered businesses, input tax claimed on personal expenses creates a separate VAT liability.

2. Incorrect VAT Coding in the Accounting System

Where VAT tax codes in the accounting software do not correctly map each transaction to the applicable VAT treatment under Federal Decree-Law No. 8 of 2017 — for example, coding a standard-rated UAE supply as zero-rated, or claiming input tax on a blocked category — every incorrectly coded transaction flows directly into the VAT return as an error. Systematic VAT coding errors across hundreds of transactions create material VAT understatements or over-recoveries requiring voluntary disclosure and carrying the 30% surcharge under Cabinet Decision No. 129 of 2025. A correctly configured chart of accounts with properly mapped VAT codes is the single most effective control against VAT return errors.

3. Failure to Accrue End-of-Service Gratuity

Under Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, every employee who completes more than one year of service is entitled to end-of-service gratuity calculated on basic salary. Many UAE businesses fail to accrue this liability monthly — recording the expense only when it is paid. This understates liabilities, overstates profits, and — where the accrued gratuity liability is material — results in misstated financial statements that do not comply with IFRS IAS 19. For Corporate Tax purposes, the accrued gratuity is deductible only in the period the liability accrues, not when paid, under Federal Decree-Law No. 47 of 2022 Art. 28.

4. Not Maintaining Records for the Legally Required Retention Period

Deleting accounting records, not backing up digital files, or disposing of physical invoices before the end of the retention period violates Art. 55 of Federal Decree-Law No. 47 of 2022 (7 years) and Art. 78 of Federal Decree-Law No. 8 of 2017 (5 years; 15 years for real estate). The FTA may audit any return within the 5-year limitation period under Art. 72 of Federal Decree-Law No. 28 of 2022; without the original records, the taxable person cannot defend any FTA assessment and faces penalties for failure to keep records. Cloud-based accounting with secure backup eliminates this risk.

5. Failing to Apply IFRS for Key Accounting Estimates

Many UAE SMEs prepare financial statements using simplified cash or modified-cash basis accounting without IFRS adjustments — omitting depreciation on fixed assets, not recognising lease liabilities under IFRS 16, not applying IFRS 9 expected credit loss provisions on trade receivables, and not discounting long-term provisions. Since Federal Decree-Law No. 47 of 2022 Art. 20 bases taxable income on the IFRS accounting profit (with specific adjustments), the absence of IFRS-compliant financial statements means the Corporate Tax computation lacks a reliable starting point and the taxable person cannot demonstrate to the FTA that the return is correct.

Why Choose Abdelhamid & Co for UAE Accounting Services?

  • Ministry of Economy Licensed Auditor — LC0106-01 | Registry No. 956 — licensed to practice as a statutory auditor and accounting services provider in the UAE.
  • FTA Tax Agent TAN: 30003958 | Tax Agency TAAN: 20033908 — accounting services fully integrated with VAT return filing, Corporate Tax return preparation, and FTA audit defence under tax.gov.ae.
  • EAAA Fellow No. 124 | IASCA Fellow No. 1361 — recognised professional standing within the UAE and Arab accounting community.
  • Over 25 years of professional experience in UAE accounting, audit, and tax — IFRS expertise across all sectors including manufacturing, real estate, retail, hospitality, professional services, and financial services.
  • Integrated accounting, tax, and audit under one roof — your accounting records are maintained with audit-readiness and tax compliance built in from the first transaction, eliminating the disconnect between your accountant and your auditor or tax adviser.
  • Cloud-based accounting with real-time access — all clients receive access to their accounting records on their preferred cloud platform, with 7-year secure document retention meeting the requirements of Art. 55 of Federal Decree-Law No. 47 of 2022.
  • Free initial consultation — we review your current accounting setup, identify compliance gaps, and recommend a service package at no charge.

Frequently Asked Questions — UAE Accounting Services

Are UAE companies legally required to maintain accounting records?

Yes. All companies incorporated in the UAE must maintain proper accounting books and records under Art. 26 of Federal Decree-Law No. 32 of 2021 on Commercial Companies. For Corporate Tax purposes, Art. 54 of Federal Decree-Law No. 47 of 2022 requires taxable persons to prepare financial statements; Art. 55 requires all accounting records to be retained for 7 years. For VAT registrants, Art. 78 of Federal Decree-Law No. 8 of 2017 requires retention of all VAT records for 5 years (15 years for real estate). Failure to maintain adequate records is a criminal and regulatory offence.

What accounting standards apply to UAE businesses?

International Financial Reporting Standards (IFRS) are mandatory for companies listed on UAE stock exchanges and required for Corporate Tax purposes under Art. 20 of Federal Decree-Law No. 47 of 2022 — taxable income is determined on the basis of the IFRS accounting net profit. Cabinet Decision No. 75 of 2023 permits smaller entities to use IFRS for SMEs as an alternative to full IFRS. Free zone authorities generally require IFRS-compliant financial statements. Entities applying IFRS for SMEs must ensure their financial statements still meet the Corporate Tax requirements of FDL 47/2022.

How long must UAE businesses retain accounting records?

Under Art. 55 of Federal Decree-Law No. 47 of 2022, accounting records must be retained for 7 years from the end of the relevant tax period for Corporate Tax purposes. Under Art. 78 of Federal Decree-Law No. 8 of 2017, VAT records must be retained for 5 years from the end of the tax period — extended to 15 years for records relating to real estate transactions. The FTA's audit limitation period under Art. 72 of Federal Decree-Law No. 28 of 2022 is 5 years (15 years for fraud), so records must be available to respond to any FTA audit within these windows.

Does outsourcing accounting to a UAE firm comply with the law?

Yes. Federal Decree-Law No. 32 of 2021 and Federal Decree-Law No. 47 of 2022 require companies to maintain proper accounting records and prepare financial statements — they do not require the records to be maintained by an in-house employee. Engaging a licensed accounting firm (Ministry of Economy Licence LC0106-01) to maintain your books fully satisfies these obligations, provided the records are complete, accurate, and retained for the required periods. The company directors remain legally responsible for the accuracy of the records and financial statements.

How does Corporate Tax affect UAE accounting obligations?

Federal Decree-Law No. 47 of 2022 has significantly increased accounting obligations for UAE businesses. Taxable persons must now: (1) prepare IFRS or IFRS for SMEs financial statements as the basis for the Corporate Tax return (Art. 20); (2) maintain records for 7 years (Art. 55); (3) compute taxable income starting from accounting profit with specific adjustments for non-deductible expenses (Art. 28), exempt income, and related-party transactions (Arts. 34–36); (4) prepare transfer pricing documentation for transactions exceeding AED 40 million (Ministerial Decision No. 97 of 2023); and (5) have financial statements audited if revenue exceeds AED 50 million or QFZP status is claimed (Ministerial Decision No. 82 of 2023).

What is WPS and how does it affect payroll accounting?

The Wages Protection System (WPS) is the Ministry of Human Resources and Emiratisation (MOHRE) mandatory salary transfer system for all UAE private sector employers. Employers must pay all employee salaries through MOHRE-approved financial institutions, generating a WPS salary transfer file for each payroll cycle. Failure to comply results in MOHRE sanctions including inability to process new or renewed work permits and potential fines. From an accounting perspective, WPS requires the payroll ledger to match the WPS transfer records exactly — discrepancies between payroll accounting entries and WPS bank transfers create compliance risk and audit exposure.

What financial statements must a UAE LLC prepare annually?

Under Art. 78 of Federal Decree-Law No. 32 of 2021, an LLC must prepare annual financial statements and present them to the shareholders within the period specified in the company's memorandum of association. For Corporate Tax purposes under Federal Decree-Law No. 47 of 2022, the financial statements must comply with IFRS (or IFRS for SMEs per Cabinet Decision No. 75 of 2023) and comprise at minimum: a statement of financial position, a statement of profit or loss (and other comprehensive income where applicable), a statement of changes in equity, a statement of cash flows, and notes including Corporate Tax disclosures under IFRS IAS 12.

Do free zone companies in the UAE need to maintain accounting records?

Yes — all free zone entities incorporated under UAE law must maintain accounting records. Free zone entities claiming the 0% Qualifying Free Zone Person (QFZP) Corporate Tax rate under Federal Decree-Law No. 47 of 2022 must have their financial statements audited (Ministerial Decision No. 82 of 2023) and demonstrate that their qualifying income derives from qualifying activities with adequate substance. Accurate accounting is the evidentiary foundation of the QFZP claim. Free zone authorities also impose their own annual reporting requirements, typically requiring audited financial statements as a condition of licence renewal.

Contact Our Accounting Team

To engage Abdelhamid & Co for outsourced accounting, bookkeeping, payroll, or financial statement preparation, contact us today:

Abdelhamid & Co Certified Public Accountants & Auditors LLC — Ministry of Economy Licence LC0106-01 | Licensed Auditor Registry No. 956 | FTA Tax Agent TAN: 30003958 | Tax Agency TAAN: 20033908 | EAAA Fellow No. 124 | IASCA Fellow No. 1361

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About the Firm

Abdelhamid M. Abdelhamid — Partner & Managing Director
Ministry of Economy Licensed Auditor (LC0106-01, Registry No. 956) | FTA Tax Agent (TAN: 30003958) | Tax Agency (TAAN: 20033908) | EAAA Fellow No. 124 | IASCA Fellow No. 1361 | Over 25 years of UAE accounting, audit, and tax experience | FTA Registered Tax Agent | LinkedIn

Last reviewed: 28 April 2026 — updated to reflect Federal Decree-Law No. 47 of 2022 (Corporate Tax, Arts. 20, 54–56), Cabinet Decision No. 75 of 2023 (IFRS for SMEs), Ministerial Decision No. 82 of 2023 (audit thresholds), Federal Decree-Law No. 32 of 2021 (Commercial Companies), Federal Decree-Law No. 8 of 2017 (VAT record-keeping), and Federal Decree-Law No. 33 of 2021 (Labour Law).

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Email: info@abdelhamidcpa.com

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