Many Romanian entrepreneurs believe that UAE firms are completely exempt from any form of reporting, but the reality is more nuanced.
Although taxation is one of the friendliest in the world, there are clear rules on financial accounting, auditing and annual reporting.
This guide details how Dubai accounting rules apply, depending on the structure of the firm (Free Zone or Mainland), and explains what documents need to be prepared in 2025 for full tax compliance.
Dubai Accounting- How It Works
Dubai's accounting system is based on the International Financial Reporting Standards (IFRS) — the same rules as applied in the European Union.
The major difference is that instead of controls and bureaucracy, the UAE authorities impose transparent, but simplified record-keeping.
Every company, whether in the Free Zone or Mainland, must maintain clear accounting that reflects:
• Real income and expenses of the firm;
• Assets, liabilities and equity;
• Transactions with internal or external partners;
• VAT documents (if the company is registered).
Although corporate tax and VAT are low, the state requires a minimum of financial transparency to demonstrate that the firm's activity is legitimate and compliant.
Who is obliged to keep accounting in Dubai
All companies holding an active commercial license are required to keep accounting records.
However, the level of complexity differs depending on the structure of the firm:
Companies in the Free Zone:
It must maintain complete accounting and submit annual financial report to the area authority (ex: IFZA, DMCC, Meydan).
In many cases, an annual audit is also required if the firm exceeds a certain volume of revenue.
Companies in Mainland:
Have an obligation to keep detailed accounting records and submit reports to Ministry of Finance (MoF)and Federal Tax Authority (FTA), especially if they are registered for VAT or corporate tax.
• Small businesses without activity:
Even if they have not had transactions, they must keep zero financial statements, in order to keep their license valid.
Accounting Dubai - Required documents
To remain compliant with local legislation, each company must keep the following documents for at least 5 years:
• Sales and purchase invoices (including international);
• Bank statements;
• Commercial and service contracts;
• VAT declarations and reports (if applicable);
• Accounting sheets and income/expense registers;
• Annual financial report approved by the auditor (if required).
Most Free Zones require that these documents be kept in digital format, easily accessible to tax authorities upon request.
Before you start accounting, it is important to understand the applicable tax regime. See how it is calculatedcorporate income tax in Dubai and which firms are exempt from paying it.
Dubai Audit — when it becomes mandatory
In the Dubai accounting system, auditing is not mandatory for all companies, but it becomes necessary in the following cases:
• Turnover exceeds 50,000 AED/month or 500,000 AED/year;
• The company is registered for corporate tax;
• Require the renewal of the commercial license in certain Free Zones;
• The company wants financing, bank credit or residency visa for shareholders.
Free Zones such as DMCC, Meydan Free Zone and DAFZA request an external audit conducted annually by a chartered accountant in the Emirates.
Annual reports — how and when to file
Financial reporting in Dubai is simple, fully digital.
Firms must submit financial statements to their authority within 3—6 months after the close of the fiscal year.
Typical stages:
1. Accounting closure and verification of transactions.
2. Drawing up the balance sheet and profit and loss account.
3. External audit (if required).
4. Submission of the annual report to the Free Zone Authority or the Ministry of Finance.
For firms registered with the FTA (Federal Tax Authority), accounting data also serve for:
• Quarterly VAT reporting;
• Calculation of corporate tax;
• Declarations of tax compliance.
How to keep accounting for companies tax-free
Even though many firms benefit from 0% corporate tax, accounting in Dubai remains mandatory.
It confirms that income comes from legal, external and licence-compliant activities.
For companies in the Free Zone:
• All income from outside the Emirates must be clearly highlighted.
• Deductible expenses (rent, wages, advertising) must be documented.
• All documents must be kept in English or Arabic at the request of the authorities.
A major advantage of the Dubai accounting system is flexibility: there is no bureaucracy, and accounting can be done completely online, with digital signatures and cloud archiving.
Practical examples — how to apply the rules according to the type of company
1. International consulting firm:
Registered in IFZA, provides customer service in Europe. It keeps track of income, but is exempt from corporate tax - annual simplified audit.
2. Global online store:
Cross-border trade, no sales in the UAE. Reports of sales and delivery costs are kept, but VAT = 0%.
3. IT Start-ups:
DMCC firm invoicing global clients. It has full digital accounting and external audit once a year.
What happens if you do not follow the rules of accounting
The authorities may require:
• Fines between 5,000 and 50,000 AED for missing annual reports;
• Suspension of the commercial license until the submission of documents;
• Refusal to renew the residence visa for shareholders.
That is why working with a local accountant or consulting firm specializing in Dubai accounting is essential.
Although the UAE tax regime is one of the most advantageous in the world, firms still need to maintain accurate and up-to-date accounting.
Annual reporting, audit and accounting documents are minimum requirements to demonstrate transparency and compliance.
For Romanian entrepreneurs who own or plan to set up a firm in the UAE, Dubai accounting does not mean bureaucracy, but stability and international credibility.
If you want to know exactly what accounting obligations your company has and how you can effectively manage annual reporting, contact the team Dubai Business Arena.
We offer complete Dubai accounting, tax reporting and financial consulting services for Romanian entrepreneurs who want a safe and compliant business in the Emirates.
