Quick answer: A year end accounting checklist for UAE companies covers bank and cash reconciliations, receivables and payables, inventory and fixed assets, accruals, payroll, related-party balances, VAT reconciliation, and corporate tax adjustments, then a financial statement review. Closing the books is separate from tax filing: the corporate tax return is generally due within nine months of the end of your tax period. Need help? See our year-end accounting support in Dubai.
Last updated: October 2026. Deadlines and rules change, so confirm current requirements with the Federal Tax Authority (FTA) or your adviser.
With the end of 2026 approaching, finance teams across the UAE are planning how to close their books accurately and on time. This guide walks through what to reconcile, what to review, and what to prepare for your auditor and tax filings, in the order most finance teams work through it.
A note on timing: “Calendar-year closing” applies only to companies whose financial year ends on 31 December. If your financial year ends on a different date, such as 31 March or 30 June, use the same checklist but apply it to your own year-end date. Starting four to six weeks before your year-end gives you time to fix problems rather than just find them.
Why Does Year-End Accounting Preparation Matter?
Year-end is when a business’s records are tested. The accounts you finalise feed directly into your audited financial statements, your VAT position, and your corporate tax computation. Errors found late are slower and more expensive to fix, and they can lead to adjustments, restated figures, or penalties.
A well-prepared close also helps in practical ways. It gives management reliable figures for budgeting, supports bank and investor requests, and makes the audit faster because the supporting documents are already in order.
Accounting Close vs Tax Return Filing: What Is the Difference?
These are two separate steps with different deadlines, and they are often confused.
| Activity | What it is | Timing |
|---|---|---|
| Accounting close | Reconciling accounts, posting adjustments, and finalising the financial statements | Set by your own year-end and internal calendar |
| Audit (where required) | Independent review of the financial statements | Depends on your licence, company type, lenders, and the rules that apply to you |
| VAT returns | Periodic returns to the FTA | Due per VAT tax period (monthly or quarterly), generally by the 28th day after the period ends |
| Corporate tax return | Annual return and payment to the FTA | Within nine months of the end of the relevant tax period |
Do not assume every company has the same corporate tax deadline. It depends on the company’s tax period and the rules that apply to it. As the FTA’s own example puts it, a company whose financial year ends on 31 December 2025 must file and pay by 30 September 2026. On that logic, a 31 December 2026 year-end points to 30 September 2027, but a company with a different tax period will have a different date. Confirm yours in your EmaraTax account.
How Should You Handle Bank and Cash Reconciliations?
Start here, because every other balance depends on the cash being right.
- Reconcile every bank account to the year-end statement, including current, savings, foreign currency, and dormant accounts.
- Clear old reconciling items. Investigate unpresented cheques, deposits in transit, and unexplained differences, rather than carrying them forward.
- Count and reconcile petty cash and cash on hand, and confirm that cash registers match the ledger.
- Check payment gateway and wallet balances (card processors, online payment platforms) for settlements still in transit.
- Revalue foreign currency balances at the year-end rate.
- Obtain bank confirmations for balances, loans, and guarantees if your auditor will request them.
How Do You Review Receivables, Payables, and Bad Debts?
Accounts receivable
- Reconcile the receivables ledger to the control account and to customer statements.
- Run an ageing report and follow up all overdue invoices before year-end.
- Identify unbilled work and issue outstanding invoices so revenue lands in the right period.
- Assess doubtful debts and decide on provisions or write-offs, with documented reasons.
Accounts payable
- Reconcile supplier statements to the payables ledger.
- Record all goods and services received before year-end, even if the invoice has not arrived.
- Check for duplicate invoices, unapplied payments, and debit balances.
- Cut off properly: invoices for next year’s costs should not be booked into this year.
Bad debts
Accounting write-offs and tax treatment are not always the same. VAT bad debt relief and the corporate tax deduction for bad debts each have their own conditions, so check these before adjusting your VAT or tax figures.
What Should You Check for Inventory, Fixed Assets, Depreciation, and Accruals?
Inventory
- Perform a physical stock count and reconcile it to the stock records.
- Value inventory at the lower of cost and net realisable value, and write down slow-moving or obsolete items.
- Check goods in transit and consignment stock for correct ownership and cut-off.
Fixed assets and depreciation
- Update the fixed asset register for additions, disposals, and transfers.
- Verify that assets exist and are in use.
- Review useful lives, depreciation rates, and any impairment indicators.
- Record the year’s depreciation and reconcile the register to the ledger.
Accruals and prepayments
- Accruals: record expenses incurred but not yet invoiced, such as utilities, professional fees, interest, rent, and bonuses.
- Prepayments: spread costs paid in advance (insurance, licences, rent, subscriptions) over the periods they cover.
- Deferred income: defer revenue received for services not yet delivered.
How Do You Reconcile Payroll, Employee Benefits, Loans, and Related-Party Balances?
Payroll and employee benefits
- Reconcile payroll totals to the general ledger and to Wage Protection System (WPS) records.
- Accrue unpaid salaries, bonuses, overtime, and leave pay.
- Calculate end-of-service gratuity liability for each employee and confirm the provision matches.
- Check visa, insurance, and employee-related fees for correct period allocation.
If payroll is handled externally, ask your provider for year-end reports to reconcile. See our payroll outsourcing services if you want a provider to manage payroll for you.
Loans and financing
- Agree loan balances to lender statements.
- Accrue interest and split current and non-current portions.
- Check covenant compliance and note any breaches for disclosure.
Related-party balances
- List all related parties, including shareholders, directors, and group companies.
- Reconcile balances with each related party and confirm both sides agree.
- Document the terms, pricing, and purpose of related-party transactions. Related-party and connected-person transactions are relevant for corporate tax, where the arm’s length principle applies, and they need disclosure.
How Do You Reconcile VAT and Prepare for Corporate Tax Adjustments?
VAT reconciliation
Your VAT returns and your accounting records should tell the same story. Differences are a common trigger for FTA queries.
- Reconcile output VAT in the returns to sales in the ledger, by period and by treatment (standard-rated, zero-rated, exempt).
- Reconcile input VAT to purchases and expenses, and check that recoverability is supported by valid tax invoices.
- Review reverse charge entries, imports, and adjustments.
- Agree the VAT control account to the VAT payable or refundable position.
- If you find errors in a filed return, take advice on whether a voluntary disclosure is needed.
Our VAT consultancy team can review your year’s returns against the ledger.
Corporate tax adjustments
Corporate tax starts from accounting profit and adjusts it to arrive at taxable income. Preparing support during the close makes the computation much easier. Points to review include:
| Area | What to prepare |
|---|---|
| Non-deductible and partly deductible expenses | Separate fines and penalties, and entertainment costs, where specific rules apply |
| Related-party transactions | Pricing support, agreements, and balances for arm’s length and disclosure purposes |
| Depreciation and provisions | Schedules showing accounting treatment, so tax treatment can be compared |
| Interest and financing costs | Loan agreements and interest schedules |
| Unrealised gains and losses | Details of revaluations and any tax elections made |
| Reliefs and elections | Whether Small Business Relief or Qualifying Free Zone Person status applies |
This table highlights review areas only. The correct tax treatment depends on the legislation and your facts, so confirm it with a tax adviser. Our corporate tax consultants in the UAE can prepare or review the computation.
Two relief checks for year-end:
- If your revenue is AED 3 million or less, check whether Small Business Relief is available, since it must be elected in the return.
- If you are a free zone company, test the de minimis limit and substance now, using our guide to free zone corporate tax, because a Qualifying Free Zone Person must also prepare audited financial statements.
How Do You Prepare for the Audit and Review the Financial Statements?
Who needs audited accounts?
Audit requirements depend on your company type, licence, free zone authority, and what lenders or investors ask for. For corporate tax purposes, Ministerial Decision No. 84 of 2025 requires audited financial statements for taxable persons with revenue above AED 50 million, and for Qualifying Free Zone Persons, for tax periods starting on or after 1 January 2025.
What to have ready for your auditor
- Final trial balance and general ledger
- Bank, receivable, payable, and loan reconciliations and supporting statements
- Fixed asset register, depreciation schedule, and inventory count sheets
- Payroll reports and end-of-service gratuity calculation
- VAT returns and reconciliations
- Contracts, lease agreements, and board or shareholder minutes
- Related-party schedules and legal or regulatory correspondence
Financial statement review
Before sending the draft to your auditor, review it yourself:
- Do the balance sheet, income statement, and cash flow statement agree with each other?
- Do year-on-year movements make sense, and can you explain the large ones?
- Are accounting policies applied consistently, and are disclosures complete?
- Have events after the year-end and going concern been considered?
If you need an independent audit, see our audit services. If you need help preparing the financial statements first, our financial statement preparation services can support your finance team. Audit independence rules may limit one firm doing both for the same client, so ask about this when you engage.
Year-End Accounting Checklist for UAE Companies
Use this checklist to track your close. Click each box as your team completes the item, and print the page or save it as a PDF to share with your team.
| Done | Area | Check |
|---|---|---|
| Bank and cash | All bank accounts reconciled to year-end statements; old reconciling items cleared | |
| Bank and cash | Petty cash counted; payment gateway balances checked; foreign currency balances revalued | |
| Receivables | Ledger reconciled to control account; ageing reviewed; overdue invoices followed up | |
| Receivables | Outstanding invoices issued; unbilled work recorded; doubtful debts assessed | |
| Payables | Supplier statements reconciled; unrecorded liabilities booked; duplicates and debit balances reviewed | |
| Accruals | Expenses incurred but not invoiced accrued (utilities, fees, interest, bonuses) | |
| Prepayments | Advance payments spread over the periods they cover; deferred income identified | |
| Inventory | Physical count done and reconciled; obsolete stock written down; cut-off checked | |
| Fixed assets | Register updated for additions and disposals; depreciation recorded; impairment reviewed | |
| Payroll | Payroll reconciled to ledger and WPS; unpaid salaries and leave accrued; gratuity provision updated | |
| Loans | Balances agreed to lender statements; interest accrued; current and non-current split | |
| Related parties | Related-party list updated; balances agreed with each party; terms documented | |
| VAT | Output and input VAT reconciled to ledger; control account agreed; errors reviewed | |
| Corporate tax | Accounting-to-tax adjustments identified; supporting schedules prepared; reliefs and elections assessed | |
| Tax records | Tax invoices, contracts, and supporting documents organised and stored | |
| Financial statements | Draft statements reviewed for consistency, disclosures, and year-on-year movements | |
| Audit | Audit pack ready (trial balance, schedules, confirmations, contracts) | |
| Filing calendar | VAT and corporate tax deadlines confirmed for your own tax period |
Looking Ahead
Large businesses (annual revenue of AED 50 million or more) are due to go live with UAE e-invoicing on 1 January 2027, so year-end is also a good time to confirm that invoicing systems are ready. Smaller businesses follow in July 2027.
What Year-End Mistakes Should You Avoid?
- Starting the close after year-end instead of preparing in advance.
- Treating the close as the same thing as tax filing.
- Assuming every company shares the same corporate tax deadline.
- Leaving old reconciling items unexplained.
- Missing year-end cut-off, so revenue and costs land in the wrong period.
- Forgetting accruals, prepayments, and end-of-service liabilities.
- Not reconciling VAT returns to the ledger.
- Ignoring related-party balances and their documentation.
- Throwing away supporting records too early. The FTA requires corporate tax records to be kept for at least seven years after the end of the relevant tax period.
Need Help Closing Your 2026 Books?
Farahat & Co. helps UAE businesses close their books accurately, from reconciliations and adjustments to financial statements, VAT, and corporate tax support.
We offer a year-end accounts review and an audit-readiness assessment. We check your reconciliations, identify gaps and adjustments, and tell you what needs to be fixed before your auditor or the FTA asks. Our team provides accounting services in Dubai covering everything from bookkeeping to year-end close.
Not sure your books are ready? Request a year-end accounts review before your year-end, while there is still time to act.
Frequently Asked Questions
What should be in a year end accounting checklist for UAE companies?
It should cover bank and cash reconciliations, receivables and payables, bad debts, inventory, fixed assets and depreciation, accruals and prepayments, payroll and end-of-service balances, loans, related-party balances, VAT reconciliation, corporate tax adjustments, and a review of the financial statements.
When should UAE companies start year-end closing?
Ideally four to six weeks before the financial year ends. For a 31 December year-end, that means starting around November.
Does every UAE company close its books on 31 December?
No. A calendar-year closing applies only to companies whose financial year ends on 31 December. Other companies should apply the same checklist to their own year-end date.
Is closing the books the same as filing the corporate tax return?
No. Closing the books is an accounting process set by your own timetable. The corporate tax return is a separate filing, generally due within nine months of the end of the relevant tax period.
When is the corporate tax return due?
Generally within nine months of the end of the tax period, with any tax due paid by the same date. The exact date depends on your tax period, so do not assume it is the same for every company.
Why should I reconcile accounting records with VAT returns?
Differences between your ledger and your VAT returns can lead to FTA queries and penalties. Reconciling output and input VAT to your accounts helps you find and correct errors before they become a problem.
Do UAE companies need audited financial statements?
It depends on the company type, licence, free zone authority, and lender or investor requirements. For corporate tax, taxable persons with revenue above AED 50 million and Qualifying Free Zone Persons must prepare audited financial statements.
How long should accounting and tax records be kept?
The FTA requires corporate tax records to be kept for at least seven years after the end of the tax period they relate to.
Sources and Official References
- FTA: record retention and Corporate Tax return deadline, Federal Tax Authority
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, UAE Ministry of Finance
- Ministerial Decision No. 84 of 2025 on Audited Financial Statements, UAE Ministry of Finance
- VAT and Corporate Tax legislation and guides, Federal Tax Authority
Disclaimer: This content is provided for general informational purposes only and does not constitute accounting, audit, tax, or legal advice. Requirements depend on your company type, licence, financial year, and the legislation in force. Please consult a qualified adviser before making decisions.
