Year End Accounting Checklist for UAE Companies
Gratuity, bad debts and depreciation cannot be estimated the week before your audit. Here is the reconciliation and document checklist that keeps your close, audit and Corporate Tax filing on the same track.
Year end closing is where a year of otherwise decent bookkeeping either holds up or falls apart. The transactions are usually recorded correctly by the time December ends, what is missing is the set of judgement calls, gratuity, bad debts, depreciation, that turn a transaction list into a proper set of financial statements. Skip them and your auditor finds them for you, later, more expensively, and often close to your Corporate Tax filing deadline.
This checklist covers what to reconcile and provide for before you close the year, what documents your auditor and the Federal Tax Authority will expect, and a realistic timeline that keeps the whole process from becoming a scramble in September.
Reconciliations and provisions to complete before close
These are the items that do not appear automatically from day to day bookkeeping and need a deliberate year end review.
Employee gratuity. Under UAE labour law, an end of service gratuity accrues from an employee’s first day of service, calculated against their basic salary and years worked. This is a liability the company owes, whether or not anyone is about to leave. Reviewing and updating the gratuity provision at year end, not only when someone resigns, is what keeps the balance sheet honest and avoids a large, unplanned expense hitting a single year’s accounts.
Bad debts. Review every material receivable that is significantly overdue and assess realistically whether it will be collected. Debts that will not be recovered need to be written off, or provided for, rather than left sitting on the balance sheet inflating both your assets and your reported profit. This matters more once Corporate Tax applies, since an overstated profit figure can mean an overstated tax bill.
Depreciation. Confirm your fixed asset register is complete, that additions and disposals during the year are correctly reflected, and that depreciation has been charged consistently with your stated accounting policy. A fixed asset bought in month three and one bought in month eleven should not be depreciated as if both had a full year of use.
Other common year end items worth a deliberate check rather than an assumption:
- Bank and cash reconciliations against year end statements, not just monthly totals
- Accruals for expenses incurred but not yet invoiced, such as year end utility bills or professional fees
- Prepayments, so a payment covering next year’s insurance or rent is not fully expensed in the current year
- Inventory counts and valuation, where applicable, reconciled against the accounting records
- Related party balances and transactions, reviewed for consistency with transfer pricing documentation where relevant
- VAT reconciliation between the VAT return figures filed during the year and the general ledger
| Item | Why it matters at year end |
|---|---|
| Gratuity provision | Real labour law liability, understated if only calculated on resignation |
| Bad debt review | Overstated receivables inflate profit and, potentially, tax |
| Depreciation | Must reflect actual asset additions, disposals and usage period |
| Accruals and prepayments | Match expenses and income to the year they actually belong to |
| Related party balances | Feeds directly into transfer pricing documentation |
Documents needed for audit and Corporate Tax filing
Once the reconciliations above are done, gather the supporting documents your auditor and your Corporate Tax return will draw on. Having these ready before the process starts is what separates a four week close from a four month one.
- Trial balance and general ledger for the full financial year
- Bank statements for every account, covering the full year
- Sales invoices and a complete accounts receivable ageing report
- Purchase invoices and a complete accounts payable ageing report
- Fixed asset register with supporting purchase invoices for additions
- Payroll records and the calculation basis for the gratuity provision
- Lease agreements, loan agreements and any other contracts with ongoing financial impact
- VAT returns filed during the year, reconciled to the accounting records
- Prior year audited financial statements, for comparison and opening balances
- Trade license and any Free Zone or Qualifying Free Zone Person supporting documentation, if relevant to your Corporate Tax position
If you are a Free Zone company relying on 0% Corporate Tax as a Qualifying Free Zone Person, the audited IFRS financial statement is not optional paperwork, it is one of the conditions for keeping that status. Missing or incomplete documentation at this stage is one of the more common ways companies unexpectedly find themselves outside the Qualifying Free Zone Person conditions.
A timeline that aligns your close with FTA deadlines
Corporate Tax returns are due nine months after your financial year end, for a 31 December year end that means 30 September the following year, and the tax payment falls on the same date. Working backward from that date, rather than starting the close only once the deadline is visible, is what keeps the process calm instead of rushed.
A realistic sequence for a 31 December year end:
- January to mid February: complete reconciliations and provisions, gratuity, bad debts, depreciation, accruals and prepayments, while the year is still fresh and the underlying records are easy to trace
- Mid February to end March: draft financial statements prepared, reviewed internally, and any prior year comparatives finalised
- April to June: audit fieldwork, if required, with queries resolved while there is still plenty of runway before the filing deadline
- July to August: Corporate Tax return prepared from the finalised, audited figures, including the Small Business Relief election if applicable
- By 30 September: Corporate Tax return filed and tax paid
The single biggest risk to this timeline is starting the reconciliation work late. An audit built on a trial balance that still needs the gratuity provision corrected, the bad debts reviewed and the fixed asset register tidied does not move quickly, and every week lost at the start compresses the time available before the FTA deadline.
Conclusion
Year end closing is not a formality that happens automatically once the last invoice of December is recorded. Gratuity, bad debts and depreciation are judgement calls that need a deliberate review, the document set your auditor and the FTA expect needs to be assembled in advance, and the whole process works best when it starts in January, not in August.
We manage the full year end close for UAE companies, bookkeeping to IFRS, reconciliations and audit-ready reporting, through to Corporate Tax filing, at fixed prices.
Talk to us, the initial consultation is free.
As of July 2026. This article is general information and is no substitute for advice in an individual case.
Read on: UAE corporate tax filing deadline · Audit requirements for UAE companies · UAE bookkeeping and record keeping rules
Frequently asked questions
What is the single most missed item at year end for UAE companies?
The employee gratuity provision. It is a real liability owed under UAE labour law from an employee first day, not something you calculate once someone resigns. Companies that only work it out at the point of departure routinely understate their liabilities all year, and the correction lands as an uncomfortable surprise at audit.
Do I need an audited financial statement to file Corporate Tax?
It depends on your structure. Free Zone companies claiming 0% as a Qualifying Free Zone Person need an audited IFRS financial statement as one of the conditions. Many Mainland companies are also required to have an audit depending on revenue thresholds and licence type. Even where an audit is not strictly mandatory, a properly reconciled set of accounts is what your Corporate Tax return is based on either way.
How long after year end do I have to file Corporate Tax?
Nine months from the end of your financial year. For a 31 December year end, that is 30 September of the following year, and the tax payment is due on the same date. Registration with the Federal Tax Authority is a separate, earlier obligation that applies regardless of profit.
What happens if I skip the write off review for bad debts?
Your receivables balance overstates what you can actually collect, which overstates profit and, once Corporate Tax applies, can overstate your tax bill too. A proper bad debt review each year end, with the accounting and, where relevant, the tax treatment applied correctly, keeps both your financial statements and your tax return closer to reality.
Can I do the year end close myself if I already use accounting software?
Software handles the transaction recording, it does not automatically apply judgement calls like provisions, depreciation policy or bad debt write offs. Many owner run companies keep clean day to day books but still need an accountant to close the year properly, since the reconciliations and provisions are where errors and audit findings concentrate.
When should I start the year end close process?
As soon as the financial year ends, not when the audit deadline is close. A realistic timeline runs reconciliations and provisions in the weeks immediately after year end, has draft financials ready within four to six weeks, and leaves enough runway before your Corporate Tax filing date for the audit, if required, and any adjustments that come out of it.