Is it compulsory to maintain books of accounts?

Is it compulsory to maintain books of accounts?

 it is mandatory to maintain the books of accounts.

It is mandatory to maintain books of accounts 

Yes, It is mandatory to maintain books of accounts.

All business owners are required to maintain their financial and accounting records going back at least five years.

 It is mandatory to maintain the books of accounts under VAT law and UAE laws.

 it is mandatory to maintain the books of accounts under UAE company law and VAT law

It is mandatory for the companies to maintain the books of accounts for at least 5 years in accordance with the Federal Law No 2 of 2015 on Commercial Companies and the UAE VAT law and relevant free zone laws. Maintaining proper books of accounts is compulsory in the UAE and any violations will attract administrative penalties.

Businesses in UAE need to have qualified accountants to maintain their books of accountants in compliance with local laws & regulations and as per International  Financial Reporting Standards (IFRS). Another good option for the companies is outsource accounting and book-keeping services to accounting companies in the UAE. Hiring services of accounting & bookkeeping firms allow them to focus more on their company operations and completion of the business goals.

Under Federal Law No. (2) of 2015 Commercial Companies in the United Arab Emirates ( UAE) Article 26, it is mandatory to maintain the books of accounts under UAE company law and VAT law. Hence accounts maintenance in Dubai and all other emirates in UAE is compulsory.

The requirement to maintain books of accounts depends on various factors, including the jurisdiction, the type of business, and the applicable laws and regulations. In many countries, businesses are legally obligated to maintain proper books of accounts and financial records.

Keeping accurate and up-to-date books of accounts is crucial for several reasons:

Legal Compliance: Many jurisdictions have specific laws and regulations that require businesses to maintain books of accounts. These laws aim to promote transparency, prevent fraud, and facilitate the preparation of accurate financial statements and tax returns.

Financial Reporting: Maintaining books of accounts enables businesses to prepare financial statements, such as income statements, balance sheets, and cash flow statements. These statements provide valuable insights into the financial health of a company and are often required for reporting to stakeholders, investors, and regulatory authorities.

Taxation: Properly maintained books of accounts serve as a basis for calculating taxable income and fulfilling tax obligations. Tax authorities may require businesses to submit financial records to verify the accuracy of tax returns and assess the appropriate amount of tax liability.

Business Analysis and Decision Making: Books of accounts provide a comprehensive record of a company's financial transactions, including sales, expenses, assets, and liabilities. Analyzing these records can help businesses understand their financial performance, identify areas for improvement, and make informed decisions for future growth and profitability.

While the specific requirements for maintaining books of accounts may vary, it is generally advisable for businesses, regardless of legal obligations, to maintain accurate financial records. Doing so promotes transparency, facilitates effective financial management, and ensures compliance with applicable laws and regulations. It is recommended to consult with a qualified accountant or legal professional to understand the specific requirements and obligations in your jurisdiction.