Good accounting records have always been important for a business.
They show what the business earned, what it spent, what it owns and what it owes. They also form the basis for VAT reporting, Corporate Tax calculations and financial reporting.
In 2026, the Federal Tax Authority has issued FTA Decision No. 4 of 2026 on the Rules and Requirements for Maintaining the Information Contained in Accounting Records and Commercial Books. The Decision was issued on 2 June 2026 and published by the FTA on 20 August 2026.
The development highlights an issue that can sometimes be overlooked: maintaining accounts is not just about producing financial statements at the end of the year.
Having accounts and having proper records are not quite the same thing
A business may have a balance sheet and profit and loss statement, but that does not necessarily mean the underlying records are complete.
The figures in those reports come from individual transactions. Sales, purchases, expenses, bank movements, assets, liabilities and other entries all contribute to the final numbers.
When the underlying records are properly maintained, it becomes much easier to understand where a figure came from and to support it when required.
When records are incomplete, the financial statements may still look presentable, but tracing individual balances can become difficult.
Tax compliance depends on the accounting trail
This becomes particularly relevant for VAT and Corporate Tax.
A VAT return is based on transactions recorded during the relevant tax period. Corporate Tax starts from accounting income and then applies the relevant tax adjustments.
In both cases, the tax return is connected to the accounting records behind it.
That connection becomes especially important where the FTA needs clarification about a particular transaction, balance or amount reported in a return.
The problem is often not the absence of documents
In practice, businesses do not necessarily lack records altogether.
The issue is often that the information is spread across different places.
An invoice may be in an email. A contract may be held by the commercial team. Payment information may be in the bank statement. The accounting entry may be in the ERP. Supporting documents for an old transaction may be difficult to locate.
Individually, these records may all exist. The difficulty comes when they need to be brought together to explain a transaction or balance.
That is where a properly organised accounting process becomes valuable.
Records also become important when a business grows
The accounting process that works for a small business with a limited number of transactions may become difficult to manage as the business expands.
More suppliers, more employees, additional bank accounts, multiple entities or higher transaction volumes naturally create more records.
Without a consistent process, it becomes easier for information to be missed or retained inconsistently.
This is one reason accounting should not be viewed only as a monthly reporting exercise. The records being created today may also be needed much later for tax, audit or other financial purposes.
A reliable accounting trail is part of tax compliance
The recent FTA Decision is another reminder that tax compliance does not begin when a business opens EmaraTax and starts preparing a return.
It starts much earlier — with how transactions are recorded and how the supporting information is maintained.
For businesses, the practical value is straightforward: when the accounting records are complete and properly organised, preparing tax returns becomes more reliable and responding to questions becomes considerably easier.
E Craft Global Accounting & Tax Services assists businesses in the UAE with bookkeeping, accounting records, reconciliations, financial reporting, VAT and Corporate Tax compliance, helping maintain the accounting information behind the numbers reported to the authorities.