Year-end close: what it means for UAE businesses.

What year-end close means

Also called: Annual close, Financial year-end close.

Year-end close is the process of finalising the books for a whole financial year. It includes everything in a month-end close, plus annual work: counting stock, reviewing asset values and depreciation, updating the end-of-service gratuity provision, recording provisions and accruals, calculating the Corporate Tax charge and producing the full financial statements.

Several UAE deadlines depend on it. Under the Commercial Companies Law, an LLC manager must prepare the annual balance sheet, profit and loss account and a report within three months of the year end (Article 87), and the general assembly must meet within four months (Article 92). An LLC must have an auditor under Article 27. For Corporate Tax, the tax period is normally the financial year, and both the return and the payment are due within nine months of its end under Articles 53 and 48.

Some businesses must also have audited financial statements for Corporate Tax: those with revenue above AED 50,000,000 and every Qualifying Free Zone Person, under Ministerial Decision No. 84 of 2025. Once the year is closed, the records behind it must be kept for seven years under Article 56 of the Corporate Tax Law.

How it works

• Complete the final month-end close, then count stock and reconcile it to the ledger.
• Post depreciation, the end-of-service gratuity top-up, provisions and year-end accruals.
• Calculate Taxable Income and the Corporate Tax charge, applying 0% up to AED 375,000 and 9% above it.
• Prepare the full financial statements, arrange the audit where required, and hold the general assembly within four months.
• File the Corporate Tax return and pay within nine months of the year end, and keep the records for seven years.

Worked example

A Dubai marketing agency with a 31 December year end finishes its draft accounts and posts year-end adjustments. All adjustments are assumed deductible and no other tax adjustments apply.

Draft profit before year-end adjustments	AED 910,000
Depreciation for the year	AED (85,000)
End-of-service gratuity top-up	AED (45,000)
Accrued December rent and utilities	AED (30,000)
Final accounting profit	AED 750,000
Corporate Tax: 9% on the 375,000 above 375,000	AED 33,750

Year-end adjustments of AED 160,000 cut profit and reduce the Corporate Tax charge by AED 14,400 compared with the draft figure.

Common mistakes

• Filing the Corporate Tax return from draft figures before the year-end adjustments and audit are complete.
• Forgetting that an LLC's general assembly must meet within four months of the year end to approve the accounts.
• Changing the financial year end without considering the Corporate Tax period, which follows the financial year and needs an FTA application to change.

The law

• Federal Decree-Law No. 32 of 2021 on Commercial Companies, Article 26, Article 27, Article 28 (Fiscal year), Article 87 (Responsibility for preparing the accounts) and Article 92 (general assembly)
• Federal Decree-Law No. 47 of 2022, as amended, Articles 48, 53, 56, 57 and 58
• Ministerial Decision No. 84 of 2025 on Audited Financial Statements, Article 2

Frequently asked questions

How long must we keep year-end records?

Article 26 of the Commercial Companies Law sets at least five years from the end of the financial year, but Article 56 of the Corporate Tax Law requires seven years after the end of the tax period. Keeping them for seven years meets both.

Does every company need audited accounts for Corporate Tax?

No. Ministerial Decision No. 84 of 2025 requires them for businesses with revenue above AED 50,000,000 and for Qualifying Free Zone Persons. Separately, the Commercial Companies Law requires an LLC to have an auditor.

Related terms

Month-end close · Audited financial statements · Record retention · Balance sheet · Taxable income. See every term in the UAE tax glossary.

For the full picture, read our guide: Audit Requirements for UAE Companies Under Corporate Tax.

Work it out with our free Corporate Tax deadline calculator.

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