Year-end close checklist for FY2026: closing 31 December

For companies with a calendar financial year, FY2026 ends on Thursday 31 December 2026. The FY2026 corporate tax return and payment are due by 30 September 2027, which appears generous until the audit, the group reporting timetable and lender deadlines are laid over it. A controlled close starts in October, and a few tasks can only be done on the day itself. This year-end close checklist is organised in that order: before, on and after 31 December.

Year-end close: before 31 December

Set the timetable and engage the auditor

Agree who does what and by when: the finance team, the accountants and, where required, the auditor. Where a foreign parent sets a group reporting deadline, or a lender requires accounts by a set date, the local timetable works back from that date. For corporate tax, audited financial statements are required where revenue exceeds AED 50 million, for every Qualifying Free Zone Person and for every tax group (Ministerial Decision No. 84 of 2025). Company law separately requires every limited liability company (LLC) and joint stock company to have its accounts audited every year (Federal Decree-Law No. 32 of 2021, Art. 27(1)), and many free zones set their own audit and filing requirements. Where an audit applies, book it early.

Keep the VAT returns current

The close is far simpler if every VAT return was reconciled to the ledger when it was filed. Returns and payment are due by the 28th day after each period ends:

Clean up the balance sheet early

Clear suspense accounts, pursue old receivables, query supplier balances that look wrong, and bring the fixed-asset register up to date for the year's additions and disposals. In a group, agree intercompany balances at the end of November so that only December's movements remain to settle. Each of these jobs is quicker in November than in February.

Claim old credit balances

Check each entity's account on EmaraTax, the Federal Tax Authority's (FTA's) online portal, for credit balances more than 5 years old. Under a transitional rule in Federal Decree-Law No. 17 of 2025, a refund or offset can still be claimed if the application is made by 31 December 2026.

Plan for e-invoicing if it applies

Where revenue is AED 50 million or more, an e-invoicing Accredited Service Provider (ASP) must be appointed by 30 October 2026, and e-invoicing goes live on 1 January 2027, the first day of FY2027. Plan the invoice cut-off so December invoices go out under the old process and January invoices under the new one. The same people are usually needed for both projects. See what your bookkeeping must change for e-invoicing.

On 31 December

Cut-off comes first. Record the last sales invoice, delivery note and goods received note of the year. Sales and purchases must land in the year they belong to, which is not always the year printed on the invoice.

Then the stock count. Count inventory and record quantities and values; year-end stock counts are part of the records the tax rules require (Cabinet Decision No. 74 of 2023, Art. 2). Count on 31 December where possible. If the count takes place on another day, record the movements in between so the result reflects the year-end position, and note damaged and slow-moving items during the count.

Finally, cash and statements. Count petty cash, and obtain statements dated 31 December for every bank, card and loan account, including dormant ones.

After 31 December

1. Bank reconciliations. A bank reconciliation matches every transaction in the books to the bank statement and explains every difference. Reconcile every account to 31 December, and clear old unmatched items rather than carrying them forward.
2. Accruals and prepayments. Accrue FY2026 costs not yet invoiced, such as utilities, professional fees and bonuses. Defer costs paid in advance for FY2027, such as rent and insurance. That is the core of accrual accounting: income and costs in the year they belong to.
3. Receivables and payables. Review aged receivables and decide which balances will not be collected. Reconcile the main supplier statements to the payables ledger.
4. Intercompany. Agree balances with each group company at 31 December and resolve differences before the auditors arrive, because the same mismatch will otherwise surface twice, once in each entity's file.
5. Gratuity. Recalculate each employee's end-of-service gratuity on their basic wage at 31 December and their service to date. A pay rise during the year reprices the provision for all past service. See how to calculate and accrue gratuity.
6. Fixed assets. Record additions and disposals, run depreciation and check the register against what is physically there. Fixed-asset records are on the list of records a business must keep.
7. VAT. Reconcile the VAT accounts in the ledger to the returns filed for the year, and prepare the return due on 28 January 2027. Check input VAT claimed from 1 October against the new supplier-check and employee-expense rules.
8. Corporate tax. Estimate the FY2026 tax: 0% on taxable income up to AED 375,000 and 9% above it. Check whether Small Business Relief applies; it now covers tax periods ending on or before 31 December 2029, where revenue does not exceed AED 3 million in the period and every previous one. List transactions with related parties and connected persons, which must be at arm's length (the terms unrelated parties would agree) or market value. corporatetax.ebs.ae covers the detail.
9. Trial balance and draft accounts. A trial balance lists every account with its balance at the year-end; total debits must equal total credits. From it come the draft financial statements: profit and loss account, balance sheet, cash flow statement and notes.

The file the auditor will ask for

• the trial balance and draft financial statements;
• bank statements and reconciliations for every account at 31 December;
• stock count sheets and the inventory valuation;
• the fixed-asset register, with additions and disposals;
• aged receivables and payables, and supplier statement reconciliations;
• intercompany balance confirmations, where the company is part of a group;
• the gratuity calculation by employee;
• the year's VAT returns and their reconciliation to the ledger;
• loan agreements, leases and major contracts;
• the trade licence, memorandum of association and shareholder details.

Keep the file, and the records behind it, for at least 7 years after the end of the tax period (Federal Decree-Law No. 47 of 2022, Art. 56).

Dates to note

The calendar has the full list.

How ebs can help

ebs Chartered Accountants prepares year-end accounts based on IFRS (International Financial Reporting Standards) and the audit-ready file your auditor needs, so the audit is a review rather than a rescue. Where the books are behind, backlog accounting comes first. Every fixed monthly package includes VAT return submission and corporate tax report and filing; see pricing, or contact us for a free first consultation.

This article is general information as at 30 September 2026, not advice on your specific circumstances. Rules change; check the current position before acting.