UAE accounting and tax glossary

The process of matching the bank account in the general ledger against the bank statement, so the book balance and the bank balance agree or every difference is explained. Regular reconciliation catches missing entries, duplicates, bank charges, and timing differences before they distort VAT returns or financial statements.

The structured list of every account a business posts to — assets, liabilities, equity, income, and expenses — usually organised with account codes. A well-designed chart makes VAT and Corporate Tax preparation easier, because taxable revenue, recoverable expenses, and adjustments already sit in their own accounts.

The UAE's federal tax on business profits, applying to financial years starting on or after 1 June 2023. The headline structure is 0% on taxable income up to AED 375,000 and 9% above that threshold, with separate rules for free zone persons and specific exemptions. Registration and filing run through EmaraTax; definitions vary by circumstance — verify with the FTA.

A document issued to reduce or cancel an invoice already issued — for returns, later-agreed discounts, or billing errors. Under UAE VAT, a registered supplier issues a tax credit note to adjust the output VAT previously charged, and both parties adjust their VAT accounting accordingly.

A fenced free zone with customs controls, listed by Cabinet Decision, that is treated as outside the UAE for certain VAT purposes. The treatment is narrower than many assume — it mainly affects the movement and supply of goods, while services generally follow normal VAT rules. Definitions vary by circumstance — verify with the FTA.

The accounting method in which every transaction is recorded twice — as a debit in one account and an equal credit in another — so the books always balance. It is the foundation for a trial balance, financial statements, and tax computations that can actually be traced and defended.

The Federal Tax Authority's online platform for tax registration, filing returns, making payments, and managing refunds and penalties. It replaced the FTA's earlier e-Services portal, and both VAT and Corporate Tax obligations are administered through it.

The identity card issued by the Federal Authority for Identity, Citizenship, Customs & Port Security (ICP) to UAE citizens and residents. It is commonly requested when verifying a business owner or authorised signatory, and its expiry date needs to stay current in the business record.

Supplies on which no VAT is charged and for which the supplier cannot recover the related input VAT — the key contrast with zero-rating. UAE examples commonly include certain financial services, subsequent supplies and leases of residential property, bare land, and local passenger transport. Definitions vary by circumstance — verify with the FTA.

The UAE federal body that administers VAT, Corporate Tax, and excise tax — handling registration, returns, refunds, audits, clarifications, and penalties. Its online portal is EmaraTax, and its published guides and public clarifications are the practical reference points for practitioners.

An economic zone in the UAE with its own licensing authority and regulations. For tax purposes, free zone status matters in two distinct ways: some zones are designated zones for VAT, and a free zone company may qualify as a Qualifying Free Zone Person for Corporate Tax — but neither follows automatically from holding a free zone licence. Verify each entity's position with the FTA.

The complete record of all accounts and postings for a business — every journal entry ultimately lands here. Financial statements, VAT returns, and Corporate Tax computations should all derive from the same general ledger, so the numbers reconcile with each other.

The VAT a registered business pays on its purchases and expenses. It is generally recoverable to the extent the costs relate to making taxable supplies; VAT on exempt activities and certain blocked categories is not recoverable. Recovery also depends on holding the supporting evidence required for the transaction.

The unit of recording in double-entry accounting: a dated set of debits and credits, with equal totals, that posts a transaction to the ledger. Everything from a sales invoice to a depreciation adjustment ultimately becomes a journal entry.

Know Your Customer and Anti-Money Laundering: checks used to identify a business and the people who own, control, or are authorised to act for it. The exact obligations depend on the regulated party and activity, but trade licences, identity records, and ownership information are common evidence requests.

A company's constitutional document, setting out its shareholders, share capital, activities, and management arrangements. It is commonly used to confirm ownership and who can act for the company; changes such as new shareholders or activities may require an amended MOA.

The VAT a registered business charges on its own taxable supplies of goods and services. It is collected from customers and declared on the VAT return; output VAT less recoverable input VAT is broadly what is payable to the FTA for the period.

Closing an accounting period so that entries cannot be silently posted or edited within it — typically once a VAT return is filed or accounts are finalised. If an error is found later, the correction should follow a controlled, documented process under the applicable accounting and tax rules.

A legal document authorising one person to act on behalf of another — for example, signing contracts, dealing with authorities, or handling bank matters. The scope, validity, and any notarisation requirements must be checked against the actual document and intended use.

A free zone entity that meets the Corporate Tax law's conditions — including maintaining adequate substance in the zone and earning qualifying income — and can therefore benefit from a 0% Corporate Tax rate on that qualifying income, with the 9% rate applying to other taxable income. The conditions are detailed and easy to fail. Definitions vary by circumstance — verify with the FTA.

A VAT mechanism where the recipient, rather than the supplier, accounts for the VAT on a supply. In the UAE it applies mainly to imports of goods and services from outside the state: the registered recipient self-accounts for output VAT on the import and, where entitled, recovers it as input VAT on the same return.

A Corporate Tax election that can allow an eligible resident taxable person to be treated as having no taxable income for a tax period when the revenue threshold and other conditions are met. Ministerial Decision No. 131 of 2026 extended the AED 3,000,000 threshold to qualifying tax periods ending on or before 31 December 2029. Eligibility, excluded persons, and the consequences of electing require case-by-case review.

The span of time a tax return covers. For UAE VAT, the FTA assigns each registrant a tax period — commonly quarterly, with monthly periods for some larger businesses — while for Corporate Tax the tax period is generally the entity's financial year.

Broadly, the person or entity that is subject to a tax and its obligations. The precise meaning differs by regime: for VAT it centres on persons who are registered or required to register, while for Corporate Tax it covers the resident and non-resident persons brought within the law's scope. Definitions vary by circumstance — verify with the FTA.

The licence issued by an emirate's economic department or a free zone authority that permits a business to carry on its stated activities. It is a core business and verification document, and its renewal date should be tracked with the supporting company records.

A listing of every ledger account with its debit or credit balance at a point in time. If total debits do not equal total credits, something is wrong in the books; when they do agree, the trial balance becomes the starting point for financial statements and tax computations.

The unique 15-digit number the FTA issues to a business on VAT registration. It must appear on tax invoices and tax credit notes, and checking a counterparty's TRN is a basic control before recovering input VAT on their invoices.

The natural person who ultimately owns or controls a company, directly or indirectly — commonly assessed against a 25% ownership or control threshold in UAE regulations. Beneficial-owner register duties apply to relevant UAE legal persons subject to the applicable rules and exemptions, and identifying UBOs is a common part of KYC/AML onboarding.

The UAE's tax on supplies of goods and services, in force since 1 January 2018 with a standard rate of 5%. Registered businesses charge output VAT, recover eligible input VAT, and pay the difference to the FTA. A supply can be standard-rated, zero-rated, exempt, or out of scope — and that classification drives the accounting.

The periodic declaration (Form VAT 201) filed through EmaraTax, summarising output VAT, input VAT, and the net amount payable or refundable for a tax period. Filing and payment are generally due within 28 days of the end of the tax period, and late filing or payment attracts penalties.

The UAE's electronic salary transfer system, operated through the Ministry of Human Resources and Emiratisation and the Central Bank, through which covered employers pay wages using approved channels. Applicability and procedures depend on the employer and relevant authority; some free zones have separate arrangements.

Supplies that are taxable at a 0% VAT rate: no VAT is charged to the customer, but the supplier can still recover related input VAT — the key difference from exemption. UAE examples commonly include exports of goods and services, international transport, the first supply of new residential buildings, and certain education and healthcare supplies. Definitions vary by circumstance — verify with the FTA.