A UAE chart of accounts needs: assets (current + fixed), liabilities (including VAT payable and GPSSA payable), equity, revenue (split by VAT treatment: standard, zero-rated, exempt), and expenses (with blocked input VAT categories clearly separated). Standard numeric coding: 1xxx assets, 2xxx liabilities, 3xxx equity, 4xxx revenue, 5xxx cost of sales, 6xxx operating expenses.
Standard UAE chart of accounts structure
| Range | Category | Key UAE-specific accounts |
|---|---|---|
| 1000–1099 | Cash and bank | Cash on hand, UAE bank accounts (one per bank), petty cash |
| 1100–1299 | Accounts receivable | Trade debtors, VAT recoverable, prepayments |
| 1300–1499 | Inventory | Trading stock, raw materials, WIP |
| 1500–1799 | Fixed assets | Computers, vehicles, furniture, leasehold improvements |
| 1800–1899 | Accumulated depreciation | Contra accounts per asset class |
| 2000–2099 | Accounts payable | Trade creditors, accrued expenses |
| 2100–2199 | VAT accounts | Output VAT payable, input VAT recoverable |
| 2200–2299 | Payroll liabilities | Salaries payable, GPSSA payable, WPS clearing |
| 2300–2499 | Loans and finance | Bank loans, director loans, lease liabilities |
| 3000–3999 | Equity | Share capital, retained earnings, owner drawings |
| 4000–4499 | Revenue | Consultancy, product sales, rental income (split by VAT type) |
| 4500–4699 | Zero-rated revenue | Export sales, international services |
| 4700–4899 | Exempt revenue | Bare land rentals, certain financial services |
| 5000–5999 | Cost of sales | Direct costs attributable to revenue |
| 6000–6499 | Staff costs | Salaries, GPSSA contributions, gratuity provision, leave accrual |
| 6500–6699 | Office expenses | Rent, utilities, communications |
| 6700–6899 | Professional fees | Audit, legal, accounting (input VAT reclaimable) |
| 6900–6999 | Blocked expenses | Entertainment, personal vehicle — input VAT not reclaimable |
VAT-specific account setup
Two VAT accounts are essential in any UAE chart of accounts:
- Output VAT payable (e.g., 2100): Credited every time you issue a tax invoice. Balance = total VAT collected from customers in the period. This is a liability — you owe this to the FTA.
- Input VAT recoverable (e.g., 2110): Debited every time you receive a tax invoice from a supplier and the expense is VAT-reclaimable. Balance = total input VAT claimable. This offsets output VAT.
- VAT clearing / suspense (optional, e.g., 2120): Used to hold VAT during the period before filing. Some businesses use a single net VAT account; others prefer to split input and output for easier reconciliation.
Create distinct expense account codes for entertainment and personal vehicle costs (e.g., 6900–6999). When input VAT is posted to these accounts, mark it as non-reclaimable. This makes the blocked input VAT visible at return time and prevents accidental inclusion in your input tax claim.
Payroll-specific accounts for UAE
- Salaries expense (6000): Gross salary for all employees — the WPS-processed amount.
- GPSSA employer contribution expense (6010): 12.5% employer contribution for UAE/GCC nationals (charged to P&L).
- GPSSA payable (2210): GPSSA due but not yet remitted (liability until paid by 15th of following month).
- Gratuity provision (2220): Monthly accrual for end-of-service gratuity for all employees. Debit: gratuity expense; Credit: gratuity provision liability.
- Leave accrual (2230): Monthly accrual for annual leave earned but not yet taken.
- WPS clearing account (2240): Used when payroll is processed — debit salaries payable, credit WPS clearing; when bank debits, debit WPS clearing, credit bank.
Need your UAE chart of accounts set up correctly from day one?
We configure your accounting software with a UAE-compliant chart of accounts including VAT codes, payroll accounts, and asset classes. One-off setup, then monthly bookkeeping.
Frequently asked questions
What is a chart of accounts and why do UAE businesses need one?+
A chart of accounts is the structured list of all accounts used in a business’s general ledger. UAE businesses need one because Corporate Tax and VAT returns require financial statements prepared from properly organised accounting records — and auditors require a coherent account structure when reviewing financial statements.
How should UAE businesses split revenue in the chart of accounts?+
Revenue should be split by VAT treatment: standard-rated (5%), zero-rated (0% — exports, international services), and exempt (no VAT). This split makes the VAT return straightforward — each revenue type feeds directly into the relevant box in the EmaraTax return.
Should UAE businesses use a UAE-specific chart of accounts template?+
Most UAE accounting software (Zoho Books, QuickBooks UAE, Xero) includes UAE-localised chart of accounts templates with VAT codes pre-mapped. These are a good starting point, but businesses with GPSSA obligations or significant fixed assets may need to customise the payroll and asset sections.
How do you account for gratuity in UAE bookkeeping?+
Monthly accrual: debit gratuity expense (P&L), credit gratuity provision (balance sheet liability). The amount is calculated as 1/12 of the annual entitlement (21 days basic salary per year for years 1–5). When an employee leaves and is paid gratuity, debit the provision and credit bank.
What accounting codes do UAE businesses use for VAT?+
Common practice: Output VAT payable in the 2100 range (liability), Input VAT recoverable in the 2110 range (receivable offset). Some businesses use a net VAT account; others split input and output. The key is that each VAT return box maps to a specific account or combination of accounts for easy reconciliation.