A chart of accounts is the numbered list of every account your business posts transactions to, grouped into five types: assets, liabilities, equity, income and expenses. A UAE small business needs accounts that generic US and UK templates leave out: VAT input and output accounts that feed the VAT201 return, corporate tax expense and payable, an end-of-service gratuity provision, leave and air ticket accruals, salaries payable for WPS, a shareholder current account, post-dated cheque accounts and customer advances. This guide gives a sample chart of 57 accounts for a service business, notes what a trading business adds, maps the accounts to the VAT return and the corporate tax financial statements, and ends with three journal entries that balance. It is general information, not accounting or tax advice; have your accountant review the chart before you post to it.
What are the five account types and how are they numbered?
The first three types make up the balance sheet: what the business owns, what it owes, and what is left for the owners. The last two make up the profit and loss statement.
| Range | Type | Statement | Normal balance |
|---|---|---|---|
| 1000–1999 | Assets | Balance sheet | Debit |
| 2000–2999 | Liabilities | Balance sheet | Credit |
| 3000–3999 | Equity | Balance sheet | Credit |
| 4000–4999 | Income | Profit and loss | Credit |
| 5000–5099 | Cost of sales | Profit and loss | Debit |
| 5100–5999 | Operating expenses, other expenses and tax | Profit and loss | Debit |
The numbers are a convention, not a legal requirement. Leave gaps of 10 between accounts so you can insert new ones later without renumbering.
Which accounts does a UAE business need that generic templates miss?
| Account | Why it exists in the UAE |
|---|---|
| VAT input recoverable, VAT output payable, VAT reverse charge, VAT control | VAT at 5% is not income or expense for a registered business. Separate accounts let the VAT201 boxes be read from the ledger. |
| Corporate tax expense and corporate tax payable | Corporate tax is 0% on taxable income up to AED 375,000 and 9% above it. The charge is an expense, and a liability until paid. |
| End-of-service gratuity provision | Gratuity is 21 days' basic salary per year for the first five years and 30 days per year after that. The cost builds up monthly, long before it is paid. |
| Leave salary and air ticket accruals | Employees earn 30 days of paid annual leave per year, and many contracts include a flight home. Both are owed before they are taken. |
| Salaries payable (WPS) | Payroll is expensed in the month worked and paid through the Wage Protection System the following month. |
| Shareholder current account | In many UAE LLCs the owner pays business costs personally and draws money informally. One account tracks the running balance between owner and company. |
| PDC receivable and PDC payable | Post-dated cheques are common for rent and trade credit. A cheque in the drawer is not yet cash in the bank. |
| Customer advances and deposits | An advance is a liability until the work is done, and receiving it is a VAT tax point. |
| Foreign exchange gain or loss | The dirham is pegged to the US dollar at AED 3.6725, so USD invoices move little, but bank and processor rates differ from the peg, and EUR or GBP invoices move freely. |
| Payment processor clearing | Stripe pays out net of fees, days later. A clearing account holds the gross charge until the payout lands. See Stripe payments, fees and payouts in UAE accounting. |
| Trade licence, visa and Ejari costs | Recurring government and tenancy costs that deserve their own lines. |
Threshold: VAT registration is mandatory once taxable supplies pass AED 375,000 in 12 months, and voluntary from AED 187,500. If you are not registered yet, keep the VAT accounts in the chart and leave them empty. See UAE VAT registration for small businesses.
Sample chart of accounts for a UAE service business
This chart suits a consultancy, agency or IT firm with a few employees. Rename accounts to match your wording and delete what you do not use.
Assets (1000–1999)
| No. | Account | What goes here |
|---|---|---|
| 1000 | Petty cash | Small cash float kept in the office |
| 1010 | Bank: AED current account | One ledger account per real bank account, including any USD account |
| 1030 | Stripe clearing | Card payments received by Stripe and not yet paid out |
| 1100 | Accounts receivable | Invoices issued and not yet paid |
| 1110 | PDC receivable | Customer post-dated cheques held until their date |
| 1120 | Employee advances and loans | Salary advances to be recovered from payroll |
| 1130 | Prepaid expenses | Rent, licence, insurance and visa costs paid ahead, released monthly |
| 1140 | Refundable deposits | Tenancy security deposit, utility deposits, labour guarantees |
| 1200 | VAT input recoverable | VAT on purchases that you can reclaim |
| 1500 | Computers and equipment | Laptops, servers, phones above your capitalisation limit |
| 1510 | Furniture and fit-out | Desks, chairs, office fit-out |
| 1590 | Accumulated depreciation | Running total of depreciation charged on 1500–1510 |
Liabilities (2000–2999)
| No. | Account | What goes here |
|---|---|---|
| 2000 | Accounts payable | Supplier bills received and not yet paid |
| 2010 | PDC payable | Post-dated cheques you issued, until they clear |
| 2020 | Company credit card | Card balance owed to the bank |
| 2100 | VAT output payable | VAT charged on your sales |
| 2110 | VAT reverse charge | Output VAT you self-account for on services bought from abroad |
| 2120 | VAT control | Net VAT for the period, owed to or refundable from the FTA |
| 2130 | Corporate tax payable | Corporate tax charged for the year and not yet paid |
| 2200 | Salaries payable (WPS) | Net salaries earned this month, paid through WPS next month |
| 2210 | Leave salary accrual | Value of annual leave earned and not yet taken |
| 2220 | Air ticket accrual | Contractual flight allowances earned and not yet used |
| 2230 | Accrued expenses | Costs incurred with no bill yet, such as audit fees |
| 2300 | Customer advances and deposits | Money received before the work is delivered |
| 2400 | Shareholder current account | Company costs paid by the owner, less money the owner took out |
| 2500 | End-of-service gratuity provision | Gratuity earned by employees to date |
| 2600 | Loans payable | Bank or shareholder loans with agreed repayment terms |
A debit balance on 2400 means the owner owes the company. Clear it, because lenders and auditors will ask about it.
Equity (3000–3999)
| No. | Account | What goes here |
|---|---|---|
| 3000 | Share capital | Capital stated in the memorandum of association |
| 3100 | Retained earnings | Profits of earlier years kept in the business |
| 3200 | Dividends or owner drawings | Profit distributions; sole establishments use drawings |
Income (4000–4999)
| No. | Account | What goes here |
|---|---|---|
| 4000 | Service revenue: standard-rated | Sales with 5% VAT |
| 4010 | Service revenue: zero-rated | Exported services and other 0% sales |
| 4100 | Discounts given | Discounts and credit notes, kept apart so gross sales stay visible |
| 4900 | Other income | Interest and anything else outside normal trading |
Cost of sales (5000–5099)
| No. | Account | What goes here |
|---|---|---|
| 5000 | Subcontractors and freelancers | Outside labour used to deliver client work |
| 5010 | Direct project costs | Software, media, printing or materials bought for a specific job |
| 5020 | Payment processing fees | Stripe and card gateway fees |
Operating expenses, other expenses and tax (5100–5999)
| No. | Account | What goes here |
|---|---|---|
| 5100 | Salaries and wages | Basic salary and allowances |
| 5110 | End-of-service gratuity expense | Monthly gratuity accrual |
| 5120 | Leave salary and air tickets | Monthly leave and ticket accruals |
| 5130 | Visa and Emirates ID costs | Residence visas, labour cards, medical tests, Emirates ID |
| 5140 | Staff medical insurance | Health insurance premiums |
| 5200 | Office rent | Rent under the tenancy contract, plus Ejari registration |
| 5210 | Utilities and internet | Electricity, water, cooling, telecoms |
| 5220 | Trade licence and government fees | Licence renewal, establishment card, chamber fees |
| 5300 | Software and subscriptions | SaaS tools, hosting, domains |
| 5310 | Marketing and advertising | Ads, events, content, sponsorship |
| 5320 | Professional fees | Accountant, auditor, tax agent, lawyer |
| 5330 | Travel | Flights, hotels and transport for business trips |
| 5340 | Client entertainment | Client meals and hospitality |
| 5350 | Office supplies | Stationery, pantry, small equipment |
| 5400 | Bank charges and interest | Account fees, transfer fees, loan and card interest |
| 5500 | Depreciation | Monthly depreciation on fixed assets |
| 5600 | Bad debts | Invoices written off as uncollectable |
| 5700 | Fines and penalties | Traffic fines, FTA penalties, municipality fines |
| 5800 | Foreign exchange gain or loss | Differences between invoice-date and payment-date rates |
| 5900 | Corporate tax expense | The year's corporate tax charge |
That is 57 accounts. Two lines are separate for tax reasons. Input VAT on entertaining non-employees is not recoverable, and corporate tax generally allows only 50% of client entertainment as a deduction, so 5340 stays apart from travel and staff costs. Fines and penalties are generally not deductible, so 5700 keeps them out of other lines.
What does a trading business add?
| No. | Account | What goes here |
|---|---|---|
| 1300 | Inventory | Cost of goods held for sale, including duty and freight to bring them in |
| 4030 | Product sales | Sales of goods, split by VAT rate if you sell both 5% and 0% |
| 5030 | Cost of goods sold | Cost of the items sold in the period |
| 5040 | Freight and customs duty | Inbound shipping, clearance fees and duty, where you do not add them to inventory cost |
Customs duty under the GCC common tariff is generally 5% of the CIF value (cost, insurance and freight) for most goods, with higher rates on items such as alcohol and tobacco. Duty is a cost of the goods. Import VAT is different: a VAT-registered importer normally accounts for it through the VAT return, not as a cost.
How many accounts is too many?
A small service business rarely needs more than 60 to 80 accounts. Add an account when you need the number on its own for a tax return, a lender or a decision. If three accounts are always read together, merge them. Clients, projects and departments belong in tags or sub-ledgers, not in new account numbers such as "Revenue: Client A".
Which chart of accounts mistakes cause the most rework?
- Mixing personal spending into expenses. Personal costs on the company card go to the shareholder current account (2400), not to travel or meals.
- One "miscellaneous" bucket. Use an "uncategorised" account only as a holding place and clear it monthly. The habits in how to track business expenses in the GCC help here.
- VAT posted to expenses. Recording a AED 2,100 bill as a AED 2,100 expense overstates costs and loses AED 100 of recoverable VAT. Post the net to the expense and the VAT to 1200.
- One ledger account for several banks. Each bank account, card and processor balance needs its own ledger account, or none of them reconciles to a statement.
- No staff accruals. Without gratuity and leave accruals, profit looks higher every month and drops when someone resigns.
How does the chart map to the VAT201 return?
| Ledger source | VAT201 box |
|---|---|
| 4000 sales and the VAT credited to 2100 | Box 1: standard-rated supplies, reported by emirate |
| 2110 VAT reverse charge and the value of imported services | Box 3: supplies subject to the reverse charge provisions |
| 4010 zero-rated sales | Box 4: zero-rated supplies |
| Imports of goods declared through customs (trading businesses) | Box 6: goods imported into the UAE |
| Net purchases with recoverable VAT, and the VAT debited to 1200 | Box 9: standard-rated expenses |
| Recoverable input VAT on reverse-charge purchases | Box 10: supplies subject to the reverse charge provisions |
| Closing balance of 2120 VAT control | Box 14: payable tax for the period |
At the end of each tax period, transfer the balances of 2100, 2110 and 1200 into 2120. The result should equal Box 14, and paying the FTA brings 2120 back to zero.
Deadline: The VAT return and payment are due by the 28th day of the month after the tax period ends. Most small businesses file quarterly.
How does the chart map to corporate tax and the financial statements?
The corporate tax return starts from the accounting profit in your financial statements and adjusts it. Under Ministerial Decision No. 114 of 2023, taxable persons prepare financial statements under IFRS. A business with revenue of AED 50 million or less may apply IFRS for SMEs, and a business with revenue of AED 3 million or less may use the cash basis of accounting. Audited financial statements are required where revenue exceeds AED 50 million, for Qualifying Free Zone Persons and, for financial years starting on or after 1 January 2025, for tax groups (Ministerial Decision No. 84 of 2025). Free zone authorities and banks may ask for an audit regardless.
Deadline: The corporate tax return and payment are due within nine months of the end of the tax period: 30 September 2026 for a 2025 calendar year. Keep the supporting records for seven years.
Accounts 5340, 5700 and 5900 exist so the usual adjustments can be read off the trial balance. Registration, Small Business Relief and filing steps are in UAE corporate tax registration and filing for small businesses.
When should you change the chart?
Change it when you register for VAT, hire your first employee, open a new bank account or card processor, start selling goods, or add a branch. Add accounts at any time. Merge or renumber only at year end, because mid-year changes break comparatives, and mark unused accounts inactive instead of deleting them.
Three sample journal entries that balance
1. Sale of AED 10,000 plus 5% VAT, invoiced on credit. VAT is 10,000 × 5% = AED 500, so the invoice total is AED 10,500.
| Account | Debit (AED) | Credit (AED) |
|---|---|---|
| 1100 Accounts receivable | 10,500.00 | |
| 4000 Service revenue: standard-rated | 10,000.00 | |
| 2100 VAT output payable | 500.00 | |
| Total | 10,500.00 | 10,500.00 |
2. Software bill of AED 2,100 including VAT, paid from the bank. Net is 2,100 ÷ 1.05 = AED 2,000 and VAT is AED 100.
| Account | Debit (AED) | Credit (AED) |
|---|---|---|
| 5300 Software and subscriptions | 2,000.00 | |
| 1200 VAT input recoverable | 100.00 | |
| 1010 Bank: AED current account | 2,100.00 | |
| Total | 2,100.00 | 2,100.00 |
3. Monthly gratuity accrual for one employee on a basic salary of AED 9,000, in the first five years. Daily basic is 9,000 ÷ 30 = AED 300. One year earns 21 × 300 = AED 6,300, so one month is 6,300 ÷ 12 = AED 525.
| Account | Debit (AED) | Credit (AED) |
|---|---|---|
| 5110 End-of-service gratuity expense | 525.00 | |
| 2500 End-of-service gratuity provision | 525.00 | |
| Total | 525.00 | 525.00 |
Gratuity is only payable after one year of continuous service. Many businesses accrue from the first month and reverse the balance if the employee leaves earlier. The full rules are in end-of-service gratuity in the UAE: how to calculate it.
From the platform: In Staks, every new organisation starts with a ready chart of accounts across all five types. You can add accounts and sub-accounts, give each an account code, rename them, mark them inactive and enter opening balances. Accounts that Staks posts to automatically, such as Accounts Receivable, Accounts Payable, Tax Payable and Sales, cannot be deleted. Invoices, credit notes, expenses, bills and payroll post their own journal entries. The Journal links each entry to its source document and accepts manual journals for accruals like the gratuity entry above. Trial balance, profit and loss, balance sheet and account transactions reports read from the same ledger. The default chart is general, so you add UAE-specific accounts such as a gratuity provision or PDC accounts yourself. Accounting and reports are on the Growth plan ($49 per month); payroll is on Scale ($99 per month). Staks does not submit WPS files or file returns with the FTA.
Frequently asked questions
Is there an official chart of accounts in the UAE?
No. Neither the FTA nor the Ministry of Finance prescribes one. Your records must support your VAT returns and produce financial statements under IFRS or IFRS for SMEs for corporate tax. Any numbering that achieves that works.
Do I need separate VAT input and output accounts, or is one VAT account enough?
One account works arithmetically, and some software uses a single tax account. Separate accounts make the VAT201 return easier to check, because Box 1 VAT and Box 9 VAT each agree to one ledger balance. If your software uses one account, use its tax report instead.
Where do I record money I take out of my own company?
In an LLC, use the shareholder current account for informal withdrawals and costs you paid personally, and record a dividend when profit is formally distributed. A sole establishment uses owner drawings. Never record withdrawals as an expense.
Should a freelancer or one-person company use this whole chart?
No. Start with about 25 accounts: bank, receivables, the VAT accounts, owner current account, revenue and 10 to 12 expense lines. Add the payroll, gratuity and leave accounts with your first hire.
Related reading
- UAE VAT registration for small businesses
- UAE corporate tax registration and filing for small businesses
- End-of-service gratuity in the UAE: how to calculate it
- The best accounting software in the UAE
Set the chart up once, with the UAE accounts in place, and VAT returns, payroll accruals and the year-end corporate tax return all read from the same ledger. Start a 14-day free trial of Staks to begin with a ready chart of accounts and books that post from your invoices, expenses and bills.