The chart of accounts is the least glamorous decision in setting up a business and one of the most consequential. Every adjustment your Corporate Tax computation requires depends on being able to identify transactions. If entertainment sits inside general expenses, someone has to go looking for it a year later.
Design for the adjustments you know are coming
Give a separate account to every category that will need separating at year end:
- Entertainment, kept apart from travel and marketing, because its deductibility differs
- Fines and penalties, which are not deductible
- Donations, split between qualifying public benefit entities and others
- Related party transactions, including management fees and shareholder recharges
- Interest expense, separated by counterparty, given the limitation rules
- Owner drawings, never mixed with business expenses
Separate VAT treatments in revenue
Split sales by VAT treatment rather than reporting one revenue line: standard-rated, zero-rated exports, exempt supplies and out of scope. Reconstructing this at return time from invoice descriptions is slow, error-prone, and the root of most misclassification.
Cost of sales for a trading business
Purchases, freight inward, customs duty, clearing charges and inventory adjustments belong in cost of sales, not overheads. Businesses that post freight and duty as expenses report a gross margin that is not real, then make pricing decisions on it.
Balance sheet accounts people forget
- Accrued leave and the end-of-service provision, tracked separately from salary
- VAT control accounts for input, output and the net payable
- A Corporate Tax provision account, so the liability is visible before it is due
- Director and related party loan accounts, one per counterparty
Keep it as small as it can be
A chart with 400 accounts is as useless as one with 20. Nobody codes consistently into it, so the analysis it was built for never happens. Add an account when a real decision or a real adjustment depends on seeing that number separately, and not otherwise.
See accounting and bookkeeping and the adjustments that catch businesses out.
General guidance, not advice on a specific business. Figures checked against published sources in September 2026; UAE rules change, so confirm current Ministry of Finance or FTA guidance, or ask us to review your position, before acting.