1000–1999
Assets
What the business owns or is owed — cash and bank, trade receivables, inventory, prepaid expenses, VAT recoverable (input VAT), property, plant and equipment, and other non-current assets.
Bookkeeping guide · UAE
Chart of accounts for UAE businesses
A clear, IFRS-aligned chart of accounts is the foundation of clean books. This guide shows UAE businesses how to structure the five account classes and code them so your VAT 201 and Corporate Tax return fall out of the ledger.
What is a chart of accounts?
A chart of accounts (COA) is the organised list of every ledger account your business uses to record transactions. Each account has a name and a number and belongs to one of five classes — assets, liabilities, equity, income, and expenses. Every journal entry posts to accounts in the chart, and your financial statements are simply summaries of those accounts.
In the UAE, financial statements are prepared under IFRS (or IFRS for SMEs), so a well-built chart mirrors the way an IFRS balance sheet and income statement are laid out. Get the chart right at the start and everything downstream — reporting, VAT, Corporate Tax, and audit — gets easier. Get it wrong and you spend every period untangling misposted entries.
This guide walks through the five classes, how to code them so they are VAT and Corporate Tax-ready, sensible account numbering, and a sample structure you can adapt. For the wider picture, read our UAE bookkeeping guide.
The five account classes
Every account belongs to one of five classes. Assets, liabilities, and equity form the balance sheet; income and expenses form the income statement. Grouping accounts this way lets your trial balance roll straight up into IFRS statements.
2000–2999
Liabilities
What the business owes — trade payables, VAT payable (output VAT), Corporate Tax payable, accrued expenses, employee end-of-service provisions, and short- and long-term borrowings.
3000–3999
Equity
The owners' interest — share or partner capital, additional paid-in capital, retained earnings, and the current-period result carried into reserves.
4000–4999
Income
Revenue and other income — sales of goods and services, service fees, other operating income, and finance or investment income earned during the period.
5000–6999
Expenses
The cost of running the business — cost of sales, staff costs, rent, utilities, marketing, professional fees, depreciation, finance costs, and other operating expenses.
Coding it VAT and Corporate Tax-ready
The real value of a good chart of accounts in the UAE is that it makes your VAT 201 and Corporate Tax return fall out of the ledger instead of being rebuilt each period. Two habits make that possible.
Split by VAT treatment. Keep separate revenue accounts for standard-rated (5%), zero-rated, and exempt supplies, and keep dedicated control accounts for input VAT recoverable and output VAT payable. When the tax period closes, your return is a summary of accounts you already maintain — not a reclassification exercise.
Isolate Corporate Tax items. UAE Corporate Tax starts from accounting profit and applies adjustments, so keep disallowable expenses, provisions, depreciation, and related-party costs in their own accounts, and carry Corporate Tax payable as its own liability line. That keeps the move from accounting profit to taxable income clear and defensible.
Design principles
- Group accounts by the five IFRS classes so a trial balance rolls straight up into a balance sheet and income statement.
- Split revenue and purchases by VAT treatment — standard 5%, zero-rated, and exempt — so your VAT 201 is a by-product of the ledger, not a rebuild.
- Keep dedicated control accounts for input VAT recoverable, output VAT payable, and Corporate Tax payable rather than netting them into other lines.
- Leave numbering gaps between accounts so you can add new ledgers later without renumbering the whole chart.
- Map expenses to the categories the FTA and IFRS expect, so add-backs and disallowable items are easy to isolate at Corporate Tax time.
A sample chart of accounts
A common approach uses a four-digit scheme where the first digit marks the class. The example below is a starting point for a typical UAE business — leave gaps between numbers so you can insert new accounts later without renumbering the whole chart.
| Code | Account | Class |
|---|---|---|
| 1010 | Cash on hand | Assets |
| 1020 | Bank — current account | Assets |
| 1100 | Trade receivables | Assets |
| 1200 | Inventory | Assets |
| 1400 | Input VAT recoverable | Assets |
| 1500 | Property, plant & equipment | Assets |
| 2010 | Trade payables | Liabilities |
| 2200 | Output VAT payable | Liabilities |
| 2300 | Corporate Tax payable | Liabilities |
| 2400 | End-of-service provision | Liabilities |
| 3010 | Share / partner capital | Equity |
| 3200 | Retained earnings | Equity |
| 4010 | Revenue — standard-rated 5% | Income |
| 4020 | Revenue — zero-rated | Income |
| 4030 | Revenue — exempt | Income |
| 5010 | Cost of sales | Expenses |
| 6010 | Salaries & wages | Expenses |
| 6200 | Rent | Expenses |
| 6500 | Depreciation | Expenses |
| 6900 | Bank & finance charges | Expenses |
This is illustrative — the right chart depends on your industry and how you report. Once your structure follows IFRS and separates VAT and Corporate Tax items, your IFRS financial statements and returns come together far more quickly.
How AIMuhaseb helps
A chart of accounts that is ready on day one
AIMuhaseb ships with an IFRS-aligned, VAT and Corporate Tax-ready chart of accounts you can use as-is or tailor to your industry. Revenue is split by VAT treatment, input and output VAT sit in their own control accounts, and every entry flows through to IFRS statements, the VAT 201, and your Corporate Tax working papers automatically.
IFRS-aligned five-class structure
Revenue split by VAT treatment
Input & output VAT control accounts
Corporate Tax items kept separate
Want a structure built around your specific business? We will set one up for you — tell us about it through the form below. See also our guide to the best accounting software in the UAE.
FAQ
Chart of accounts questions, answered
What is a chart of accounts?
A chart of accounts (COA) is the organised list of every ledger account a business uses to record its transactions. Each account has a name and a number and belongs to one of five classes — assets, liabilities, equity, income, and expenses. The COA is the backbone of your bookkeeping: every journal entry posts to accounts in the chart, and your financial statements are built by summarising them.
How should a UAE chart of accounts be structured?
A practical UAE chart of accounts follows the five IFRS classes — assets, liabilities, equity, income, and expenses — because UAE financial statements are prepared under IFRS (or IFRS for SMEs). Within those classes, it should carry dedicated accounts for input VAT recoverable, output VAT payable, and Corporate Tax payable, and it should separate revenue by VAT treatment. That structure lets your trial balance flow directly into IFRS statements and your tax returns.
Why does the chart of accounts need to be VAT-ready?
Because your VAT 201 return is built from the ledger. If revenue and purchases are already split into standard-rated (5%), zero-rated, and exempt accounts, and input and output VAT sit in their own control accounts, the return becomes a summary of accounts you already keep. If they are mixed together, someone has to unpick every transaction each quarter — which is slow and error-prone.
How does the chart of accounts help with Corporate Tax?
UAE Corporate Tax starts from accounting profit and then applies adjustments. A well-designed chart of accounts isolates the items that need attention — disallowable expenses, provisions, depreciation, and related-party costs — in their own accounts, so the move from accounting profit to taxable income is clear and defensible. It also keeps Corporate Tax payable as its own liability line rather than buried in accruals.
What account numbering system should I use?
A common approach is a four-digit scheme where the first digit marks the class — 1 for assets, 2 for liabilities, 3 for equity, 4 for income, and 5 and 6 for expenses. Ranges are left with gaps so new accounts can be inserted without renumbering. The exact numbers matter less than being consistent and leaving room to grow.
Can AIMuhaseb set up a chart of accounts for my business?
Yes. AIMuhaseb ships with an IFRS-aligned, VAT and Corporate Tax-ready chart of accounts that you can use as-is or tailor to your industry. If you would like a structure built around your specific business, tell us about it through the enquiry form and a UAE specialist will help you set it up.
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Tell us about your business and we'll set up an IFRS-aligned, VAT and Corporate Tax-ready chart of accounts for you.