Accounting for trading companies in the UAE
A trading company lives on margin, and margin gets lost in freight, duty, exchange rates and slow stock. We keep the books, VAT, Corporate Tax and payroll, and show the owner what each product line really earns and how much money sits in the warehouse.
- Stock · marginBy product group
- Imports · exportsMatched to customs documents
- VAT · CT · payrollDeadlines covered
Trading businesses at every link of the chain
Importer and distributor
Goods arrive by container and go out to shops and wholesalers. Freight and customs duty have to land in the cost of each product, otherwise the margin in the books is higher than the real one.
Re-exporter
Goods come into the UAE and leave again for other markets. The 0% VAT rate on exports holds only when the export evidence is collected on time, and that is easy to lose track of.
Retail store or chain
Several shops, a warehouse, cash and card sales every day. The owner needs sales and margin by store, and stock in the books that matches the shelves.
Manufacturer selling for export
Raw materials in, finished goods out, part sold in the UAE and part abroad. Staff are paid through WPS, often with a bonus on top of base salary or in two payments a month.
General trading company
One licence, many product lines, suppliers paid in dollars, euros and yuan. Without a system nobody can say which lines make money and which only tie up cash.
Books that follow the goods
From the purchase to the VAT return: stock, margin and tax in one system.
- Monthly bookkeeping of purchases, sales and bank in every currency, with exchange differences recorded separately
- Cost of goods built from the supplier price, freight and customs duty, with margin by product group
- Stock counts reconciled to the books; slow-moving and damaged goods written down to what they can be sold for
- VAT registration and quarterly returns, including import VAT under the reverse charge and zero-rated exports
- Supplier checks in CoreLedger Verify, so input VAT on purchases is not denied
- Corporate Tax registration and the annual return
- Payroll through WPS, including bonus schemes and salaries paid in two parts a month
- Monthly owner's report: sales, margin, stock and amounts owed by customers
- Restoring neglected books, so overdue returns can be filed on a clean basis
What you see every month
A sample monthly summary for a distributor of household goods. The figures are illustrative.
| Product group | Purchased | Sold | Margin | Stock | Status |
|---|---|---|---|---|---|
| Small appliances | 380,000 | 520,000 | 24% | 610,000 | Stock normal |
| Phone accessories | 210,000 | 340,000 | 31% | 160,000 | Reorder: 3 weeks of stock |
| Kitchenware | 150,000 | 210,000 | 18% | 245,000 | Stock normal |
| Lighting | 0 | 60,000 | 12% | 340,000 | Slow-moving: 6 months of stock |
What a trading company should know about UAE tax
Import VAT through the return
A VAT-registered importer gives its TRN to customs and accounts for import VAT in its VAT return under the reverse charge. Customs duty is a separate cost: in most cases 5% of the CIF value.
Exports at 0%, with evidence
Goods exported outside the GCC are zero-rated if export evidence, such as customs exit documents, is obtained within 90 days. Without it, the zero rate does not apply.
Designated zones
Goods moving within or between designated zones can be outside the scope of VAT, but only when the conditions are met. We check each flow of goods before treating it that way.
Stock at the lower of cost and net realisable value
Under IFRS (IAS 2), stock is carried at cost or at what it can be sold for, whichever is lower. Regular stock counts show what is really on the shelves and what has to be written down.
Input VAT needs a valid tax invoice
VAT on purchases is recoverable only with a valid tax invoice from the supplier. For a trading company that is most of its input VAT, so we check suppliers in CoreLedger Verify before their invoices go into the return.
From a stock list to a clear margin
The price depends on volume, not on the industry
Monthly bookkeeping from AED 700; a full finance function with VAT and payroll from AED 2,000 a month. We quote an exact price after reviewing your books.
Questions trading companies ask
How is VAT on imported goods paid in the UAE?
A VAT-registered importer gives its TRN to customs and accounts for the 5% import VAT in its VAT return under the reverse charge. Customs duty is separate and in most cases is 5% of the CIF value. We match every customs declaration to the return.
Is VAT charged on exports from the UAE?
Goods exported outside the GCC are zero-rated, provided export evidence, such as customs exit documents, is obtained within 90 days. We keep the evidence on file for every export invoice, so the zero rate holds up if the FTA asks.
When does a trading company have to register for VAT?
Once taxable supplies over the last 12 months exceed AED 375,000, or are expected to within the next 30 days. Voluntary registration is possible from AED 187,500 and makes sense if you buy a lot from VAT-registered suppliers and want to recover the tax.
How should a trading company value its stock at year-end?
Under IFRS (IAS 2), at the lower of cost and net realisable value: the price the goods can be sold for, less the costs of selling them. Cost includes the purchase price, freight and duty; damaged goods and goods that no longer sell at that price are written down. A stock count at year-end, and ideally during the year, supports the figure.
Does a trading company pay Corporate Tax in the UAE?
Every company must register for Corporate Tax and file a return, even with no profit. Profit above AED 375,000 is taxed at 9%. Small Business Relief is available with revenue up to AED 3 million for tax periods ending on or before 31 December 2026. The test is revenue, not profit, so a low-margin trader can pass it quickly. We prepare the return as part of our tax service.
Our books are a year behind. Can you restore them?
Yes. We rebuild the books from bank statements, sales and purchase invoices and customs documents, reconcile stock and balances, and then the overdue VAT and Corporate Tax returns can be filed on a clean basis. Records have to be kept for at least 7 years, so from then on everything is kept in one system.
How much does accounting cost for a trading company?
It depends on the number of transactions a month, not on the industry: from AED 700 for monthly bookkeeping, from AED 2,000 for a full finance function with VAT and payroll. We count the real volume of purchases, sales and payments before we start so the price holds from the first month.