Pricing Yourself Right: How Accountants Help Freelancers & Contractors Charge What They’re Worth

A Complete Guide by Direct Assist – Chartered Certified Accountants

Published: 14 January 2026

With the introduction of UAE Corporate Tax under Federal Decree-Law No. 47 of 2022, bookkeeping is no longer just an administrative task — it’s a compliance requirement.

Whether you’re a mainland company, free zone entity, or a natural person conducting business in the UAE, accurate and well-structured financial records are essential to calculate corporate tax correctly, support deductions, and avoid penalties.

At Direct Assist Accountants, we help businesses stay compliant while keeping their accounting practical and tax-efficient. This guide explains the core bookkeeping principles every UAE business must follow under the Corporate Tax regime.

1. Why Bookkeeping Matters Under UAE Corporate Tax

UAE Corporate Tax is a direct tax on net profits, meaning your tax position depends entirely on the quality of your accounting records.

Proper bookkeeping helps you to:

• Calculate taxable income accurately

• Claim allowable deductions with confidence

• Avoid overpaying or underpaying tax

• Prepare for audits by the Federal Tax Authority (FTA)

• Maintain credibility with banks, investors, and regulators

In short: no clean books = higher risk.

2. Core Bookkeeping Principles for Corporate Tax

• Before creating new tax-related accounts, businesses should understand two fundamental rules:

  ✔ Expenses Must Be “Wholly and Exclusively” for Business

  Only expenses incurred entirely for business purposes are deductible for corporate tax.

  ✔ Mixed-Use Expenses Must Be Apportioned

  If an expense is partly business and partly personal, only the business-related portion can be claimed.

  Clear documentation and sensible allocation policies are essential here.

3. Non-Deductible Expenses You Must Track Separately

Certain expenses are specifically disallowed under UAE Corporate Tax and should be recorded separately to avoid errors in tax calculations.

Common non-deductible expenses include:

• Donations, grants, or gifts made to non-qualifying entities

• Fines and penalties (unless paid as contractual compensation)

• Dividends or profit distributions to owners

• Personal withdrawals or drawings

• Recoverable input VAT

• Foreign income taxes

• Expenses related to exempt income

• Corporate tax itself

💡 Best practice: Use dedicated non-deductible expense accounts to keep your tax computation clean and transparent.

4. Record Retention Requirements

5. Designing a Corporate Tax-Friendly Chart of Accounts

• To comply with UAE Corporate Tax, businesses should update their chart of accounts to clearly separate deductible and non-deductible items.

  Below are key accounts we recommend setting up.

1️⃣ Corporate Tax Expense & Liability

Recommended accounts:

• Corporate Tax Expense

• Provision for Corporate Tax

Why this matters:
Corporate tax must be recognised in the correct accounting period — regardless of when it is actually paid.