Intercompany accounting

Where this shows up for a UAE group

A foreign parent setting up in the UAE often ends up with a mainland holding company sitting over one or more free zone operating entities, or a growing trading business adds a second licence in a different free zone, DMCC alongside JAFZA, or RAKEZ alongside IFZA, as it expands. Each entity keeps its own books under its own licence, but somebody at group level still needs one combined picture of the whole thing.

The same chart of accounts, applied consistently

One chart of accounts structure gets mapped across every related entity, so a management fee charged down from the holding company, a loan between two group entities, or a shared cost split between a mainland office and a free zone operating unit lands the same way on both sides of the entry, rather than being reconciled by hand once a year under pressure.

Not counting the group's own money twice

Consolidated reporting strips out intercompany sales, charges and loan balances before revenue and cost reach the group total, so the same dirham moving between two entities that own each other never counts twice in the combined figures.

Each entity still stands on its own for Corporate Tax

Underneath the consolidated view, every entity works out its own Corporate Tax position, including whether a free zone entity's income still qualifies for the 0% rate on Qualifying Income once intercompany transactions are counted. An intercompany charge that is not priced and documented properly draws more scrutiny here than an ordinary third-party bill would.

Translating up to a parent abroad

Where the ultimate owner sits outside the UAE, the consolidated dirham figures get translated at whatever rate the parent's own reporting calls for, using the same process as multi-currency bookkeeping rather than running currency conversion twice. Talk to us early if the group is still deciding whether a new UAE entity should sit as its own licence or as a branch of an existing one.