Reference
The terms, defined plainly
Turnover rent, breakpoints, QFZP status, de minimis, reverse charge, prime cost, lock-up — the vocabulary of UAE accounting and retail leases, without the circularity.
36 terms
Accounting, tax and retail leases
Linked
Each to where it is dealt with
Plain
Definitions, not restatements
The terms that come up most often in UAE accounting, retail leases and tax — defined plainly, each linked to where it is dealt with properly.
| Term | What it means | More |
|---|---|---|
| Arm's length principle | The requirement that transactions between related parties are priced as they would be between independent parties. | → |
| Blocked input tax | VAT that cannot be recovered — notably on entertainment for non-employees and on motor vehicles available for personal use. | → |
| Breakpoint | The level of sales above which turnover rent becomes payable. A 'natural' breakpoint equals base rent divided by the turnover percentage; a negotiated breakpoint can sit anywhere. | → |
| Connected person | An owner, director or officer of a business, or a related party of one. Payments to connected persons are deductible only up to market value for services actually provided. | → |
| Consignment stock | Goods held by a retailer but owned by the supplier until sold. Not the retailer's inventory and not a purchase on receipt. | → |
| Contract asset | Work performed but not yet billed, where the entitlement to payment is conditional on something other than the passage of time. | → |
| Corporate Tax | The UAE federal tax on business profits under Federal Decree-Law No. 47 of 2022 — 0% on taxable income up to AED 375,000 and 9% above. | → |
| De minimis requirement | The limit on how much non-qualifying revenue a Qualifying Free Zone Person may earn before losing that status, tested against both a percentage of revenue and an absolute cap. | → |
| End-of-service gratuity | The statutory terminal benefit accruing to most private-sector employees, based on basic salary and length of continuous service. Should be accrued monthly, not recognised on departure. | → |
| Gross turnover | The sales figure a lease uses to calculate turnover rent. Defined by the lease itself, and not necessarily the same as accounting revenue or taxable supplies. | → |
| IFRS 15 | The revenue standard. Revenue is recognised when control of goods or services transfers, at the amount the entity expects to be entitled to. | → |
| IFRS 16 | The lease accounting standard. Fixed lease payments are capitalised as a liability and right-of-use asset; variable payments based on sales are expensed as the sales occur. | → |
| IFRS for SMEs | A reduced-disclosure reporting framework available to entities within the prescribed revenue threshold for UAE Corporate Tax purposes. | → |
| Input tax | VAT incurred on business purchases, recoverable against output tax where a valid tax invoice is held and the expenditure is not blocked. | → |
| Landed cost | The full cost of getting goods to their present location and condition: purchase price plus freight, insurance, duty, clearing and inland transport. | → |
| Lock-up | In a services business, the total days between performing work and receiving cash — unbilled work in progress days plus debtor days. | → |
| Master File / Local File | Transfer pricing documentation required above prescribed revenue thresholds, to be provided to the FTA on request rather than filed with the return. | → |
| Merchant service charge | The commission a card acquirer deducts from settlements. An expense, not a reduction of revenue. | → |
| Net realisable value | The estimated selling price less the costs of completion and sale. Inventory is carried at the lower of cost and net realisable value. | → |
| Occupancy cost | The full cost of being in a centre — base rent, turnover rent, service charge, marketing levy, chiller and storage — usually expressed as a percentage of net sales. | → |
| Prime cost | In F&B, food cost plus labour cost combined — the single most useful early-warning number in a restaurant. | → |
| Principal versus agent | Whether a business sells in its own right (recognising the full sale as revenue) or arranges a sale for another (recognising only its commission). Turns on who controls the goods before transfer. | → |
| Qualifying Free Zone Person | A free zone entity meeting every prescribed condition — substance, qualifying income, de minimis, transfer pricing and audited statements — and therefore able to apply 0% to qualifying income. | → |
| Quality of earnings | An assessment of how much of a business's reported profit is genuinely recurring, used to set the adjusted EBITDA a price is built on. | → |
| Retention | An amount withheld by an employer from a contractor's payments until defects liability expires. A receivable, not a deduction from revenue. | → |
| Reverse charge | The mechanism by which a UAE recipient of imported goods or services accounts for the VAT itself, declaring output tax and recovering it in the same return where entitled. | → |
| Service charge | A tenant contribution to the landlord's cost of operating and maintaining common areas, normally charged per square foot. | → |
| Shrinkage | The difference between the stock records say should be held and the stock actually counted, usually expressed as a percentage of sales. | → |
| Simplified tax invoice | A reduced-content tax invoice permitted where the recipient is not VAT-registered, or is registered but the consideration is within the prescribed limit. | → |
| Small Business Relief | An election allowing a resident taxable person with revenue not exceeding AED 3 million to be treated as having no taxable income, available for tax periods ending on or before 31 December 2026. | → |
| Taxable person | A person within the scope of UAE Corporate Tax, required to register and file whether or not tax is payable. | → |
| Turnover certificate | A formal statement of a tenant's sales for a period, given to the landlord under the lease. Annual certificates are commonly required from a registered auditor. | → |
| Turnover rent | Rent calculated as a percentage of a tenant's sales above an agreed threshold, usually in addition to a fixed base rent. Also called percentage rent. | → |
| Voluntary disclosure | The mechanism for correcting an error in a previously submitted tax return or refund application, subject to conditions and deadlines. | → |
| WPS | The Wage Protection System — the UAE's electronic salary transfer regime requiring wages to be paid through approved financial institutions. | → |
| Z-report | The end-of-day report from a point-of-sale terminal, totalling the day's transactions by payment type and closing the trading day. | → |
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
A term here that applies to you?
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