Professional Services & Consultancies
Professional-services firms bill for time and expertise, so their tax position turns on two questions an invoice rarely answers on its own — where each service was supplied, and which period the work belongs to. A recipient outside the UAE is not, by itself, a zero-rated supply.
MHBC Finance coordinates the bookkeeping, VAT and Corporate Tax function behind UAE consultancies and professional-services firms, so the place-of-supply position on each engagement is documented, fee income lands in the period it was earned, and the return that follows is built on both.
Resident firms must register for Corporate Tax regardless of income, and tax is charged at 9% on taxable income above AED 375,000, with the return due within nine months of the end of the tax period.
Where this work lands
Consultancy billing engagements inside and outside the UAE
Advisory firm closing a year with unbilled work in progress
The accounting and tax work behind billable time
The goal is simple: keep the engagement file, the VAT return and the Corporate Tax computation telling the same story about the same hours. For a professional-services firm, that work concentrates in five areas.
VAT and the place-of-supply test
MHBC determines where each engagement is supplied and applies either the 5% standard rate or export-of-services zero-rating, so that every fee note carries the treatment the periodic VAT return will have to defend.
Zero-rating is a conclusion, not a starting point. Services exported to a recipient who is outside the UAE and has no place of residence in a GCC implementing state can be zero-rated at 0%, provided the place-of-supply and export conditions in Article 31 of the VAT Executive Regulations are met; where those conditions are not satisfied, the 5% standard rate applies.
Fee income and work in progress
MHBC recognises fee income and unbilled work in progress across the correct accounting periods under the applicable IFRS standards, so that reported results reflect the work actually delivered.
An invoice date is not a recognition date. Work delivered but not yet billed is carried as work in progress and included in the period it relates to, which keeps taxable profit aligned with the engagements performed rather than with the month the fee note happened to go out.
Corporate Tax registration and filing
MHBC registers the firm for Corporate Tax, prepares the return applying the 9% rate on taxable income above AED 375,000, and files within nine months of the end of the tax period so that the computation runs off accounts already closed.
Registration is not a function of profit. Resident firms must register for Corporate Tax regardless of income, and a firm with revenue of AED 3 million or less in the tax period may elect Small Business Relief and be treated as having no taxable income, an election available for tax periods ending on or before 31 December 2026.
Payroll, WPS and employment costs
MHBC runs the monthly payroll and prepares the WPS salary file, posting the payroll journal into the books each month so that employment costs are supported by the records the Corporate Tax computation depends on.
Which requirement applies is a licensing question before it is a payroll one. Employers registered with the Ministry of Human Resources and Emiratisation must pay wages through the Wage Protection System, and several free zones operate their own equivalent salary-transfer requirement, so the regime that applies depends on where your entity is licensed — and the salaries, leave and end-of-service accruals behind it are deductible costs that have to be supported by records.
Audit coordination and record retention
MHBC prepares the financial statements and supporting schedules, coordinates a Ministry of Economy-licensed auditor — who performs the audit — and retains the day-to-day ledgers, billing records and management accounts for the seven-year period required for Corporate Tax.
Audited financial statements are required for any taxable person with revenue above AED 50 million in the relevant tax period, and for every Qualifying Free Zone Person regardless of revenue. Mainland companies must maintain them under the Commercial Companies Law whatever their revenue, and many free zones require audited accounts for licence renewal.
Related service
VAT
For a firm that bills time, VAT is the question asked of every engagement. MHBC establishes where each service is supplied, applies the rate that follows and files the return that reports it — so the treatment written on the invoice and the treatment declared in the return are the same decision, documented once.