Accounting Guide for Travel Agents based in the UAE

Accounting Tips for UAE Travel Agents: Build on Our US Guide

Running a travel agency in the UAE comes with unique financial challenges, from managing multi-currency transactions to navigating VAT regulations. Our comprehensive guide, Master Your Finances: The Essential Accounting Guide for Travel Agents, is a top resource for US travel agents, offering a solid foundation for accounting best practices.

While it’s packed with universal tips such as reconciling payments and tracking expenses, UAE travel agents need to consider local regulations and practices. Below, we outline key accounting essentials tailored for the UAE market to complement the US guide.

1. Understand VAT Compliance

Unlike the US, where sales tax varies by state, the UAE applies a 5% Value Added Tax (VAT) to certain travel agency services, such as service fees and local tours, since its introduction in 2018. Commissions on international travel are often zero-rated, meaning no VAT is charged, but they must still be reported.

If your taxable turnover exceeds AED 375,000 annually, you must register with the Federal Tax Authority (FTA) and file returns monthly or quarterly.

Action: Set up a VAT Payable account in your accounting software (e.g. Xero or Zoho Books). Track input VAT (on expenses) and output VAT (on taxable services) separately to calculate your net VAT liability. Apply the US guide’s reconciliation advice to the FTA’s VAT return deadlines.

Review also our blog VAT Registration and Filing in the UAE: Step-by-Step Guide for 2025

2. Multi-Currency Accounting

The UAE’s international client base means handling payments in AED, USD, EUR and others. Exchange-rate shifts can affect profit margins.

Action: Record invoices and supplier payments in their original currency. Use accounting tools like Xero to update exchange rates automatically. Add a Foreign Exchange Gain/Loss account to monitor currency impacts, following the structure in the US guide.

3. Supplier and Consolidator Payments

UAE travel agents often work directly with suppliers or consolidators rather than host agencies. Invoices and payment tracking must be precise to avoid lost income.

Action: Log every booking, invoice and payment. Replace the US Host Agency Fees account with Supplier Commission Splits to reflect your direct supplier model.

4. Corporate Tax and Trade Licences

Since June 2023, UAE mainland businesses pay a 9% corporate tax on profits above AED 375,000, while qualifying free-zone entities may remain at 0%. Annual trade-licence renewals through DED or free-zone authorities are another key cost.

Action: Add Corporate Tax Payable and Trade Licence Fees accounts to your ledger. Use the US guide’s expense-tracking methods to manage renewals and tax liabilities efficiently.

Also review our blog - Understanding Tax in the UAE - From Zero Tax to Corporate Reality

5. Visa Processing Fees

Many UAE travel agents provide visa services involving fees paid to embassies or processing agencies. These can be recorded as cost of sales or operating expenses depending on whether they’re passed on to clients.

Action: Create a Visa Processing Fees account and reconcile these costs against client payments each month.

For a complete accounting framework, begin with our US guide’s chart of accounts and reconciliation approach, then adapt it using these UAE-specific essentials. Need help configuring Xero or Zoho Books for VAT? Contact Antravia AE