A security services company in the UAE makes or loses money on three numbers: the fully loaded monthly cost of every deployed guard, the billing cycle you invoice on, and the VAT you owe on advance payments before any hour is worked. This guide sets out a bookkeeping structure for UAE guarding, event security and security-systems businesses as at October 2026 — how to track guard costs, how VAT applies to retainers and mobilisation advances, which input tax you cannot recover, and the corporate tax dates that now apply to every licensed operator.
Why standard bookkeeping breaks for guarding businesses
Most accounting templates treat salaries as overhead and revenue as invoiced work. A guarding business fails under both assumptions. Guards rotate between sites, sit idle between contracts, and carry costs — visa, accommodation, transport, uniform, licence card — that belong to the contract, not to the month. Revenue is often billed monthly in advance as a retainer, long before the service is delivered. If your books do not separate the two, you cannot tell which sites are profitable and which are quietly subsidised by the rest of the business.
The fix is a contract-level cost ledger. Every deployed guard gets a monthly cost card: salary, overtime, accommodation, transport, uniform and equipment depreciation, licence and ID costs. Every site gets a revenue line from its retainer. Margin by site falls out of the books instead of being guessed at renewal time.
The records that matter, and the rules behind them
| Record | What it captures | Rule and source |
|---|---|---|
| Deployed-guard cost card | Salary, overtime, accommodation, transport, uniform and equipment, licence and ID costs per guard, per site | Salaries are paid through MOHRE's Wage Protection System (WPS), which protects the payment record; the payroll file is the evidence base for every cost (Federal Decree-Law No. 33 of 2021 on Regulation of Employment Relationships, MOHRE) |
| End-of-service accrual | Monthly accrual for gratuity per guard based on basic wage and service years | 21 days' basic wage per year for the first five years of service, 30 days per year thereafter, capped at two years' total wage (Federal Decree-Law No. 33 of 2021, Art. 51; UAE Government portal guidance) |
| Retainer and advance invoices | Date, amount and VAT on advance-billed monthly retainers and mobilisation fees | For periodic payments and advances, the date of supply is generally the earliest of invoice issuance, payment due and payment receipt (Federal Decree-Law No. 8 of 2017, Art. 26) |
| SIRA licensing costs | Company licence, guard ID cards, training and renewal fees | In Dubai, no person may provide security services without a licence from the Security Industry Regulatory Agency (Dubai Law No. 12 of 2016 regulating the security industry) |
| Equipment and vehicle register | Radios, CCTV stock, patrol vehicles, uniform stock — capitalised and depreciated | Standard-rate VAT of 5% applies to these purchases; input tax is recoverable where the goods are used for the business (Federal Decree-Law No. 8 of 2017, Art. 3) |
| Records retention | Accounting records, contracts, payroll and VAT files | Keep VAT records at least 5 years and corporate tax records at least 7 years after the end of the tax period (FTA guidance, 27 August 2025) |
VAT on retainers, advances and mobilisation fees
Advance billing is where security companies either comply or drift. Under the VAT law's special timing rules, the date of supply for a contract with periodic payments is generally the earliest of the tax invoice date, the payment due date shown on it, and the date payment is received — subject to the one-year backstop (Federal Decree-Law No. 8 of 2017, Art. 26). In practice:
- A monthly retainer invoiced on the 1st for the month ahead carries VAT in that invoice period, not when the guards actually stand post.
- A mobilisation fee taken before contract start is a supply of services with VAT due when you receive the money or issue the invoice, whichever comes first.
- Deposits held purely as security, refundable and never applied to the invoice, are not consideration until applied.
Registration follows the standard thresholds: mandatory VAT registration when taxable supplies and imports exceed AED 375,000 over any 12-month period, and voluntary registration possible from AED 187,500 (Federal Decree-Law No. 8 of 2017, Arts. 17 and 20). Most guarding companies with more than a handful of contracts cross the mandatory line quickly — a single AED 35,000-per-month retainer is AED 420,000 a year.
One input tax rule trips operators up: input tax on entertainment services is not recoverable (Executive Regulation of Federal Decree-Law No. 8 of 2017, Cabinet Decision No. 52 of 2017, Art. 53). Staff hospitality events can therefore be a hidden cost. Guard uniforms, radio equipment, SIRA training and vehicle running costs are ordinary business inputs — that VAT is recoverable if you are registered and the expense is for the business.
Payroll: WPS schedules and the gratuity accrual
Guard salaries must move through the Wage Protection System, and the payroll file is also your cost-control tool: comparing WPS payments to the deployed-guard cost cards each month exposes idle-guard float fast. Accrue end-of-service benefits monthly using the 21-day (first five years) and 30-day (beyond five years) scales on basic wage, capped at two years' wage (Federal Decree-Law No. 33 of 2021, Art. 51). An accrual that only appears when a guard resigns is how security companies end up with a full payroll month swallowed by one terminal gratuity.
The corporate tax calendar
Corporate tax applies to your company regardless of licensing jurisdiction, and the dates are fixed:
- Register for corporate tax within the FTA's timelines — in general, within three months of the end of the tax period (FTA Decision No. 3 of 2024). Late registration carries an AED 10,000 administrative penalty (Cabinet Decision No. 75 of 2023, penalty table).
- Submit the corporate tax return and pay within nine months of the end of the tax period (FTA guidance, 19 August 2025).
- Rates: 0% on taxable income up to AED 375,000 and 9% above it (FTA Small Business bulletin).
- If annual revenue is AED 3 million or less, Small Business Relief lets an eligible UAE resident company treat taxable income as nil for tax periods ending on or before 31 December 2029 (Ministerial Decision No. 131 of 2026, extending the relief; MoF announcement, 7 August 2026).
- Keep corporate tax records at least 7 years after the tax period ends (FTA guidance, 27 August 2025).
Decision aid: the monthly close for a guarding contract
- Reconcile WPS payments to the deployed-guard cost cards; flag any guard paid but not deployed.
- Update the end-of-service accrual for leavers, joiners and another month of service.
- Confirm every advance retainer invoice carried VAT at the right tax point.
- Recover equipment, uniform and licence input tax in the return; exclude entertainment.
- Compute margin per site; feed renewals with real numbers.
- Check the corporate tax calendar against the period end — registration and filing dates do not wait for profit.
Frequently asked questions
Do we charge VAT on retainers before the guards are deployed? Yes in general — for advance and periodic billing, the VAT date of supply is the earliest of invoice issuance, payment due and payment receipt (Federal Decree-Law No. 8 of 2017, Art. 26).
Can we recover VAT on guard uniforms and SIRA training? Yes, where you are VAT-registered and the costs are incurred for the business. Input tax on entertainment services is the main blocked category (Cabinet Decision No. 52 of 2017, Art. 53).
Are end-of-service accruals deductible for corporate tax? An accrued gratuity provision for current staff is generally recognised when the obligation exists and is based on basic wage scales under Federal Decree-Law No. 33 of 2021 — keep the computation in your records for at least seven years.
What records must a security company keep? VAT records at least 5 years; corporate tax records at least 7 years after the tax period ends (FTA guidance, 27 August 2025).
Get the books doing their job
Finanshels provides bookkeeping services in the UAE built around contract-level costing, WPS payroll reconciliation and advance-billing VAT. If you are also weighing registration or filing dates, see corporate tax registration in the UAE and corporate tax filing in the UAE, or talk to our team.
Last reviewed: 14 October 2026. This article reflects UAE federal law and Dubai security-industry regulation as at that date; thresholds and deadlines are date-scoped and should be re-checked against the cited primary sources before acting.
