Percentage-of-completion, retentions & WIP done right
Accounting Services for Construction & Contracting in Dubai
Construction accounting isn't standard bookkeeping with a different logo — percentage-of-completion revenue recognition, retention money, and work-in-progress tracking each need specific treatment that generic accountants routinely get wrong.
What's different about construction & contracting accounting
Most businesses in this sector rely on the same core services: bookkeeping, VAT return filing, the annual corporate tax return and the statutory audit.
Accounting services built for construction & contracting
Accounting for construction and contracting companies
Construction accounting in the UAE turns on long contracts, progress billing, retentions and variation orders. Under IFRS 15, revenue is usually recognised over time as work progresses, so a contractor's reported profit depends on how well costs to complete are estimated. Weak project accounting is the most common reason contractors are surprised by losses at the end of a job — and by bank covenant breaches.
| Project accounting | Cost codes per project, cost-to-complete forecasts and percentage-of-completion revenue under IFRS 15 |
| Progress billing | Interim payment certificates, retentions and variations tracked against the contract |
| Subcontractors | Subcontractor accruals, retentions payable and back-charges |
| Plant and equipment | Asset register, depreciation and plant cost allocation to projects |
| Bank and bonds | Facility, performance bond and guarantee reporting for lenders |
| Year-end | Audited IFRS statements, corporate tax return and contract-level reconciliations |
VAT and corporate tax for contractors
Construction services are generally standard-rated at 5%, with specific rules for the first supply of residential buildings, which can be zero-rated, and for supplies to designated zones. For continuous supplies such as staged construction contracts, the tax point is typically the earlier of the invoice date or payment date, so VAT can become due on progress claims before cash is received.
For corporate tax, contract revenue and profit follow the IFRS accounts, so estimate changes and loss provisions flow straight into taxable income. Retentions and disputed variations need documented policies.
Related services for contractors
Related guides from our team
Practical explanations of the rules behind this service, written by our chartered accountants.
Questions from construction & contracting owners
How is revenue recognised on a multi-year construction contract?+
Under IFRS 15, revenue is generally recognised over time as performance obligations are satisfied — measured by progress toward completion, not simply on invoicing milestones.
Do retentions affect VAT timing?+
VAT is generally due on the full contract value at the point of supply, regardless of retention — a common area where businesses under-account for VAT on the retained portion.
Can you take over mid-project without disrupting our records?+
Yes — we start with a WIP and retention reconciliation against current project status before taking on the recurring cycle.
How do contractors recognise revenue under IFRS 15?+
Usually over time, based on progress towards completion, measured by cost incurred or surveys of work performed.
When is VAT due on progress billing?+
Generally on the earlier of invoice or payment for each stage, not when the project finishes.
Is construction of residential buildings zero-rated?+
The first supply of a new residential building within three years of completion can be zero-rated; construction services to developers have their own rules.
Can you help with bank facility reporting?+
Yes — project-level reporting and audited accounts for lenders. See bank financing support.
First review is free, within 24 hours.
Running a construction & contracting business and tired of generic bookkeeping?
Tell us your current setup and where the reporting breaks down — we'll scope a fixed monthly fee built around how your business actually earns revenue.