The plain-language glossary.
Short, accurate definitions of the terms you meet in accounting, VAT and e-invoicing.
- Accredited service provider (ASP)
- A company approved by the UAE Ministry of Finance to validate and exchange e-invoices on behalf of businesses over the Peppol network.
- Accrual accounting
- Recording income when earned and expenses when incurred, not when cash moves.
- Audit trail
- A record of who changed what, when and from where, with the values before and after.
- Balance sheet
- A statement of what a business owns (assets), owes (liabilities) and the owners’ equity at a date.
- Chart of accounts
- The list of accounts a business uses to classify every transaction.
- Clearance model
- An e-invoicing model where the tax authority validates an invoice before it reaches the buyer, as in Saudi Arabia for B2B invoices.
- Corporate tax (UAE)
- A federal tax on business profits: 0% up to AED 375,000 of taxable income and 9% above.
- Credit note
- A document that reduces or cancels an issued invoice. Issued invoices are corrected with credit notes, not edited.
- Double-entry bookkeeping
- Every transaction is recorded as equal debits and credits, so the books always balance.
- E-invoice
- An invoice exchanged as structured data between systems. A PDF is not an e-invoice.
- EmaraTax
- The UAE Federal Tax Authority’s online portal for registration, returns and payments.
- FATOORA
- Saudi Arabia’s e-invoicing programme and platform, run by ZATCA.
- Five-corner model
- An e-invoicing model where invoices pass between the parties’ providers and tax data also reaches the tax authority (the fifth corner).
- General ledger
- The complete record of all accounts and their entries.
- GST
- Goods and Services Tax, the consumption tax used in India, Singapore, Australia and other countries.
- Input tax
- VAT paid on purchases that a registered business can usually recover.
- IRN
- Invoice Reference Number issued by India’s Invoice Registration Portal for each GST e-invoice.
- Making Tax Digital (MTD)
- The UK programme requiring digital records and software-based tax filing.
- Output tax
- VAT charged on sales and payable to the tax authority.
- Peppol
- An international network and set of standards for exchanging e-invoices through certified access points.
- PINT AE
- The UAE specification of the Peppol International invoice model, defining mandatory e-invoice fields.
- Profit and loss statement
- A report of income and expenses over a period, showing profit or loss.
- Reconciliation
- Matching your records against a bank statement or other source and explaining every difference.
- Reverse charge
- A VAT mechanism where the buyer, not the seller, accounts for the VAT, typically on imports of services.
- Tax invoice
- An invoice meeting the legal requirements for VAT, needed to recover input tax.
- Three-way match
- Checking that the purchase order, goods receipt and supplier bill agree before paying.
- Trial balance
- A list of all ledger accounts and balances, used to check that debits equal credits.
- TRN
- Tax Registration Number: the 15-digit VAT number issued by the UAE Federal Tax Authority.
- VAT 201
- The UAE VAT return form filed on EmaraTax.
- ViDA
- VAT in the Digital Age: the EU package adopted in 2025 that enables e-invoicing and digital reporting.
- Weighted-average cost
- An inventory valuation method where each item’s cost is the average of what was paid for stock on hand.
- WPS
- The UAE Wage Protection System, under which salaries are paid through approved institutions using a standard salary file.
- ZATCA
- The Zakat, Tax and Customs Authority of Saudi Arabia.
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