UAE Corporate Tax: what changes at the AED 375,000 threshold
How the 0% and 9% bands work and what to prepare before your first return.
Why 13 weeks, and why direct
Profit forecasts tell you whether the business is making money. They do not tell you whether you can pay salaries on the 28th. A 13-week forecast uses the direct method: actual cash receipts and actual cash payments, by week. Thirteen weeks covers a full quarter, so it always includes a VAT payment, a payroll cycle three times over and most supplier terms.
The structure
Keep it to one sheet that anyone in management can read. The core is four lines per week:
| AED thousands | Week 1 | Week 2 | Week 3 | Week 4 |
|---|---|---|---|---|
| Opening cash | 880 | 820 | 760 | 700 |
| Receipts | 300 | 290 | 270 | 250 |
| Payments | (360) | (350) | (330) | (340) |
| Closing cash | 820 | 760 | 700 | 610 |
Illustrative figures. Underneath, receipts and payments are broken into the lines that matter for your business, and a minimum cash line shows how close each week comes to your safety buffer.
Forecasting receipts
Start from your receivables ageing, not from your sales budget. For each significant customer, forecast when cash will actually arrive based on how they really pay, not on the invoice terms. If a customer on 30-day terms usually pays in 55 days, use 55. Then add expected new sales, converted to cash using the same realistic timing.
Forecasting payments
Payments are easier to predict, because you control most of them. List them by type:
- Payroll: salaries through the Wage Protection System on fixed dates, plus end-of-service and leave payments when staff leave.
- Rent: often paid in a few large post-dated cheques a year in the UAE, which can create sharp dips. Put each cheque in the week it will clear.
- Suppliers: from your payables listing and agreed terms.
- Tax: VAT by the 28th day after each quarter, and Corporate Tax within nine months of the year-end.
- Financing: loan repayments, interest and lease payments.
- One-offs: licence renewals, visa costs, capital purchases and dividends.
Set a minimum cash line
Decide the lowest balance you are comfortable holding, for example one month of payroll and rent. Draw it on the forecast. Any week that dips below it is a decision you need to make now: chase a customer, move a supplier payment, delay a purchase or speak to your bank while you still have time.
A forecast is only trusted if it is compared with what actually happened, every week.
The weekly routine
- Replace last week's forecast with actual receipts and payments.
- Explain the biggest differences in one or two lines.
- Roll forward: drop the week just ended and add a new week 13.
- Update receipts from the latest receivables ageing.
- Flag any week below the minimum cash line and agree actions.
Once the template is built, this should take under an hour a week. After four to six weeks the forecast becomes noticeably more accurate, because you learn how each customer really pays.
What your bank looks for
Lenders want to see that the forecast is realistic, updated and reconciled. Show them the comparison of forecast against actual for recent weeks, the assumptions behind large receipts, and how the forecast feeds any covenant calculations. A forecast with a track record is far more persuasive than a perfect-looking one with none.
This article is general guidance, not advice for your business. Hassan sets up 13-week forecasts and working capital reviews for UAE businesses.
