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UAE Federal Tax Authority Issues 2026 Decision on Employee Expense VAT Recovery

The UAE Federal Tax Authority has issued Decision No. 17 of 2026 setting compliance requirements for recovering input VAT on employee benefits provided free of charge. Recovery is permitted across six designated categories, provided expenses are supported by contractual terms or documented corporate policies. Businesses are required to maintain verifiable documentation proving a strictly commercial purpose.

Published Source: Tass & Hamjit
Issuing authority
Federal Tax Authority
Jurisdiction
United Arab Emirates
Stage
Final rule
Official document
Decision No. 17 of 2026
Official source
irglobal.com
Illustration: A modern corporate accounting office in Dubai with financial reports, calculators, and tax documents laid out on a glass conference tabl
Illustration

The UAE Federal Tax Authority's Decision No. 17 of 2026 outlines compliance requirements for businesses seeking to recover input Value Added Tax (VAT) on employee benefits provided without charge, according to publisher Tass & Hamjit.

The regulatory framework sets out conditions across six specific categories. These designated areas include staff transport, mobile telecommunications services, and work-related accommodation.

Under the rules, eligibility for VAT recovery requires that the expenses are provided pursuant to contractual terms or a documented corporate policy, and solely for business operations.

To preserve their eligibility for input VAT recovery, enterprises operating in the UAE must retain verifiable records that substantiate the strict commercial purpose of the expenditures.

Sources

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