UAE tax rules: What businesses can claim for employee expenses
Giving employees the tools they need to do their jobs effectively is a timeless business requirement. Whether a company has standard lists of equipment and resources for different grades and functions, which it should to make onboarding easier, most businesses could produce such lists without much difficulty. There are, however, tax considerations, particularly corporation tax and VAT .…
The Federal Tax Authority Decision No 17 of 2026 has clarified tax rules for business expenses related to employee allowances in the UAE. Transport provided for staff must be given without charge, only between home and work, and no identifiable non-business benefits should be offered. Cash payments cannot replace transport. Pooling transport between neighboring companies could complicate matters, but outsourcing may be a simpler solution.
Food and beverages can be provided when employees' homes are impractical to reach, but the definition of "remote" is unclear. Accommodation provided by the company must be necessary for work, not luxurious, and does not exclude long-term residents. Mobile phones must be work-related and used solely for business purposes, with invoices reviewed for VAT and corporation tax deductions. A formal standard operating policy must be communicated, reviewed, and enforced.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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