UAE VAT rules: Six employee expenses businesses can now claim tax back on
Abu Dhabi: The UAE's Federal Tax Authority (FTA) has identified six categories of employee expenses on which businesses subject to value-added tax (VAT) may recover or deduct input tax, including transport, food and beverages, work-related accommodation, temporary housing for new employees, mobile phones and internet services, and parking fees. The provisions, outlined in FTA Decision No. 17 of…
The Federal Tax Authority (FTA) of the UAE has recently issued guidelines regarding the tax recovery for employee expenses under Value-Added Tax (VAT) regulations. Businesses subject to VAT can now claim tax back on six categories of employee expenses: transport, food and beverages, work-related accommodation, temporary housing for new employees, mobile phones, and internet services.
These provisions aim to ensure that the goods and services are used for business purposes rather than acting as personal benefits for employees. However, it is essential to note that businesses can only reclaim or deduct the VAT component included in the costs of eligible expenses, not the full cost. For instance, if an eligible service costs Dh105, including Dh5 in VAT, the recoverable or deductible amount is Dh5, provided all relevant requirements are met.
Brief written by urgent.news from Gulf News's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
