UAE Clarifies Input VAT Recovery on Employee Expenses

The UAE FTA issued Decision No. 17/2026, effective Oct. 1, 2026, clarifying when businesses may recover input VAT on certain employee-related expenses.
Input VAT recovery is allowed for employee transport used solely for work commuting, with no personal use.
Recovery is also allowed for food and beverages in remote or isolated locations where no alternative is available, and for employee accommodation only when needed for operational purposes and not part of compensation/benefits.
Temporary accommodation for new employees is recoverable for up to 30 days if commensurate with job requirements.
Telecommunications and employee parking expenses may also qualify if used for business purposes, personal use is incidental, internal controls/monitoring exist, and required records are kept.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.