UAE lets businesses recover input VAT on listed employee benefits from 1 October 2026

What changed in detail

Federal Tax Authority Decision No. 17 of 2026 was issued on 9 September 2026 and applies from 1 October 2026. It sets the cases and conditions in which a business may recover input tax on goods or services it buys for its employees at no charge, where a contractual obligation or a documented policy requires it to provide them. The legal basis is article 53(1)(c)(2) of Cabinet Decision No. 52 of 2017.

Article 2 lists the covered categories: employee transport, food and beverages, accommodation (including temporary accommodation for new joiners), mobile and internet services, and parking. Each category carries its own listed conditions, which the Decision sets out.

What it means

The Decision does not give a blanket right to recover VAT on staff costs. Recovery is limited to the five listed categories and only where the employer is obliged, by contract or a documented policy, to provide the benefit. Employers should check that their employment contracts or written policies actually create that obligation, and that each category’s listed conditions are met, before claiming input tax on periods from 1 October 2026. Benefits outside the list stay governed by the general rules.