UAE Federal Tax Authority Clarifies Deduction of Input VAT on Goods and Services Provided to Employees Free of Charge

The UAE Federal Tax Authority has published Decision No. 17 of 2026, which outlines the specific cases and conditions under which a taxable business can recover or deduct the input tax (VAT) it incurs when purchasing goods and services to provide to its employees free of charge. Allowable expense types for which input tax may be recovered/deducted, and the specific conditions for each, are as follows:

Employee Transportation Expenses:

• The transportation must be strictly for travel between…