Expense and tax questions, answered with nuance

In short: Partly, in most cases: the business share is deductible for Corporate Tax, the private share is not. For VAT, input tax on a car that is available for personal use is generally not recoverable.

General rule

Corporate Tax allows expenditure incurred wholly and exclusively for the business. When a cost serves both business and private use, only the identifiable business part, or a fair and reasonable proportion, is deductible.

Exceptions and conditions

• A vehicle used only for the business (for example a delivery van, or a car kept at the business premises and never used privately) can be fully deductible.
• Fuel, Salik tolls and parking for a documented business trip are business costs; the daily commute and family use are not.
• If the car is owned by you personally and the company reimburses business kilometres at a reasonable rate, the reimbursement is a business cost when it is supported by a mileage log.
• VAT: input tax on buying, renting or leasing a car that is available for personal use is not recoverable. Vehicles outside the VAT definition of a motor vehicle (for example trucks and goods vans not designed to carry passengers), licensed taxis and cars used in a rental business are outside this block.

Documents to keep

• Mileage log (date, destination, purpose, kilometres)
• Fuel, parking and toll receipts
• Purchase, lease or rental contract
• A written basis for the business percentage you use

Risk level

Medium risk: conditions and documents matter A 100% business claim for a single car that is also the family car is a common audit point. A reasoned percentage backed by a log is much easier to defend.

When to get it confirmed

Have the percentage confirmed if the car is a large cost, if you want to claim more than a modest business share, or if you plan to recover VAT on it. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1) and 28(3)
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 53(1)(b), 53(2)(b) and 53(4)
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Section on expenditure incurred for more than one purpose

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Usually yes for the business share. A line used only for work is fully deductible; a personal line used partly for work is deductible in proportion.

General rule

Expenditure is deductible when incurred wholly and exclusively for the business. For mixed use, deduct the identifiable business part or a fair and reasonable proportion.

Exceptions and conditions

• A separate business SIM or a contract in the company's name used for work is generally fully deductible.
• Family plans and home internet shared with the household are mixed: keep only a reasonable business share.
• The handset itself is equipment: see the entry on laptops and equipment.

Documents to keep

• Monthly bills, ideally in the company's name
• A note of how you estimate the business share for shared lines
• Tax invoices showing VAT if you are VAT-registered

Risk level

Low risk if documented Small amounts and a reasonable split rarely cause problems; a family plan claimed at 100% can.

When to get it confirmed

Usually no confirmation needed for a reasonable split. Ask if a large family plan is paid by the company. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1) and 28(3)
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 54 and 55

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Possibly a proportion, if part of the home is genuinely used for the business and you can show a fair basis. It is not automatic, and it depends on who pays and who rents.

General rule

Mixed-purpose expenditure is deductible only for the business part, allocated on a fair and reasonable basis (for example floor area used for work and time).

Exceptions and conditions

• If your licence requires a separate office or flexi-desk, that cost is a business cost in full; home costs may then be harder to justify on top.
• If the company pays rent for a home you own, or that a relative owns, it is a payment to a Connected Person: deductible only at market value and only for the business part.
• A room used both as office and as guest or family space supports a smaller share than a dedicated room.
• Natural persons (sole establishments and freelancers): the same allocation logic applies within the business accounts.

Documents to keep

• Tenancy contract and Ejari
• DEWA and internet bills
• A simple floor plan or note of the area used and the calculation
• If paid to you or a relative: a written agreement and evidence of market rent

Risk level

Medium risk: conditions and documents matter Medium. The FTA can ask why a share of a family home is a business cost. A modest, calculated share is easier to defend than a large round figure.

When to get it confirmed

Have it confirmed before claiming more than a small share, or when the company pays rent to you or a family member. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 28(3), 36(1)
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Sections on mixed-use expenditure and payments to Connected Persons

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Generally yes. Office or flexi-desk rent and licence, visa and free zone fees of the business are business costs, provided the paperwork is in the business's name.

General rule

Expenditure incurred wholly and exclusively for the business and not capital in nature is deductible in the period in which it is incurred.

Exceptions and conditions

• Rent paid to the owner, a director or one of their relatives (a Connected Person) is deductible only to the extent it matches market value.
• Fees for family residence visas sponsored personally are personal, not business costs.
• Long-term prepayments are spread over the periods they cover in the financial statements, unless you use the cash basis allowed for small businesses.

Documents to keep

• Lease or flexi-desk agreement
• Licence and free zone invoices
• Payment proof
• For rent paid to a related person: evidence of market rent

Risk level

Low risk if documented Low when invoices are in the business's name and the payee is unrelated.

When to get it confirmed

Ask when rent is paid to yourself or a relative, or when fees cover family members. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 36(1) and 36(2)
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 54 and 55

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Not by default: a gym is a personal cost. It can be a staff benefit when it is part of a documented employment package or staff policy; for an owner-manager, only within the market-value rules.

General rule

Personal spending is not incurred for the business. Employee benefits under a contract or documented policy are part of employment costs.

Exceptions and conditions

• A gym benefit for employees under a written staff policy is generally deductible as an employment cost.
• Owner-manager of a company: deductible only as part of documented remuneration at market value (you are a Connected Person).
• Freelancer or sole establishment: personal, not deductible.
• A fitness business (for example a personal trainer) may have gym costs that are genuinely business costs.
• VAT on staff benefits for their personal use is generally not recoverable: a gym is rarely needed for an employee to perform their role.

Documents to keep

• Staff policy or employment contract mentioning the benefit
• Invoices

Risk level

Medium risk: conditions and documents matter Medium to high for the owner's own membership without a package.

When to get it confirmed

Ask before putting your own gym into your remuneration package. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 28(2)(a) and 36
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 53(1)(c)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Usually yes: a UAE resident company is taxed on its worldwide income, including fees from foreign clients. A natural person is taxed on foreign income only insofar as it relates to the business carried on in the UAE.

General rule

A resident juridical person is subject to Corporate Tax on taxable income from the UAE and from outside the UAE. Foreign tax paid on that income may give a Foreign Tax Credit, capped at the UAE tax due on that income.

Exceptions and conditions

• Natural persons: foreign income counts only if it relates to the UAE business; personal foreign investments are outside.
• Foreign tax withheld can be credited (not deducted) up to the UAE tax on the same income; unused credit cannot be carried forward.
• Income received in foreign currency is converted to AED.
• Revenue from foreign clients counts towards the AED 3 million Small Business Relief threshold and towards VAT supplies (exports of services may be zero-rated).

Documents to keep

• Invoices to foreign clients
• Bank receipts with exchange rates
• Certificates of foreign tax withheld

Risk level

Medium risk: conditions and documents matter Medium: the frequent error is believing foreign income is out of scope.

When to get it confirmed

Ask if foreign tax was withheld, or if you may also be tax resident elsewhere. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 12(1)–(2), 47 and 33(8)
• FTA Corporate Tax Guide: Taxation of Natural Persons (CTGNP1) — Business income of natural persons

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Not by default: school fees are a personal family cost. They can become a deductible staff cost when they are part of a documented employment package, and for an owner-manager only within the market-value and documentation rules. The FTA may look at them closely.

General rule

Personal and family spending is not incurred for the business and is not deductible, even if paid from the company account. Remuneration for real work, including benefits such as an education allowance, is a business cost when it is contractual.

Exceptions and conditions

• Employee (not related to you): school fees or an education allowance written into the employment contract or a documented staff policy are generally deductible as part of employment costs.
• Owner-manager of a company (for example an FZ-LLC): you are a Connected Person. A benefit such as school fees is deductible only if it is part of your documented remuneration (employment contract or board/shareholder decision), the total package corresponds to market value for the work you actually do, and it is incurred for the business.
• Sole establishment or freelancer (natural person): you cannot employ yourself. Paying your children's school fees from the business is a personal withdrawal and is not deductible.
• Paid without any contract or decision, or 'just because the company has cash': treated as a personal expense or a distribution, not a deductible cost.
• VAT: tuition at recognised schools is generally zero-rated, so there is often little VAT involved. Where VAT is charged (for example on transport or uniforms), input tax on benefits given to employees for their personal use is generally not recoverable, unless labour law requires the benefit, or a contract or documented policy provides it so the employee can perform their role and this is normal business practice.

Documents to keep

• Employment contract or board/shareholder decision listing the education benefit
• Payroll records showing the benefit as part of the package
• Evidence that the total package is in line with the market for the role (for a Connected Person)
• School invoices addressed consistently with the arrangement

Risk level

High risk: often challenged High for an owner-manager or a family member: it is a typical point of scrutiny. Low to medium for an unrelated employee with a clear contract.

When to get it confirmed

Have it confirmed by an FTA-registered tax agent before you set up a package that includes school fees for yourself or a relative. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 28(2)(a), 36(1)–(2), 34
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Sections on employee benefits and payments to Connected Persons
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 40(1) and 53(1)(c)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Generally yes, but only if they really work for the business and the pay matches the market value of that work. A salary with no real work behind it is not deductible.

General rule

Payments to a Connected Person (the owner, a director, or their relatives up to the fourth degree) are deductible only if and to the extent they correspond to the market value of the service and are incurred wholly and exclusively for the business.

Exceptions and conditions

• Real role, real hours, market pay: deductible like any salary.
• Pay above market value: only the market-value part is deductible.
• Family travel, cars or housing given to relatives who do not work in the business are personal benefits, not business costs.
• Family members who are employees follow the same visa, labour and payroll rules as other staff.

Documents to keep

• Employment contract and job description
• Payroll records and bank transfers
• Evidence of work done (emails, timesheets, deliverables)
• A note on how the pay compares with the market

Risk level

High risk: often challenged High: relatives on the payroll are a well-known audit area.

When to get it confirmed

Have the pay level and the documents confirmed before you start paying a relative. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 35(1)(a), 36(1)–(2), 34
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Payments to Connected Persons

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Often yes for a company, within limits: a salary for work you actually do is deductible up to market value. Dividends are never deductible. For a sole establishment or freelancer, paying yourself is a withdrawal, not a salary.

General rule

As owner you are a Connected Person of your company. Payments or benefits to you are deductible only if and to the extent they correspond to the market value of your services and are incurred wholly and exclusively for the business. Market value is assessed with the arm's length principle.

Exceptions and conditions

• Juridical person (FZ-LLC, LLC): a documented salary at market value is deductible; any excess above market value is not.
• Natural person (sole establishment, freelancer): amounts you take out of the business are not deductible.
• Dividends or profit distributions to the owner are never deductible.
• Under Small Business Relief, the question has no effect on the tax for that period, but records still matter.

Documents to keep

• Employment contract or written decision fixing your pay
• Payroll or transfer records (monthly, not one year-end lump sum)
• Evidence of the market rate for a similar role
• Board or shareholder decision for any bonus

Risk level

Medium risk: conditions and documents matter Medium: a salary set to wipe out the profit, or a large year-end bonus to yourself, invites questions about market value.

When to get it confirmed

Have your pay level confirmed if it is high relative to revenue or to market rates for the role. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 36(1)–(3) and (5), Art. 34, Art. 33(4)
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Payments to Connected Persons

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: It depends, and we can only give the mechanics: a market-value salary is a deductible cost for a company; dividends are paid from taxed profit and are never deductible. Which is better depends on your numbers and situation.

General rule

Dividends and profit distributions to an owner are not deductible. Payments to an owner for services are deductible up to market value. There is no UAE personal income tax on salary or dividends received by an individual, but other countries may tax you if you are resident there.

Exceptions and conditions

• A company whose taxable income stays below AED 375,000 pays 0% on that portion, so the difference may be small.
• Under Small Business Relief there is no Corporate Tax for the period either way.
• A sole establishment or freelancer cannot pay itself a salary or dividends: money taken out is a withdrawal.
• If you are tax resident in another country, its rules may change the answer completely.

Documents to keep

• Shareholder decisions for each dividend
• Financial statements showing distributable profit
• Salary documents as described in the owner salary entry

Risk level

Low risk if documented Low for the rules themselves; the choice depends on your personal situation.

When to get it confirmed

This is a planning question: ask an FTA-registered tax agent, and a tax professional in any other country where you may be resident. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 33(4) and 33(5), Art. 36
• Cabinet Decision No. 116 of 2022 on the amount of Taxable Income subject to 0% (AED 375,000) — Art. 2 and 3
• Cabinet Decision No. 49 of 2023 on natural persons subject to Corporate Tax — Art. 2 (wages and personal investment income outside Corporate Tax)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: No. For a natural person, amounts you withdraw from your business for yourself are not deductible. Business expenses you pay are still deductible under the normal rules.

General rule

No deduction is allowed for amounts withdrawn from the business by a natural person who is a Taxable Person.

Exceptions and conditions

• Genuine business expenses paid from your personal account remain business expenses if they are documented.
• If your business turnover is AED 1,000,000 or less in the calendar year, you are not subject to Corporate Tax as a natural person in the first place.
• Wages from a job, personal investment income and qualifying real estate investment income are outside Corporate Tax for natural persons.

Documents to keep

• Separate business bank account, or a clear record of which payments are business
• Invoices and receipts for business expenses

Risk level

Low risk if documented Low: the rule is clear. The risk is mixing personal and business spending without records.

When to get it confirmed

Ask if you are unsure whether you are taxed as a natural person or should set up a company. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 11(3)(c), Art. 33(5)
• Cabinet Decision No. 49 of 2023 on natural persons subject to Corporate Tax — Art. 2
• FTA Corporate Tax Guide: Taxation of Natural Persons (CTGNP1) — Sections on deductions for natural persons

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: For employees, yes: health insurance is a normal (and often mandatory) staff cost. For the owner and family, it depends on whether it is part of documented remuneration and on who is the sponsor.

General rule

Employment costs, including insurance the employer must or contractually does provide, are business costs. Personal and family costs of the owner are not, unless they are part of documented remuneration at market value.

Exceptions and conditions

• Employees: health insurance required by the emirate's rules or by the contract is deductible.
• Owner-manager employed by the company with a residence visa sponsored by it: insurance can be part of the documented package, subject to the market-value rule.
• Freelancer or sole establishment: your own and your family's insurance is personal.
• VAT: input tax on health insurance for employees and their family (one spouse and up to three children under 18) can be recoverable.

Documents to keep

• Policy schedule showing insured persons
• Employment contract or staff policy
• Visa sponsorship details

Risk level

Medium risk: conditions and documents matter Medium for family members of the owner.

When to get it confirmed

Ask if the policy covers your family and you are the owner. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1) and 36(1)
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 53(1)(c)(1) and (3)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Half of it, for Corporate Tax: entertaining customers, suppliers, shareholders or other business partners is 50% deductible. For VAT, input tax on that entertainment is generally not recoverable.

General rule

A taxable person can deduct 50% of entertainment, amusement or recreation expenditure incurred to receive and entertain customers, shareholders, suppliers or other business partners, including meals, accommodation, transport and admission fees, provided the cost is for the business.

Exceptions and conditions

• Food and drinks provided in the normal course of a business meeting (for example coffee and sandwiches at your office) are not 'entertainment services' for VAT.
• Entertainment of your own employees is not subject to the 50% Corporate Tax limit, but VAT on it is blocked unless an exception applies.
• A meal with friends or family with no business purpose is personal and not deductible at all.
• SoloBooks keeps the full amount; the 50% adjustment is made in your return.

Documents to keep

• Itemised receipt
• Who attended, which company, and the business purpose (write it in the description)
• Tax invoice if you are VAT-registered (even though the VAT is usually not recoverable)

Risk level

Medium risk: conditions and documents matter Medium: the frequent mistake is deducting 100%, or claiming family meals as client meals.

When to get it confirmed

Usually not needed if you apply the 50% rule and note the business purpose. Ask for large events or mixed staff and client events. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 32(1)–(2) and Art. 28
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 53(1)(a) and 53(2)(a)
• FTA public clarification: non-recoverable input tax on entertainment services — FTA public clarification

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Normally not: your everyday food is personal. Meals while travelling away on a business trip are usually a business cost.

General rule

Expenditure not incurred for the purposes of the business is not deductible. Day-to-day living costs are personal even if paid with the company card.

Exceptions and conditions

• Meals during a business trip outside your usual place of work are part of travel costs.
• Refreshments for a working meeting at your office are a business cost.
• Groceries and household items are personal (SoloBooks flags them as 'looks personal' for you to confirm).

Documents to keep

• Receipt
• Trip or meeting reference in the description

Risk level

Medium risk: conditions and documents matter Medium if claimed regularly: daily lunches are an easy target in a review.

When to get it confirmed

Not needed for the general rule; ask if your business model involves meals (for example a food business). Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 28(2)(a) and 32
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Entertainment and mixed-purpose expenditure

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Yes, when the trip is for the business: flights, hotels, local transport and meals on the trip are business costs.

General rule

Expenditure incurred wholly and exclusively for the business is deductible.

Exceptions and conditions

• If family members travel with you, their costs are personal.
• Upgrades or extra nights for leisure are personal; see the entry on mixed trips.
• Hosting a client during the trip (meals, tickets) falls under the 50% entertainment rule.

Documents to keep

• Tickets and boarding passes
• Hotel invoice
• Evidence of the business purpose: meeting invitations, event registration, client emails

Risk level

Low risk if documented Low with evidence of the purpose.

When to get it confirmed

Not usually needed. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1) and 28(3)
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Mixed-purpose expenditure

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Only the business part. Costs that are clearly business (conference fee, business days' hotel) are deductible; holiday days and family costs are not. Shared costs such as the flight need a fair split.

General rule

If expenditure is incurred for more than one purpose, the identifiable business part is deductible, plus a fair and reasonable proportion of any shared part.

Exceptions and conditions

• If the main purpose is business and the leisure part is minor, a larger share of the flight may be reasonable.
• If the main purpose is a holiday with one meeting, most of the trip is personal.
• Family members' costs are personal in every case.

Documents to keep

• Itinerary showing business days and leisure days
• Evidence of the business meetings
• Your calculation of the split

Risk level

Medium risk: conditions and documents matter Medium: the split is a judgement call, so write down how you made it.

When to get it confirmed

Ask if the trip is expensive or the business purpose is thin. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(3)
• FTA Corporate Tax Guide: Determination of Taxable Income (CTGDTI1) — Expenditure incurred for more than one purpose

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Often yes when they have a clear business purpose (for example branded items or modest client gifts). Hospitality-type gifts may fall under the 50% entertainment rule. VAT-registered businesses must also watch the AED 500 per recipient rule.

General rule

Expenditure incurred wholly and exclusively for the business is deductible. Entertainment, amusement or recreation for business partners is 50% deductible. Donations, grants or gifts to an entity that is not a Qualifying Public Benefit Entity are not deductible.

Exceptions and conditions

• Gifts to friends or family are personal.
• Gifts that are tickets, dinners or experiences for clients are treated like entertainment (50%).
• A gift that is really a donation to an organisation follows the donations rule.
• VAT: if you recovered input VAT on goods given away as commercial gifts or samples, giving them away is a deemed supply (output VAT due) unless the value per recipient over 12 months does not exceed AED 500.

Documents to keep

• Invoice
• List of recipients and the business reason
• For VAT: running total per recipient over 12 months

Risk level

Medium risk: conditions and documents matter Medium: expensive gifts and gifts to people with no business link are often challenged.

When to get it confirmed

Ask before giving expensive gifts or if you recover VAT on gifts. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 32 and 33(1)
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 12(4)
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 5(1)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: It depends on your accounting basis. Under accrual accounting (IFRS or IFRS for SMEs), equipment that lasts more than a year is capitalised and depreciated, and depreciation follows your financial statements. Under the cash basis allowed for revenue up to AED 3 million, expenditure is recorded when paid, but capital items still need care.

General rule

Taxable income starts from the accounting profit in your financial statements. Capital expenditure itself is not deducted at once; depreciation recorded under the accounting standards normally flows into the taxable income.

Exceptions and conditions

• Small items below your own reasonable capitalisation threshold are often expensed directly under accounting policy.
• Private use of the laptop or phone reduces the business share.
• There is no separate tax depreciation schedule in the UAE Corporate Tax Law: the accounting treatment is the starting point.

Documents to keep

• Invoice
• Asset register (date, cost, useful life)
• Your capitalisation policy

Risk level

Low risk if documented Low: timing differences, not lost deductions.

When to get it confirmed

Ask when setting up your accounting basis and asset policy for the first time. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 20(1)–(2) and 28(1)
• Ministerial Decision No. 114 of 2023 on Accounting Standards and Methods — Art. 2 and 4
• FTA Corporate Tax Guide: Accounting Standards and Interaction with Corporate Tax — Property, plant and equipment and depreciation

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Yes, if it is a genuine business expense and documented. The way you paid does not decide deductibility; the purpose and the evidence do.

General rule

Deductibility depends on whether the expense was incurred wholly and exclusively for the business, and on records that support it.

Exceptions and conditions

• For a company, record it as an amount the company owes you (expense claim or owner loan), then reimburse or offset it.
• VAT: to recover input tax you generally need a tax invoice; ask the supplier to put the company name and TRN on it.
• Frequent mixing of personal and business payments makes it harder to show what is business.

Documents to keep

• Receipt or tax invoice
• Card statement line
• Expense claim or note of reimbursement

Risk level

Low risk if documented Low with a receipt and a clear reimbursement trail.

When to get it confirmed

Not usually needed. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 56(1)
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 55(1)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: You can record it, but it is weak. Without a receipt you need other evidence of the amount and the business purpose, and for VAT no tax invoice usually means no input tax recovery.

General rule

You must keep records that support your return and allow your taxable income to be readily ascertained. Expenses without evidence may be disallowed.

Exceptions and conditions

• Alternative evidence can help: a bank withdrawal plus a supplier confirmation, a contract, a delivery note, a photo of the receipt.
• Small, occasional amounts with a written note carry less risk than large or frequent ones.
• VAT: input tax generally requires a tax invoice (or an accepted alternative document).

Documents to keep

• Any alternative evidence
• A written note: date, supplier, amount, purpose
• Ask the supplier for a duplicate invoice

Risk level

High risk: often challenged High: undocumented cash expenses are among the first items disallowed. Failing to keep required records can also lead to an administrative penalty (AED 10,000, AED 20,000 if repeated within 24 months).

When to get it confirmed

Ask before recording large cash amounts without receipts. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 28(1), 53(3), 56(1)
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 55(1)
• Cabinet Decision No. 75 of 2023 on Corporate Tax administrative penalties, as amended — Table, item 1

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: No. Fines and penalties are not deductible. The exception is compensation awarded for damages or breach of contract, which can be deductible.

General rule

No deduction is allowed for fines and penalties, other than amounts awarded as compensation for damages or breach of contract. Bribes and other illicit payments are never deductible.

Exceptions and conditions

• Compensation you pay a client for breach of contract or damages can be deductible.
• Late payment interest or charges agreed in a commercial contract with a supplier are not a government fine; whether they are deductible depends on the contract and the facts, under the general rule.
• FTA penalties, traffic fines, municipality and free zone fines are not deductible.

Documents to keep

• Fine notice
• Contract and settlement for compensation payments

Risk level

Low risk if documented Low: the rule is clear. Record fines as non-deductible.

When to get it confirmed

Ask only for settlements that might be compensation. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 33(2) and 33(3)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Only donations to a Qualifying Public Benefit Entity listed by the Cabinet are deductible. Donations to other organisations or individuals are not.

General rule

No deduction is allowed for donations, grants or gifts made to an entity that is not a Qualifying Public Benefit Entity.

Exceptions and conditions

• Check the current official list of Qualifying Public Benefit Entities on the date of the donation: entities can be added or removed.
• Sponsorship with real advertising in return may be a marketing cost rather than a donation; it depends on the facts.
• Personal zakat paid from your own funds is personal.

Documents to keep

• Receipt from the entity
• A copy or screenshot of the official list showing the entity on the date

Risk level

Low risk if documented Low if the entity is on the list and you have the receipt.

When to get it confirmed

Ask for sponsorships or large donations. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

If you use Small Business Relief: If you elect Small Business Relief for the period, you are treated as having no taxable income, so this deduction does not change the tax for that period. Keep the records anyway: they support your revenue figure and count if you later lose or leave the relief.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 33(1) and Art. 9
• Cabinet Decision No. 37 of 2023 on Qualifying Public Benefit Entities (with the current schedule) — Art. 2 and annexed schedule

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Only if your business turnover exceeds AED 1,000,000 in a calendar year. Below that, a natural person is not subject to Corporate Tax and does not register for it.

General rule

A natural person is a Taxable Person only when the total turnover from their businesses or business activities in the State exceeds AED 1,000,000 in a Gregorian calendar year. Wages, personal investment income and qualifying real estate investment income do not count.

Exceptions and conditions

• Above AED 1,000,000: register by 31 March of the following year and file like other taxable persons; Small Business Relief may then be available.
• Turnover is gross business turnover (before expenses), across all your licensed and unlicensed business activities.
• A company (FZ-LLC, LLC) you own is a separate taxable person from day one, whatever its revenue.
• VAT has its own separate thresholds.

Documents to keep

• Record of turnover per calendar year
• Licence or freelance permit

Risk level

Low risk if documented Low if you track turnover each year.

When to get it confirmed

Ask if you are close to AED 1,000,000 or have several activities. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 11(3)(c) and 11(6)
• Cabinet Decision No. 49 of 2023 on natural persons subject to Corporate Tax — Art. 2
• FTA Decision No. 3 of 2024 on the Corporate Tax registration timeline — Art. 5
• FTA Corporate Tax Guide: Taxation of Natural Persons (CTGNP1) — Whole guide

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Possibly, if you are a UAE resident taxable person, your revenue is AED 3,000,000 or less in the period and in every previous period, you are not a Qualifying Free Zone Person or part of a large multinational group, and you elect it in the return. It now applies to tax periods ending on or before 31 December 2029.

General rule

A resident taxable person may elect to be treated as having no taxable income for a tax period when its revenue for that period and all previous periods does not exceed AED 3,000,000. Ministerial Decision No. 131 of 2026 extended the relief to tax periods ending on or before 31 December 2029 (announced by the Ministry of Finance in August 2026; check the official text on the FTA website before relying on it).

Exceptions and conditions

• Revenue means all revenue in the financial statements, not just profit and not just one activity.
• Not available to Qualifying Free Zone Persons or constituent companies of multinational groups with consolidated revenue above AED 3.15 billion.
• It must be elected for each period, in the return. You still register, file and keep records.
• While it applies, losses and disallowed net interest from that period cannot be carried forward, and other reliefs are not used for that period.

Documents to keep

• Financial statements or revenue records for every period
• Proof of residence (licence)
• The election in each return

Risk level

Medium risk: conditions and documents matter Medium: the conditions are strict and some are permanent (see the traps entry).

When to get it confirmed

Ask if your revenue is near AED 3,000,000, if you are in a free zone, or if you have more than one company. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 21(1)–(2)
• Ministerial Decision No. 73 of 2023 on Small Business Relief — Art. 2 and 3
• Ministerial Decision No. 131 of 2026 extending Small Business Relief (announcement by the Ministry of Finance, WAM, 7 August 2026) — Art. 1 (amending MD 73/2023 Art. 2(2))
• FTA Corporate Tax topic: Small Business Relief — Conditions and example

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: The main ones: exceeding AED 3 million once closes the door for later years; all revenue counts; splitting a business to stay under the threshold can be treated as abuse; and losses from relief years cannot be used later.

General rule

Eligibility looks at the current and all previous tax periods. Where the FTA establishes that a business has been artificially separated between persons and the revenue of the whole business exceeds AED 3,000,000, the relief elected is treated as an arrangement to obtain a Corporate Tax advantage; the FTA looks at valid commercial purpose and financial, economic and organisational links.

Exceptions and conditions

• One period above AED 3,000,000 (for example after an unusually large contract) makes you ineligible for all later periods.
• Tax losses incurred in a period where the relief is elected cannot be carried forward; losses from earlier periods stay on hold and can be used once you stop electing the relief.
• Being in the relief does not remove registration, return, record-keeping or arm's length obligations.
• If you exceed AED 3,000,000, the 0% band on the first AED 375,000 of taxable income still applies.

Documents to keep

• Revenue history for all periods
• Ownership details of related businesses

Risk level

High risk: often challenged High: errors here change the whole tax position.

When to get it confirmed

Ask before a large one-off sale, before opening a second company, or when revenue approaches AED 3,000,000. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Ministerial Decision No. 73 of 2023 on Small Business Relief — Art. 2, 4, 5 and 6
• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 21(2) and Art. 50
• FTA Corporate Tax topic: Small Business Relief — Example: revenue in previous Tax Periods

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Not both, and not automatically 0%. A free zone company only gets 0% on qualifying income if it meets all the Qualifying Free Zone Person conditions. A Qualifying Free Zone Person cannot use Small Business Relief.

General rule

A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income. It must maintain adequate substance, derive qualifying income, comply with arm's length rules and transfer pricing documentation, and meet other conditions. Failing a condition ends the status from the start of that period.

Exceptions and conditions

• Many service-based solo free zone companies serving mainland or individual clients have income that is not qualifying income.
• A free zone company that is not a Qualifying Free Zone Person (including one that elects under Article 19 to be taxed at the normal rates) is taxed like a mainland company and may elect Small Business Relief if eligible.
• Losing Qualifying Free Zone Person status takes effect from the start of the period in which a condition is failed, and the implementing decisions can extend the effect to later periods.

Documents to keep

• Free zone licence
• Analysis of income types and customers
• Substance evidence (premises, staff, decisions in the UAE)

Risk level

High risk: often challenged High: the choice depends on facts that a general answer cannot check.

When to get it confirmed

Have it confirmed by an FTA-registered tax agent before your first return. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 3(2), 18(1)–(3) and 19
• Ministerial Decision No. 73 of 2023 on Small Business Relief — Art. 3(2)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: 0% on the first AED 375,000 of taxable income and 9% on the part above it.

General rule

Taxable income up to AED 375,000 is taxed at 0% and the portion above at 9%, in each tax period.

Exceptions and conditions

• The threshold applies to taxable income (profit after adjustments), not to revenue.
• Splitting one business into several entities to use the 0% band several times can be treated as abuse.
• Qualifying Free Zone Persons have their own rates.

Documents to keep

• Financial statements
• Tax computation

Risk level

Low risk if documented Low.

When to get it confirmed

Not needed for the rate itself. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 3(1)
• Cabinet Decision No. 116 of 2022 on the amount of Taxable Income subject to 0% (AED 375,000) — Art. 2 and 3

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: A company incorporated on or after 1 March 2024 must register within 3 months of incorporation. A natural person over the AED 1,000,000 turnover threshold registers by 31 March of the following year. Late registration carries an AED 10,000 penalty, which can be waived if the first return is filed within 7 months of the end of the first tax period.

General rule

Every taxable person must register and obtain a Tax Registration Number within the timeline set by the FTA. The FTA can also register a person on its own initiative.

Exceptions and conditions

• Companies that existed before 1 March 2024 had deadlines based on the month their licence was issued; those dates have passed, so register now if you have not.
• Waiver: file the first tax return within 7 months from the end of the first tax period; a penalty already paid is credited back.
• Natural persons below AED 1,000,000 of business turnover do not register.

Documents to keep

• Trade licence
• Memorandum of association
• Passport and Emirates ID of the owner
• Proof of authority if someone files for you

Risk level

Medium risk: conditions and documents matter Medium: easy to fix if you act early.

When to get it confirmed

Ask if your registration is late or your first period is unusual (longer or shorter than 12 months). Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 51(1) and 51(3)
• FTA Decision No. 3 of 2024 on the Corporate Tax registration timeline — Art. 3, 5 and 6
• Cabinet Decision No. 75 of 2023 on Corporate Tax administrative penalties, as amended — Table, item 14
• FTA news (7 May 2025): waiver of the late Corporate Tax registration penalty — Conditions of the waiver

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Within 9 months after the end of the tax period, for both the return and the payment. For a calendar-year company, that is 30 September of the following year.

General rule

A taxable person must file its tax return and settle the tax payable no later than 9 months from the end of the relevant tax period. The tax period is normally the financial year.

Exceptions and conditions

• The first tax period can be shorter or longer than 12 months depending on your incorporation date and chosen financial year.
• Under Small Business Relief you still file the return (with the election) by the same deadline.
• Filing within 7 months for your first period can waive a late registration penalty.

Documents to keep

• Financial statements
• Tax computation
• Revenue figures for the Small Business Relief election

Risk level

Medium risk: conditions and documents matter Medium: late filing penalties apply monthly.

When to get it confirmed

Ask if your first period dates are unclear. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 53(1), 48 and 57

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Corporate Tax: AED 500 per month for a late return in the first 12 months, then AED 1,000 per month, plus 14% per year (charged monthly) on unpaid tax. VAT: AED 1,000 for a late return (AED 2,000 if repeated within 24 months) and 14% per year on unpaid VAT.

General rule

Administrative penalties apply automatically from the day after the deadline. Late payment penalties are calculated monthly at 14% per year on the unpaid amount.

Exceptions and conditions

• Correcting an error yourself by voluntary disclosure usually costs less than an error found by the FTA.
• The late Corporate Tax registration penalty can be waived if the first return is filed within 7 months of the end of the first period.
• VAT returns are due by the 28th day after the end of each VAT period.

Documents to keep

• Copies of returns and submission receipts
• Payment confirmations

Risk level

High risk: often challenged High: penalties add up monthly.

When to get it confirmed

Ask quickly if a deadline has passed: early action limits penalties. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Cabinet Decision No. 75 of 2023 on Corporate Tax administrative penalties, as amended — Table, items 7, 8, 9 and 14
• Cabinet Decision No. 40 of 2017 on administrative penalties for tax laws, as amended by Cabinet Decision No. 129 of 2025 (in force 14 April 2026) — Table, items 3, 8 and 9
• FTA news (7 May 2025): waiver of the late Corporate Tax registration penalty — Late registration waiver

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: You must register when your taxable supplies exceeded AED 375,000 over the previous 12 months, or will exceed it in the next 30 days. You may register voluntarily above AED 187,500 of supplies or taxable expenses.

General rule

Mandatory registration applies at the AED 375,000 threshold, looking back 12 months or forward 30 days; the application is due within 30 days of becoming required to register. The voluntary threshold is AED 187,500.

Exceptions and conditions

• The test uses a rolling 12 months, not the calendar year or tax year.
• Zero-rated supplies (for example many exports of services) count towards the threshold; exempt supplies do not.
• Late VAT registration carries an AED 10,000 penalty, and VAT is due on supplies made from the date you should have registered.

Documents to keep

• Monthly totals of taxable supplies for the last 12 months
• Contracts showing upcoming large invoices

Risk level

Medium risk: conditions and documents matter Medium: the rolling test is easy to miss in a strong month.

When to get it confirmed

Ask when you approach AED 375,000 or if you sell mostly abroad. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 13(1), 17 and 19
• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 7(1)–(2), 7(7) and 8(1)
• Cabinet Decision No. 40 of 2017 on administrative penalties for tax laws, as amended by Cabinet Decision No. 129 of 2025 (in force 14 April 2026) — Table, item 3

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Mainly: entertainment for people who are not your employees (clients, suppliers, owners), cars available for personal use, and goods or services given free to employees for their personal benefit, unless an exception applies.

General rule

Input tax is not recoverable on entertainment services for non-employees, on motor vehicles purchased, rented or leased for the business that are available for personal use, and on goods or services provided free to employees for their personal benefit.

Exceptions and conditions

• Food and drinks in the normal course of a meeting are not entertainment.
• Vehicles that are not 'motor vehicles' (trucks, forklifts), licensed taxis, emergency vehicles and rental-business cars are outside the block.
• Employee benefits are recoverable if labour law requires them, or if a contract or documented policy provides them so the employee can perform the role and this is normal business practice; health insurance for employees and their family (one spouse and up to three children under 18) is recoverable.
• Recoverable VAT is not also a Corporate Tax deduction; blocked VAT is part of the cost.

Documents to keep

• Tax invoices
• Note of who benefits (clients, staff)
• Vehicle use policy

Risk level

Medium risk: conditions and documents matter Medium: blocked VAT recovered by mistake is a common correction.

When to get it confirmed

Ask for vehicles and staff benefits. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Executive Regulation of the VAT Decree-Law (Cabinet Decision No. 52 of 2017, as amended up to 2025) — Art. 53(1)–(4)
• FTA public clarification: non-recoverable input tax on entertainment services — FTA public clarification
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 54 and 55
• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 33(7)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: Yes, if your revenue does not exceed AED 3,000,000 (or the FTA approves it in exceptional circumstances). Above that, financial statements must be on an accrual basis.

General rule

A person may prepare financial statements on the cash basis where its revenue does not exceed AED 3,000,000, or in exceptional circumstances on application. Otherwise IFRS applies, or IFRS for SMEs for revenue up to AED 50,000,000.

Exceptions and conditions

• The test is per tax period: if revenue goes above AED 3,000,000, the cash basis is no longer available on that ground.
• Cash basis still requires complete records of receipts and payments.
• Capital assets still need consistent treatment.

Documents to keep

• Record of every receipt and payment with dates
• Bank statements

Risk level

Low risk if documented Low.

When to get it confirmed

Ask when you change basis or approach AED 3,000,000. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Ministerial Decision No. 114 of 2023 on Accounting Standards and Methods — Art. 2 and 4
• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 20(1), 20(5)(a) and 20(6)

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.

In short: For Corporate Tax, keep everything that supports your return for 7 years after the end of the tax period. For VAT, the general tax procedures rule is 5 years after the tax period, with 4 extra years in a dispute or audit. Keeping everything for 7 years covers both in most cases.

General rule

A taxable person keeps all records and documents that support its tax return and allow its taxable income to be readily ascertained, for 7 years following the end of the tax period.

Exceptions and conditions

• Records are kept 4 extra years if there is a dispute with the FTA (or until it is finally settled, whichever is later) or an ongoing tax audit.
• The FTA may ask you to translate some or all records into Arabic (an approved translation).
• Digital copies are fine if they are complete and readable; SoloBooks' evidence pack helps, but you remain responsible for keeping a copy.

Documents to keep

• Invoices issued and received
• Receipts and bank statements
• Contracts and payroll
• Financial statements and returns
• Asset register

Risk level

Medium risk: conditions and documents matter Medium: failing to keep records carries an AED 10,000 penalty (AED 20,000 if repeated).

When to get it confirmed

Not needed for the rule; ask if you close or restructure the business. Who can confirm it: an FTA-registered tax agent, or the optional year-end review in SoloBooks.

Sources

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 56(1)
• Executive Regulation of the Tax Procedures Decree-Law (Cabinet Decision No. 74 of 2023, as amended) — Art. 3(1)–(2) and Art. 5
• Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 78
• Cabinet Decision No. 75 of 2023 on Corporate Tax administrative penalties, as amended — Table, items 1 and 2

Last verified: 19 October 2026 · Link to this answer

General information, not tax advice. Your situation may differ.