Meals, travel and gifts

Are gifts to clients deductible?

Depends on the details: keep good documents

In short: Often yes, when they have a clear business purpose (for example branded items or modest gifts to clients). Gifts that are more like hospitality may fall under the 50% rule for client meals and outings. If you are registered for VAT, also watch the 500 AED per person rule.

The basic rule

Costs that are purely for the business count. Entertaining business partners counts at 50%. Donations and gifts to an organisation that is not on the official list (official term: Qualifying Public Benefit Entity) do not count.

When it is different

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

How safe is it?

Depends on the details: keep good documents Medium: expensive gifts and gifts to people with no business link are often challenged.

When to ask a professional

Ask before giving expensive gifts or if you recover VAT on gifts. Who can confirm it for your own case: an FTA-registered tax agent (a tax professional approved by the UAE tax authority), or the optional year-end review in SoloBooks.

If you pay no Corporate Tax this year (Small Business Relief): If you use Small Business Relief this year, you pay no Corporate Tax anyway, so this cost does not change your tax for that year. Keep the documents anyway: they back up your income figure, and they matter if you stop qualifying later.

Check it with the free calculator: Small Business Relief calculator →

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

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

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