Everyday expenses
Are office rent, flexi-desk and licence renewal fees deductible?
Usually safe if you keep the documents
The basic rule
Costs that are purely for the business, and are not the purchase of a long-lasting asset (official term: not capital in nature), are taken off the profit of the year they relate to.
When it is different
- 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
How safe is it?
Usually safe if you keep the documents Low when invoices are in the business's name and the payee is unrelated.
When to ask a professional
Ask when rent is paid to yourself or a relative, or when fees cover family members. 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), 36(1) and 36(2)
- Federal Decree-Law No. 8 of 2017 on Value Added Tax (consolidated) — Art. 54 and 55
General information, not tax advice. Your situation may differ.
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