Companies operating in the UAE frequently incur expenses related to employee travel, such as flights, accommodation, transportation, and meals. Businesses often refer to these expenses as “business trips” or “travel expenses.”
However, under the UAE VAT system, the concept of a “business trip” is not defined as a separate legal category. Instead, travel-related expenses are assessed under the general VAT rules governing business expenditure and input tax recovery.
Understanding how such expenses are treated is important for determining whether VAT incurred during employee travel can be recovered.
Federal Decree-Law No. 8 of 2017 on Value Added Tax
Cabinet Decision No. 52 of 2017 on the Executive Regulation of the Federal Decree-Law on Value Added Tax
Key principle:
For VAT purposes in the UAE, travel or business trip expenses are not regulated as a separate category. Instead, they are treated as ordinary business expenses, and the right to recover input VAT is determined under the general rules governing deductible input tax.