Audit, Accounting & Business Advisory Firm in Dubai, UAE | NR Doshi & Partners

Since 1 October 2026, a UAE business can recover input VAT on free staff benefits in six cases only, and only when every condition for that case is met. The six are staff transport, meals at remote sites, accommodation the job requires, short stays for new joiners, work phones and internet, and business parking. A contract or written policy is still the starting point, but it no longer saves a claim on its own. If you want the Decision explained clause by clause, our earlier post on FTA Decision No. 17 of 2026 covers it. This article picks up where that one stops. It shows how finance and HR teams can test their current claims, fix the paperwork and get ready for the first return under the new rules. What changed on 1 October 2026 Article 53 of the VAT Executive Regulation has long blocked input VAT on goods and services a business buys for its employees’ personal benefit. It also lists exceptions. One of them covered benefits provided under a contract or documented policy, provided t...

To calculate VAT backwards in the UAE, divide the VAT-inclusive total by 1.05. The result is the price before VAT. Subtract that figure from the total and you have the VAT amount. For example, AED 1,050 divided by 1.05 gives AED 1,000, so the VAT is AED 50. That one step solves most cases. However, many people subtract 5% from the total instead, and that gives a wrong answer. This guide shows why, walks through the method, and covers the situations where backward calculation does not apply at all. The quick answer The standard UAE VAT rate is 5%, and it stays at 5% in 2026 after the amendments in Federal Decree-Law No. 16 of 2025 took effect on 1 January 2026. Those amendments changed compliance procedures, not the rate. Here is the reverse VAT formula for the standard rate: What you want Formula Price before VAT (net) Total ÷ 1.05 VAT amount Total − Net, or Total ÷ 21 Price including VAT Net × 1.05 The "÷ 21" shortcut works because 5 is one-twenty-first of 105. It lets you p...