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Can you claim VAT on restaurant billsin the UAE?

Last reviewed

Can you recover the VAT?
Depends
VAT charged
5%
Corporate tax
Depends

Usually blocked for client meals and team dinners. Recoverable for meals on business trips.

When you can claim the VATand when it's blocked

You can claim

  • Recoverable for meals an employee buys for their own subsistence on a business trip, and for modest working meals in the normal course of a meeting.

You can't claim

  • Client meals are entertainment and blocked.
  • Free meals for staff are a personal benefit and blocked unless required by contract or documented policy.

Worked examplesand why they land that way

  1. Recoverable

    Dinner alone during a business trip in Sharjah

    Meals an employee buys for themselves while traveling on business are subsistence, not entertainment. The 5% is recoverable with the restaurant's tax invoice.

  2. Blocked

    Lunch with a prospect

    Blocked, 50% deductible.

    Meals for people outside the company are entertainment, so the VAT is blocked. For corporate tax, 50% of the cost is deductible.

  3. Blocked

    Team dinner after a launch

    A free meal for staff is a personal benefit, so the VAT is blocked. The full cost is deductible for corporate tax as a staff cost.

What to keepand what to watch

Documents you need

Tax invoice with TRN (simplified tax invoice fine under AED 10,000). Note attendees and purpose.

Corporate tax

Depends. Client meals are 50% deductible. Staff meals and travel subsistence are deductible.

GL account: Meals: travel subsistence / Entertainment: client / Staff welfare

Common mistakes

Claiming VAT on every restaurant bill because the merchant category says 'restaurant'.

Questions peopleask about this

Is every restaurant bill blocked?

No. Meals an employee buys for their own subsistence on a business trip, and modest working meals in the normal course of a meeting, are recoverable.

What should I note on the receipt?

Who attended and why. A tax invoice with the TRN is needed too, and a simplified tax invoice is fine under AED 10,000.

How much of a client meal is deductible?

50% for corporate tax. Staff meals and travel subsistence are deductible in full.

Relatedexpenses

Rules thisanswer relies on