UAE Corporate Tax allows deduction of qualifying business expenses. Here is the comprehensive 2026 reference guide on what expenses are deductible for UAE CT purposes.
In this guide:
Generally Deductible Expenses
- Staff costs: Salaries, bonuses, benefits, gratuity (accrued) — all deductible if for business purposes
- Rent: Office, warehouse, manufacturing premises lease — deductible
- Utilities: Electricity, water, internet, phone — deductible
- Professional fees: Legal, accounting, audit, consulting fees — deductible
- Insurance: Business insurance premiums — deductible
- Marketing and advertising: Business promotion costs — deductible
- Travel (business): Flights, hotels for business purposes — deductible
- Depreciation: On qualifying business assets per UAE CT rules
Partially Deductible / Restricted Expenses
- Entertainment: 50% deductible (business entertainment only)
- Interest expense: General interest deductibility; specific EBITDA-based limitation for related party interest
- Personal expenses: Not deductible; must be clearly for business
Non-Deductible Expenses
- CT itself: UAE Corporate Tax payments are not deductible
- Fines and penalties: Not deductible (FTA penalties, MOHRE fines, traffic fines)
- Bribery and illegal payments: Not deductible
- Dividends: Not deductible (distribution of profit, not an expense)
Owner Salary Deductibility
- Owner salary: Salary paid to a director/owner is deductible if it reflects a market-rate salary for services genuinely provided
- Evidence: Document employment contract; pay via WPS; ensure salary is reasonable for services