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Entertainment expenditure

Applies
FY2024 onwards
Reviewed
Rule
UAE-CT-ENT-2024.1
By

How much entertainment spending is deductible in the UAE?

50% of spending on entertaining customers, shareholders, suppliers and other business partners is deductible.

Per Federal Decree-Law No. 47 of 2022, Article 32, Entertainment Expenditure

Subject to Article 28, a Taxable Person may deduct a published proportion of any entertainment, amusement or recreation expenditure incurred during a Tax Period for the purposes of receiving and entertaining its customers, shareholders, suppliers or other business partners.

A restriction, not a permission. Expenditure that fails Article 28 is not deductible at the restricted proportion — it is not deductible at all, because Article 32 applies subject to that article. Where the expenditure does pass Article 28, the published proportion is deductible and the balance is not.

What the restriction covers

Article 32(2) gives a non-exhaustive list. The words "including, but not limited to" are the article's own, so the list bounds nothing.

Expenditure incurred for receiving and entertaining customers, shareholders, suppliers or other business partners

  • (a) Meals
  • (b) Accommodation
  • (c) Transportation
  • (d) Admission fees
  • (e) Facilities and equipment used in connection with such entertainment, amusement or recreation
  • (f) Such other expenditure as specified by the Minister

The three words that decide most cases

Article 32(1) opens "Subject to Article 28". The restricted proportion is reached only by expenditure that is already deductible under the general rule — incurred wholly and exclusively for the Business, not capital in nature, and outside every Article 28(2) category.

Order of testing

  1. 1

    Inputs requiring your determination

    Any input a person must decide and has not decided stops the computation. An undecided input is never read as a no.

  2. 2

    Subject to Article 28

    Tested first, because Article 32 is expressly subject to it. Expenditure that is not deductible under Article 28 does not reach the restricted proportion at all.

  3. 3

    Entertainment, amusement or recreation expenditure

    Where the expenditure is not within Article 32(2), this article does not restrict it, and its deduction is decided by Article 28 and whatever else applies.

  4. 4

    Restricted proportion under Article 32

    The published proportion of the amount incurred is deductible; the balance is not. The percentage applied and its citation travel in the result.

Examples

Illustrative scenarios — ours, not the authority’s — each computed live by this rule. Change any fact and the outcome is the rule’s, not a hand-written answer.

Client hospitality through the year

A firm spends AED 600,000 on meals, hotels and transport for visiting clients. It is business expenditure, not capital, and deductible under Article 28.

Computed

Of the entertainment expenditure of AED 600,000, AED 300,000 is deductible as computed — 50% of the amount incurred, per the published value for FY2026 — with the balance of AED 300,000 not deductible, based on the figures you supplied.

Workings

Entertainment expenditure incurredArticle 32(2) — as supplied
AED 600,000
Deductible proportion appliedpublished value for FY2026, per Article 32(1)
50%
Deductible in the periodArticle 32(1), subject to Article 28
AED 300,000
Not deductiblethe balance restricted by Article 32(1)
AED 300,000

Decided by the restricted proportion under article 32

Hospitality for an exempt shareholding

AED 90,000 of entertainment incurred in the course of deriving dividend income that is Exempt Income, so Article 28(2)(b) blocks it.

Computed

No deduction for the expenditure of AED 90,000 as computed: Article 32 applies subject to Article 28, and you have indicated the expenditure is not deductible under that article. The restricted proportion is not reached.

Workings

Expenditure incurredas supplied
AED 90,000
Deductible in the periodnil — Article 32 applies subject to Article 28
AED 0

Decided by the subject to article 28

Staff catering, not client entertainment

AED 150,000 of ordinary staff catering, which the person determines is not expenditure for receiving and entertaining customers, shareholders, suppliers or business partners.

Computed

Article 32 does not restrict the expenditure of AED 150,000 as computed: you have indicated it is not entertainment, amusement or recreation expenditure within Article 32(2). Its deduction is decided by Article 28 and the other provisions that apply to it, not by this article.

Workings

Expenditure incurredas supplied
AED 150,000
Restricted by Article 32nil — outside Article 32(2), so no restriction under this article
AED 0

Decided by the entertainment, amusement or recreation expenditure

Try it

Supply the facts and this rule computes the outcome in your browser, live. Leave a determination undecided and it blocks the result — it is never read as a no.

Not computed yet

3 inputs still need your determination:

  • What is the expenditure incurred during the period?
  • Is the expenditure entertainment, amusement or recreation expenditure incurred for the purposes of receiving and entertaining customers, shareholders, suppliers or other business partners?
  • Is the expenditure deductible under Article 28?

Computed in your browser from the figures you supply. Nothing is sent anywhere, and the result is a computation against a rule — reference, not tax advice.

Thresholds

uae.entertainment_deductible_percentage
50% · reviewed 2026-09-28 · source

Threshold values are published separately from the rule and carried with a citation. Where none has been published for the period being computed, the rule reports that rather than applying a default.

Sources

Share this rule

Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader