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United Arab EmiratesVAT & Corporate TaxUpdated: Sep 13, 2026
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Direct Answer
Under Article 32 of the UAE Corporate Tax Law, expenses for entertaining customers, suppliers, or business partners are only 50% deductible. You must explicitly separate these from standard marketing expenses in your ledger.
What Constitutes Entertainment?
The law classifies meals, accommodation, transportation, and admission to events provided to non-employees as entertainment.
Accounting Ledger Setup
To ensure compliant tax filing, accountants must create a dedicated Business Entertainment (50% Disallowable) chart of account.
If you host a client dinner for 2,000 AED:
- 1,000 AED is a deductible business expense.
- 1,000 AED is disallowed and added back to your taxable income during the CT computation. Note: Employee entertainment (like staff parties) remains 100% deductible.