FTA Decision No. 17 of 2026

FTA Decision No. 17 of 2026, effective 1 October 2026, defines when VAT-registered businesses can recover input tax on free employee benefits provided under a contract or documented policy.

A contract clause or HR policy alone is no longer enough. The expense must fall into one of six cases and meet every condition for that case. The cases are work-related transportation, food and beverages (only for remote or isolated locations), operationally necessary accommodation, temporary accommodation for new joiners (up to 30 days), mobile phones and internet, and business-related parking fees.

Common conditions include no cash-allowance alternative, a genuine business purpose, minimal personal benefit, documented policies, monitoring and proper records. Expenses outside these cases are generally not recoverable unless required by labour law.

The Decision is silent on apportionment and on what happens when a new joiner's stay exceeds 30 days. Businesses should map employee costs to the six cases, update policies, keep tax invoices and receipts, and plan for periods straddling the effective date. The Arabic text prevails over the English translation.