''UAE CT: Deductible, Allowable & Entertainment Expenses Explained''

In this video, we dive into the UAE Corporate Tax (CT) framework to explore deductible, allowable, and entertainment expenses. Navigating these expense categories is essential for businesses in the UAE aiming to optimize tax liabilities and remain compliant. Whether you’re a business owner, finance professional, or tax advisor, this guide will help clarify which expenses can legally reduce your tax burden.

💼 What You’ll Learn in This Video:

Introduction to Deductible and Allowable Expenses: An overview of what qualifies as deductible and allowable under UAE Corporate Tax, including why understanding these categories is vital for tax planning.
Detailed Breakdown of Deductible Expenses: We go through specific types of deductible expenses like employee salaries, office rent, equipment costs, and utility bills, highlighting how each can be accounted for in your tax filings.
Allowable Expenses Defined: Learn about expenses that are allowable under certain conditions, such as partially deductible items and industry-specific costs.
Understanding Entertainment Expenses: Entertainment expenses are often complex in tax calculations. We explain what qualifies as entertainment, what portions are deductible, and common restrictions.
Practical Examples: Real-world examples that show how to categorize expenses, ensuring compliance with UAE tax laws while maximizing deductible allowances.
Common Mistakes to Avoid: Discover common errors businesses make when claiming expenses and tips for avoiding costly penalties or rejections.

🌍 Who Should Watch This Video?

Business Owners and Entrepreneurs: If you’re looking to minimize tax costs legally, this guide to deductible expenses is essential.
Finance & Accounting Professionals: Enhance your understanding of UAE tax law and help clients or companies achieve compliant, cost-effective tax filings.
Tax Advisors: Stay up-to-date on UAE Corporate Tax guidelines and give your clients the best advice on deductible and allowable expenses.

📈 Why This Video Matters:

Understanding what qualifies as a deductible or allowable expense under the UAE Corporate Tax Law can save your business money and prevent non-compliance penalties. From office supplies to employee entertainment, managing expenses correctly is crucial for accurate tax reporting and efficient financial planning.

💼 What We Cover in This Video:

Overview of Deductible and Allowable Expenses: Learn the basic principles of deductible and allowable expenses as outlined in the UAE Corporate Tax laws.
Types of Deductible Expenses: A breakdown of common deductible expenses, such as salaries, rent, office supplies, and other essential business costs.
Allowable Expenses Explained: Insight into expenses that are partially allowable or require specific conditions to be deductible.










Article 28 of the UAE Corporate Tax law:
1. Expenditure incurred wholly and exclusively for the purposes of the Taxable Person’s Business that is not capital in nature shall be deductible in the Tax Period in which it is incurred.
2. No deduction is allowed for (i) Expenditure not incurred for the purposes of the Taxable Person’s Business (ii) Expenditure incurred in deriving Exempt Income. (iii) Losses not connected with or arising from the Taxable Person’s Business.
3. If expenditure is incurred for more than one purpose, a deduction shall be allowed (i) Any identifiable part or proportion of the expenditure incurred wholly and (ii) An appropriate proportion of any unidentifiable part or proportion of the expenditure incurred to derive Taxable Income that has been determined on a fair and reasonable basis exclusively to derive Taxable Income

Article 30 of the Corporate Tax Law:
A Taxable Person’s Net Interest Expenditure shall be deductible up to 30% (thirty percent) of the Taxable Person’s accounting earnings before the deduction of interest, tax, depreciation and amortisation (EBITDA) for the relevant Tax Period, excluding any Exempt Income

Article 32 – Entertainment Expenditure: Entertainment expenses are allowed 50%

Article 33 – Non-deductible Expenditure
No deduction is allowed for the following expenses:
Donations, grants or gifts unless given to Qualifying Public Benefit Entity
Fines and penalties unless paid for compensation for damages or breach of contract.
Bribes or other illicit payments
Dividends, profit distributions or benefits paid to an owner
Amounts withdrawn from the Business by a natural businessperson
Corporate Tax imposed
Recoverable input tax (non recoverable tax is allowed)
Tax imposed out of the UAE
Any other expense specified by the Cabinet

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