# Client entertainment and UAE corporate tax: calculator

> For UAE corporate tax, only 50% of expenses on entertaining customers, shareholders, suppliers and other business partners is deductible. The other 50% is added back to taxable income, which costs 9% of the add-back (4.5% of the total spend) once profits are above AED 375,000.

Interactive calculator: https://www.countify.ae/tools/entertainment-expense-calculator · Updated 2026-10-14 · Countify UAE

## Extra tax on client entertainment

Taxable income already above AED 375,000.

| Entertainment spend | Non-deductible (50%) | Extra corporate tax |
| --- | --- | --- |
| AED 20,000 | AED 10,000.00 | AED 900.00 |
| AED 80,000 | AED 40,000.00 | AED 3,600.00 |
| AED 200,000 | AED 100,000.00 | AED 9,000.00 |

Effectively 4.5% of the spend when profits are above AED 375,000.

## What counts as entertainment

Entertainment includes meals, drinks, hospitality, accommodation, transport and admission to events provided to people outside the business, plus gifts. Costs of entertaining employees are generally fully deductible, though they may be a taxable benefit in some cases.

- Client dinners and business lunches: 50% deductible
- Event tickets for customers: 50% deductible
- Staff party: normally 100% deductible

## VAT is stricter

Input VAT on client entertainment is blocked in full, so you cannot reclaim the 5% VAT on a client dinner. Keep entertainment in its own ledger account so both adjustments are easy at year end.

## Legal basis

- Federal Decree-Law No. 47 of 2022, Article 32 (https://mof.gov.ae/corporate-tax/)

## Frequently asked questions

### Is client entertainment deductible in the UAE?

50% is deductible for corporate tax. Input VAT on it is not recoverable at all.

### Are staff meals entertainment?

Generally no. Staff entertainment and meals are usually fully deductible.