Corporate Tax deductions for home office expenses in UAE

In the United Arab Emirates, expenses that are not of a capital nature and are incurred wholly and exclusively for the purposes of the taxable person’s business are generally tax deductible. 

However, certain expenses may be disallowed or restricted to ensure that relief can only be obtained for expenses incurred for the purpose of generating taxable income and to address possible situations of abuse or excessive deductions.

It is important to note that personal expenses incurred are not considered deductible expenses.

What are the requirements for claiming home office expenses as tax deductions in UAE?

To claim home office expenses as tax deductions in UAE, the following requirements must be met:

1. The expenses must be wholly and exclusively incurred for business purposes.

2. The expenses must be legitimate in nature and incurred during the ordinary course of business to derive taxable income.

3. If you conduct a trade other than employment or you are mainly a commission earner, certain home office expenses which are not ordinarily allowed as a tax deduction to salaried employees (e.g. phone costs, stationery, printing, etc.) may be claimed as a tax deduction, provided that these expenses have been incurred in the production of your commission (or other) income and for the purposes of your trade.

4. If you are a salaried employee, you may only claim the following expenses as a tax deduction: rent of the premises, cost of repairs to premises, and any other expenses in connection with the premises, such as interest on a bond, rates and taxes, levies, electricity, and cleaning costs (e.g. domestic worker’s salary).

5. It is important to note that not all home office expenses can be claimed as a tax deduction, and only those expenses that meet the above requirements are deductible as per the UAE Corporate Tax Law.

If you have any further clarifications about Corporate Tax deductions for home office expenses, please don’t hesitate to get in touch with us for a more detailed consultation.