Input VAT Recovery in the UAE

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

Recovering input VAT — the VAT you pay on business costs — is one of the main benefits of being registered. But recovery comes with conditions, and some costs are blocked entirely. Claiming the wrong VAT is a common reason for FTA adjustments.

Conditions to recover input VAT

• You are a registered taxable person
• The cost relates to taxable (not exempt) supplies you make
• You hold a valid tax invoice
• You intend to pay, or have paid, the supplier within six months

Blocked input VAT

Some input VAT cannot be recovered even if it meets the general conditions, including:

• Entertainment provided to customers, officials or non-employees
• Motor vehicles available for personal use
• Certain employee-related costs where recovery is restricted

Apportionment for mixed use

If a cost relates partly to taxable and partly to exempt supplies, or partly to private use, you recover only the business-taxable portion. The standard method is based on the value of supplies, with a special method available in some cases.

Keep the evidence

The FTA can disallow input VAT without a valid tax invoice. Keep invoices, import documents and the audit trail for at least five years.

Frequently asked questions

Can I recover VAT on business entertainment?

Generally no. Input VAT on entertainment provided to non-employees is blocked.

Can I recover VAT on a company car?

Not if the vehicle is available for personal use. VAT on vehicles used wholly for business can be recoverable.

What do I need to recover input VAT?

A valid tax invoice, a cost that relates to your taxable supplies, and registration as a taxable person.

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