Is client entertainment deductible for UAE corporate tax?
Half of it. Article 32 of Federal Decree-Law No. 47 of 2022 allows a deduction of 50% of entertainment, amusement or recreation spending on customers, shareholders, suppliers or other business partners, including meals, accommodation, transport, admission fees and facilities used for the entertainment. The other half is added back to taxable income.
On this page
What it does not cover
Entertainment of the company's own staff is not within Article 32, which is about receiving and entertaining business partners. Ordinary staff welfare costs are dealt with under the general deduction rules.
Why categories matter
To apply the 50% limit, entertainment must be identifiable in the accounts. Mixing client dinners with site welfare in one expense code makes the adjustment guesswork.
How SupaJack Construct helps
The tax module calculates corporate tax on taxable income with the AED 375,000 zero band and 9% above it, and treats client entertainment as 50% non-deductible. Taxable income starts from the ledger the projects post to, so job costs, certificates and payroll already sit in the accounts.
Related tools and guides
See the answers on the corporate tax rate, small business relief, the corporate tax return deadline, carrying tax losses forward and whether fines are deductible, plus finance and VAT in SupaJack Construct, the VAT guide for contractors and the construction accounting software page.
Worked example
A contractor spends AED 80,000 hosting clients and consultants in a year. It can deduct AED 40,000. The other AED 40,000 is added back, increasing corporate tax by AED 3,600 if its profit is above the zero band.
Questions people ask
What share is deductible?
50%.
Are client meals included?
Yes, meals are listed.
Is staff welfare entertainment?
Article 32 covers business partners, not the company's own staff.