Can I recover VAT on staff medical insurance?

Article 53 – Non-recoverable Input Tax 33 1. Input Tax shall be non-recoverable if it is incurred by a Person in the following cases: a. Where the Person is not a Government Entity as specified in a Cabinet Decision in accordance with Article 10 and 57 of the Decree-Law, and there is provision of entertainment services to anyone not employed by the Person, including customers, potential customers, officials, or shareholder or other owners or investors. b. Where motor vehicles were purchased, rented or leased for use in the Business and are available for personal use by any Person. c. Where Goods or Services were purchased to be used by employees for no charge to them and for their personal benefit including the provision of entertainment services, except in the following cases: 1) Where the provision of those Goods or Services to the employees is mandatory under the applicable labour legislation in the State or any free zone, including financial and non-financial free zones, provided that this does not include the accommodation provided by the employer to its employees, unless the provision of such accommodation is mandatory pursuant to the decisions or directives issued by the Ministry of Human Resources and Emiratisation.34 2) Where it is a contractual obligation or documented policy to provide those Goods or Services to the employees, in accordance with the cases and 33 Article amended as per Cabinet Decision No. 100 of 2024. 34 Sub-clause amended as per Cabinet Decision No. 149 of 2026. Cabinet Decision No. 52 of 2017 and its amendments – As published by the Ministry of Finance 42 conditions specified by the Authority.35 3) Without prejudice to Clause 1 of this paragraph, where the Taxable Person provides health insurance, including enhanced health insurance, to its employees and their family members (as applicable) up to a husband or one wife, and three children younger than eighteen years. 4) Where the provision of goods or services is a deemed supply under the provisions of the Decree-Law. 2. For the purposes of this Article: a. The phrase “entertainment services” shall mean hospitality of any kind, including the provision of accommodation, food and drinks which are not provided in a normal course of a meeting, access to shows or events, or trips provided for the purposes of pleasure or entertainment. b. The phrase “motor vehicle” shall mean a road vehicle which is designed or adapted for the conveyance of no more than 10 (ten) people including the driver. A motor vehicle shall exclude a truck, forklift, hoist or other similar vehicle. 3. Provision of catering and accommodation services shall not be treated as entertainment services where it is provided by a transportation service operator, such as an airline, to passengers who have been delayed. 4. A motor vehicle shall not be treated as being available for private use if it is within any of the following categories: a. a taxi licensed by the competent authority within the State; b. a motor vehicle registered as, and used for purposes of an emergency vehicle, including by police, fire, ambulance, or similar emergency service; c. a vehicle which is used in a vehicle rental business where it is rented to a customer.

Article 31(2) of the Executive Regulation relating to حيث تم،الالئحة التنفيذية المتعلق بالوجود داخل الدولة presence in the UAE. The word “or” has been ."استبدال حرف العطف "أو" بحرف العطف "و replaced with “and”. Consequently, a person with a short-term presence فإن الشخص الذي يتواجد في الدولة لمدة قصيرة،وبالتالي in the UAE of less than a month is only regarded as تقل عن شهر يعتبر خارج الدولة فقط إذا لم يكن هذا being outside the UAE if this presence is not ، فعلى سبيل المثال،التواجد مرتبطا ً بشكل فعال بالتوريد effectively connected with the supply, e.g. if the إذا تواجد الشخص في الدولة لقضاء عطلة قصيرة أو person is in the UAE for a short holiday or transits مروره عبر الدولة في رحلته لدولة أخرى ولم تكن لديه through the UAE and does not have any meetings .أية اجتماعات متعلقة بالتوريد خالل زيارته للدولة related to the supply while in the UAE. ضريبة المدخالت غير القابلة لالسترداد – الفقرة (ج) من Non-recoverable input tax – Article 53(1)(c) )53( ) من المادة1( البند Employers are, generally, not entitled to recover ال يحق ألصحاب العمل استرداد ضريبة،بشكلٍ عا ّم input tax incurred to provide free goods or services المدخالت المتكبدة لتوفير سلع أو خدمات مجانية to employees for their personal benefit, unless one وذلك ما لم تنطبق إحدى،للموظفين ولمنفعتهم الشخصية of the exceptions under Article 53(1)(c) of the ) من المادة1( االستثناءات الواردة في الفقرة (ج) من البند .) من الالئحة التنفيذية53( Executive Regulation applies. The sub-clauses of Article 53(1)(c) of the Executive أُعيد ترقيم الفقرات الفرعية المدرجة تحت الفقرة (ج) من Regulation were renumbered to accommodate the ) من الالئحة التنفيذية لمراعاة53( ) من المادة1( البند new exception relating to medical insurance supplied االستثناء الجديد المتعلق بالتأمين الصحي ال ُمقدّم .للموظفين to employees. Article 53(1)(c)(3) of the New Executive Regulation ) من1( ) من الفقرة (ج) من البند3( تسمح الفقرة الفرعية allows VAT registered employers to recover VAT ) من الالئحة التنفيذية الجديدة ألصحاب العمل53( المادة incurred to provide health insurance to their المسجلين لضريبة القيمة المضافة باسترداد ضريبة القيمة employees and employees’ families (if applicable), المضافة المتكبدة لتوفير التأمين الصحي لموظفيهم regardless of whether there is a legal obligation to وذلك بغض النظر عما إذا كان،)وأسرهم (بحسب الحال .هناك التزام قانوني بتقديم مثل هذا التأمين الصحي أم ال provide such health insurance or not. The health insurance can be provided directly, or يمكن توفير التأمين الصحي بشكل مباشر أو غير مباشر indirectly through a health insurer, and includes ويشمل ذلك التأمين،من خالل شركة تأمين صحي 27/37