Input VAT recovery is the fastest way UAE businesses lose (or gain) real money. Recover too little and you overpay; recover the wrong items and the FTA will assess penalties. Here's the practical rulebook.
When can you recover input VAT?
- You are VAT-registered with the FTA
- You hold a valid tax invoice in the business's name
- The purchase is used for making taxable supplies
- The claim is made within 5 years of the tax period the input was incurred
Blocked input VAT
- Entertainment provided to non-employees (clients, suppliers)
- Motor vehicles available for personal use
- Employee-related goods and services unless legally required (e.g. medical insurance)
Staff meals during work hours and business travel meals are generally recoverable — client entertainment is not.
Partial exemption and apportionment
If you make both taxable and exempt supplies (e.g. residential rent plus a shop), only the input VAT related to taxable supplies is recoverable. Directly attribute where possible, then apportion the rest using the standard (turnover) method or an approved special method.
Tax invoice must-haves
- The words 'Tax Invoice' clearly shown
- Supplier name, address and TRN
- Customer name, address and TRN (for supplies over AED 10,000)
- Description, quantity and VAT amount for each line
- Invoice date and, if different, date of supply
Maximise input VAT recovery — clean returns, zero FTA disallowances
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Frequently asked questions
Quick answers to common UAE vat questions.
This article is for general guidance only and reflects FTA rules as of June 2026. Always confirm your specific position with a qualified UAE tax advisor.