UAE Implements New VAT Recovery Rules for Staff Housing

The UAE is set to introduce significant changes to how businesses manage their tax claims regarding employee accommodation. Under Cabinet Decision No. 149 of 2026, the rules for VAT recovery on staff housing will be tightened starting 1 October 2026.

This amendment to the existing VAT Executive Regulation means that the ability to claim VAT recovery is no longer a universal benefit for all companies providing accommodation. Instead, it will be strictly tied to whether the housing is a legal mandate.

The MoHRE Mandate: When Recovery is Allowed

According to the new regulations, companies can only reclaim VAT on