Visa, Permit and Recruitment Costs: What a UAE Company Can Deduct

• 11 November, 2026
• By the Exiloz tax team
• Corporate Tax

Last reviewed 11 November 2026 by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.

Deductible, until the fines get mixed in

Visa, work permit and recruitment costs are deductible for UAE Corporate Tax when they are incurred wholly and exclusively for your business. That is the general rule in Article 28 of Federal Decree-Law No. 47 of 2022. The exceptions are where companies lose money, and fines are the biggest one. Experienced corporate tax advisory support separates the two before filing.

Most companies book every hiring cost to one expense line and never look again. That works until the return is reviewed and the fines are sitting inside it. This guide covers what is deductible, what is not and how the timing works in practice. It also covers probation transfers and the costs you cannot legally pass on to your staff.

Are visa and work permit costs deductible for Corporate Tax?

Yes, in most cases, because hiring staff is part of running the business. Article 28 allows expenditure incurred wholly and exclusively for the business, provided it is not capital in nature. Entry permits, residence visas, work permits, medical tests and Emirates ID fees for staff qualify.

They are also not capital in nature, because they recur with each hire and each renewal. The deduction still depends on evidence: receipts, the employee's file and the payroll record. A cost you cannot tie to a named employee is much harder to defend.

Quick Answer

Visa, work permit, medical and Emirates ID costs for staff are generally deductible under Article 28. Keep the receipts linked to each named employee so the deduction can be evidenced.

Which hiring-related costs are not deductible?

Fines and penalties are the main exclusion. Article 33 of the Corporate Tax Law disallows them, apart from compensation for damages or breach of contract. Late renewal fines, overstay fines charged to the company and labour violation fines therefore cannot reduce taxable income at all.

Costs that are not for the business also fail Article 28, such as visas for an owner's relatives booked through the company. Where a cost serves two purposes, only the business part is deductible. The rest must be added back in the Corporate Tax computation.

Quick Answer

Fines and penalties, including late renewal and overstay fines, are never deductible for UAE Corporate Tax. Personal costs such as visas for an owner's relatives must always be added back.

Can recruitment costs be charged to the employee instead?

No. Article 6 of Federal Decree-Law No. 33 of 2021 prohibits the employer from charging the worker recruitment and employment fees and costs. That applies whether the charge is made directly or hidden in a salary deduction or an end-of-service settlement.

So these costs sit with the company, and the tax deduction belongs to the company as well. A contract clause recovering visa costs from someone who resigns early creates a real labour risk. It does not create a recoverable asset worth defending in a labour dispute or tax review.

Quick Answer

UAE employers cannot charge recruitment or employment costs to their workers, directly or indirectly. The cost stays with the company, which is also exactly where the Corporate Tax deduction sits.

What about compensation paid for a probation hire?

If you hire someone still in probation with another UAE employer, Article 9 of the labour law applies. The new employer compensates the original employer for recruitment costs, unless they agree otherwise. That payment is simply a cost of recruiting your new employee into the business.

In our view it is deductible like any other recruitment cost, because it is incurred to staff your business. Get an invoice or a signed settlement letter from the original employer first. Without that paper, the payment looks like a gift to another company.

Quick Answer

Compensation paid to a previous UAE employer for a probation hire is, in our view, a deductible recruitment cost. Support it with an invoice or settlement letter from that employer.

When is the deduction taken?

In the tax period the cost is incurred, under Article 28, and your accounts decide the timing. Corporate Tax starts from accounting income, so the treatment in your financial statements usually carries through. Prepayments covering two years should be spread across the period they cover.

Take an illustrative company that hires four staff and pays AED 24,000 in visa costs. It also pays AED 2,000 in late renewal fines that year. The full AED 24,000 is deductible, saving AED 2,160 at 9%, while the AED 2,000 must be added back.

Quick Answer

The UAE deduction follows your accounts, in the period the cost is incurred. Spread multi-year prepayments over their period, and the 9% rate only applies above the AED 375,000 band.

Frequently Asked Questions

Main Takeaways

Visa, permit, medical and recruitment costs for staff are generally deductible under Article 28. Fines and penalties are never deductible and must always be added back in the computation. You cannot charge hiring costs to employees, so the deduction stays with the company. Keep each receipt linked to a named employee, and follow your accounts for the timing of deductions.

Separate the Fines Before You File

Hiring costs are some of the easiest deductions to defend, as long as the paperwork exists. The real risk is not the visas themselves. It is the fines mixed into the same ledger line, and the personal costs quietly booked through the company accounts. Both reduce taxable income when they should not, and an FTA review finds them very quickly.

Split your hiring costs into three groups before year-end: deductible costs, fines and personal items. Our guide to non-deductible expenses for Corporate Tax covers the full add-back list in plain language. Link every receipt to a named employee in the payroll records, including renewals. Exiloz can review the ledgers and prepare a Corporate Tax computation that holds up under review.

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