# Can I claim Software Subscriptions as a business expense in United Arab Emirates?

**Yes, fully claimable.** Yes, SaaS subscriptions used in the business are fully deductible against Corporate Tax. VAT recoverable on UAE-supplied software at 5%; reverse charge applies to non-UAE supplied digital services. Annual plans paid in advance are spread across the months they cover when the accounts are prepared.

Typical amount: AED 10,000 – AED 50,000 per year A business with only a few seats can sit below that range and one with a large engineering team will be above it.

## What Federal Tax Authority (FTA) says

Software subscriptions are ordinary trading expenses. Reverse charge VAT applies to digital services from non-UAE suppliers: record both output and input VAT (net zero) on the VAT return. Where a supplier outside the UAE provides the software, the UAE business accounts for 5 percent VAT under the reverse charge in the same return and recovers it as input tax if the business makes taxable supplies. Software bought outright for a long period is a capital asset, so it is depreciated and not expensed at once.

## When you can claim

- Monthly/annual SaaS (Slack, Notion, Adobe, Xero)
- Cloud hosting (AWS, Azure, GCP)
- Domain names and website hosting
- Stock photography, design assets
- Cybersecurity, backup and password management tools
- Accounting, payroll and e-invoicing tools used by the finance team
- Collaboration and video meeting tools

## When you cannot claim

- Personal subscriptions (Netflix, personal use Spotify)
- Mixed-use subscriptions without apportionment
- Software bought outright above capitalisation threshold
- Software licences held in a shareholder's personal name and used outside the business
- Subscriptions for a related company that should be recharged to that company

## Good to know

**Pro tip:** Keep a register of subscriptions with the supplier, country, cost and users. The register shows which invoices come from a UAE supplier with VAT and which need the reverse charge.

**Important:** Domain names and web hosting follow the same rule. A free zone company that is not VAT registered cannot recover input VAT, so the VAT becomes part of the cost.

Source: https://tax.gov.ae/en/taxes/corporate.tax.aspx

## Related expenses

- [Professional Services](https://accounts-os.com/ae/expenses/professional-fees-ae)
- [Office Rent / Flexi-Desk Fees](https://accounts-os.com/ae/expenses/office-rent-ae)
- [Depreciation on Plant & Equipment](https://accounts-os.com/ae/expenses/depreciation-ae)