Employee expense claims policy template for UAE companies, with VAT notes

Copy and adapt the clauses below. Keep the final policy to one or two pages; long policies are not read.

• 1. Purpose: this policy covers reasonable business expenses paid personally by employees and reclaimed from the company
• 2. Principle: claim only costs incurred wholly for company business, at reasonable cost, with an original receipt
• 3. Pre-approval: travel outside the UAE, conferences and any single item above AED 2,000 need prior written approval from your manager
• 4. Deadline: submit claims within 30 days of the expense; claims older than 90 days will not be paid
• 5. Payment: approved claims are reimbursed with the next salary or by bank transfer within 15 days

List categories explicitly. Grey areas cause most disputes.

• Claimable: taxis, Salik and parking for business trips; business mileage in a personal car at the company rate; client meals with a stated business purpose; approved travel, hotels and visas; work tools approved in advance
• Not claimable: commuting between home and the normal workplace; traffic fines; personal entertainment; alcohol unless pre-approved for client hosting; upgrades not pre-approved
• Receipts: a tax invoice or receipt showing supplier name, TRN where VAT is charged, date, amount and VAT. Card slips alone are not enough

Input VAT on business expenses paid by employees can be recoverable, but only with proper documentation. For most supplies between registrants, the VAT Executive Regulation requires a tax invoice, with simplified invoices allowed in limited cases. A missing receipt is a lost 5%.

Some expenses are blocked regardless of the receipt. Article 53 of the Executive Regulation blocks input tax on entertainment for people who are not employees, such as client meals, and on goods or services provided to employees for their personal benefit, with exceptions such as where providing them is a legal obligation. Code client entertainment separately so its VAT is not claimed.

For corporate tax, Article 32 of the Corporate Tax Law allows only 50% of entertainment expenditure as a deduction, and Article 33 makes fines and penalties non-deductible. A traffic fine reimbursed to an employee is therefore both outside the policy and outside the tax deduction.

A sales manager in Abu Dhabi submits: taxis AED 340 (no VAT on the receipts shown), a client dinner AED 630 including AED 30 VAT, a printer cartridge AED 210 including AED 10 VAT, and a parking fine AED 200.

The fine is rejected because traffic fines are on the not-claimable list. The cartridge is office supplies with AED 10 recoverable VAT. The dinner is client entertainment: AED 630 goes to the entertainment account, with the AED 30 VAT not recovered, and the expense flagged for the 50% corporate tax adjustment. Taxis are travel. Reimbursement: AED 1,180.

Staff photograph receipts in the mobile app. The AI agent reads them, including Arabic receipts, extracts supplier, TRN, VAT and amount, proposes the expense account, and marks entertainment so input VAT is not claimed. Claims route to the approver you set, and approved claims post to the ledger and to the employee’s payable balance.

You can adjust the categories and approval limits to match your own policy. Companies and partner firms that need custom approval rules or AI categorisation rules, for example by department or project, can request them by emailing hello@hellobooks.ai.