UAE Corporate Tax on Donations and Charitable...

Person holding a cardboard box labelled Donations, illustrating company donations and charitable contributions under UAE Corporate Tax

14 min read

Every year, UAE companies give money to mosques, schools, hospitals, food drives, Ramadan campaigns and community causes. Many finance teams then book the whole amount as an expense and assume it reduces the tax bill. Under Corporate Tax, that assumption can be wrong. Whether the donation is deductible depends on who received it, not on how generous or well-intended it was.

This guide is for UAE business owners, finance managers and accountants. It follows Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, the Federal Tax Authority (FTA) General Corporate Tax Guide (CTGGCT1) and the FTA guide on Exempt Persons (CTGEPF1). Every article number below was checked against the published text. Where the official sources say nothing, we say so instead of guessing.

Published: 24 October 2026

Quick Answer

A donation, grant or gift is deductible for UAE Corporate Tax only when it is made to a Qualifying Public Benefit Entity (QPBE) that is listed in a Cabinet Decision. Article 33(1) of Federal Decree-Law No. 47 of 2022 says no deduction is allowed for donations, grants or gifts made to an entity that is not a QPBE. The FTA guide on Exempt Persons confirms the other side: a Taxable Person who gives to a listed QPBE can claim a deduction. So a gift to a charity that is not on the list is added back to your accounting profit, and the tax at 9% is calculated on the higher figure. The legal text we reviewed sets no percentage cap on a donation to a listed QPBE.

The Law in Plain Words

Four articles do most of the work.

Article	What it says	What it means for a donor
Article 20	Taxable Income starts from accounting income, then tax adjustments are made	Your donation is already in the accounts as an expense. Tax adds it back if it is not allowed
Article 28	Expenditure incurred wholly and exclusively for the business, and not capital in nature, is deductible	The general test for every expense
Article 9	Defines the Qualifying Public Benefit Entity and its conditions	Tells you what kind of recipient can ever qualify
Article 33(1)	No deduction for donations, grants or gifts to an entity that is not a QPBE	The rule that decides most donation cases

Article 33 sits in the list of non-deductible expenditure. The same list includes fines and penalties, bribes, dividends and profit distributions, Corporate Tax itself, recoverable input VAT and tax paid on income outside the State. Donations to non-QPBEs share that list, so the FTA treats them as a straightforward add-back, not a grey area.

Who Counts as a Qualifying Public Benefit Entity

Article 9 of the Decree-Law sets out the conditions. An entity must be established and operated exclusively for one of these purposes:

religious, charitable, scientific, artistic, cultural, athletic, educational, healthcare, environmental, humanitarian or animal protection purposes, or other similar purposes; or
as a professional entity, chamber of commerce or similar body operated exclusively for the promotion of social welfare or public benefit.

It also must not carry on a business activity except activities directly related to its purpose, must use its income and assets only for that purpose, and must not pay any part of its income or assets for the personal benefit of a shareholder, member, trustee, founder or settlor (unless that person is itself a QPBE, a Government Entity or a Government Controlled Entity).

Meeting those conditions is not enough. Article 9 defines a QPBE as an entity that meets the conditions and is listed in a Cabinet Decision issued at the suggestion of the Minister of Finance. The list was first published in Cabinet Decision No. 37 of 2023 and can be amended. Our guide to the QPBE exemption explains how an organisation gets listed, so we do not repeat that here.

The practical point for a donor is simple: a charity-sounding name, a licence from a municipality or a religious purpose does not make the recipient a QPBE. The listing does.

Deductible or Not: A Quick Decision Table

Situation	Deductible?	Reason
Cash donation to an entity listed as a QPBE	Yes	Article 33(1) does not block it; FTA guide confirms the deduction
Cash donation to a charity, mosque or school that is not listed	No	Article 33(1)
Donation to a foreign charity not on the Cabinet list	No	It is not a QPBE
Donation to an individual in need	No	An individual is not a QPBE
Donation to a crowdfunding campaign run by a private person	No	No QPBE recipient
Staff welfare payment to your own employees	Usually yes, as an ordinary business cost	It is not a donation; the Article 28 test applies
Marketing sponsorship of an event with real advertising in return	Generally yes if wholly and exclusively for the business	It is a business expense, not a donation. 50% rule may apply to hospitality
Gift to a customer	Depends; may be entertainment (50%) or marketing	See the entertainment section below

Treat the last three rows as the starting point of your analysis, not a guarantee. The FTA looks at the facts of each payment.

Worked Example

Alpha Trading LLC has accounting profit of AED 1,000,000 before donations. During the year it gives:

AED 40,000 to a charity listed as a QPBE; and
AED 25,000 to a community fund that is not listed.

Both amounts were booked as expenses, so accounting profit is AED 935,000 after them. For tax, the AED 25,000 is added back under Article 33(1). The AED 40,000 stays deducted. Taxable Income before other adjustments is AED 960,000. Tax is 9% on the amount above AED 375,000, which is AED 52,650.

If the company had assumed both gifts were deductible, it would have under-reported Taxable Income by AED 25,000 and under-paid AED 2,250. The sum is small. The risk is that the same habit repeated across several years and several donations creates a pattern the FTA will question in an audit. This example uses round numbers for illustration only.

What About a Cap?

Many websites say donations are limited to a percentage of profit or revenue. We checked Federal Decree-Law No. 47 of 2022 (Articles 28 and 33), the FTA General Corporate Tax Guide and the FTA Exempt Persons guide. None of them sets a percentage cap on donations to a listed QPBE. The Exempt Persons guide says only that a deduction can be claimed for gifts to a listed QPBE.

The honest position is therefore:

We found no statutory cap in the official sources reviewed.
The general Article 28 test still applies, so a payment that is not incurred for the business can be challenged.
If a future Cabinet or Ministerial decision introduces a limit, it will apply from its effective date. Check the FTA website before you file.

If you have read a specific cap somewhere, ask for the decision number. A rule that cannot be tied to a decision number is not a rule you can rely on.

Step by Step: Checking a Recipient Before You Pay

Get the full legal name of the recipient as it appears in its licence, not the name used in advertising.
Search the current list of Qualifying Public Benefit Entities published by the Ministry of Finance and the FTA. Check the original Cabinet Decision No. 37 of 2023 and every later amendment.
Confirm the entity, not a campaign. A listed foundation may run many campaigns, but a separate fundraiser using its name may not be the foundation.
Save the evidence. Keep a dated screenshot or copy of the list entry, the payment proof and the receipt.
Record the status in the ledger. Use a separate account for “Donations to listed QPBEs” and another for “Other donations (non-deductible)”. That makes the tax add-back automatic at year end.
Recheck each year. The list can change. An entity listed in one Tax Period may later be removed if it stops meeting the conditions.

Documents to Keep

The Decree-Law does not prescribe a donation form. What it does require, under Article 56, is that a Taxable Person keeps records for seven years after the end of the Tax Period. Those records must support the Tax Return and allow the FTA to ascertain Taxable Income. For a donation, a sensible file contains:

the bank transfer or cheque copy;
the receipt or acknowledgement from the recipient, with its legal name and licence number;
the board or management approval;
the evidence that the recipient was on the Cabinet list at the time of payment;
the ledger entry that shows which account the payment went to.

For the full list of what the FTA expects, see our record-keeping requirements guide. Penalties for missing records are covered in our guide to Corporate Tax penalties.

Sponsorships: Donation or Marketing?

A sponsorship is a payment in return for something: logo placement, event naming rights, advertising, a stand, tickets. If the main purpose is to promote your business and you receive real marketing value, the payment is more likely to be an ordinary business expense tested under Article 28, not a donation under Article 33.

If you give money and receive nothing, the payment looks like a donation. If the recipient is not a QPBE, Article 33(1) disallows it, whatever the invoice calls it. Calling a gift “sponsorship” on paperwork does not change its nature.

Keep the sponsorship agreement, the proof of what was delivered (photos of banners, ad copies, attendee lists) and the invoice. If part of the package is hospitality for your clients, that part falls under the entertainment rule in the next section.

Gifts in Kind and Gifts to Customers

Gifts in kind to a charity. Goods or services given free to a listed QPBE are still a “gift” under Article 33(1). The official sources we reviewed do not give a separate valuation rule for them, so record the item at its accounting cost, document the recipient’s acknowledgement, and ask your tax adviser how it interacts with VAT, which is a separate tax with its own rules.

Gifts to customers, suppliers and partners. These are not donations. They are business gifts. If they fall under entertainment, amusement or recreation, Article 32 allows only 50% of the cost as a deduction, subject to Article 28. Our guide to entertainment expenses explains where the line sits, with examples. A plain promotional item with your logo is more likely a marketing cost; a luxury hamper to a client is more likely entertainment. Judge each item on its facts.

Employee gifts and welfare. Payments to your own staff are normally employment costs. They must still meet the wholly and exclusively test. If a worker of yours is hurt on the job, Yalah Dubai explains what a UAE employer must pay after a work injury.

Donations Made Through Owners, Directors or Related Parties

Article 36 deals with payments to Connected Persons, meaning owners, directors, officers and their Related Parties. Such payments are deductible only to the extent they match the Market Value of a service or benefit received and are wholly and exclusively for the business. A donation has no service in return.

In our reading, a gift to a charity that your owner or director controls deserves extra care, because the recipient may be a Connected Person as well as a charity. This is our interpretation, not a quote from the FTA. If this situation applies to you, get advice before filing. Our guide to connected persons explains the definitions.

If an owner gives personally and the company reimburses him or her, the reimbursement is not a company donation and cannot be treated as one without proper analysis.

Free Zone Companies and Donations

The deduction rules above apply to every Taxable Person, including a Qualifying Free Zone Person, when calculating Taxable Income. A donation that is not deductible does not become deductible because the company sits in a free zone. If a free zone company earns both qualifying and non-qualifying income, cost allocation matters and should be reviewed with the rest of the return. Our QFZP guide explains the regime.

Common Mistakes

Assuming every charity is a QPBE. Only entities listed in a Cabinet Decision qualify.
Relying on a receipt alone. A receipt proves payment. It does not prove the recipient’s QPBE status.
Booking donations to “general expenses”. This hides the add-back and creates errors at year end.
Treating a sponsorship with no return benefit as marketing. Substance decides.
Reimbursing an owner’s personal donation through the company. The company’s tax position is not the owner’s.
Not rechecking the list. A recipient’s status can change.
Believing a cap exists. Quote the decision number or do not apply the cap.
Forgetting that VAT is separate. A donation’s Corporate Tax treatment says nothing about VAT on gifts of goods.
No ledger separation. Without separate accounts, the tax adjustment is guesswork.

Frequently Asked Questions

Are donations tax deductible in the UAE under Corporate Tax?

Yes, but only when the recipient is a Qualifying Public Benefit Entity listed in a Cabinet Decision. Under Article 33(1) of Federal Decree-Law No. 47 of 2022, a donation, grant or gift to any other entity is not deductible.

Can a company deduct a donation to a mosque, school or hospital?

Only if that specific entity is on the Cabinet list of Qualifying Public Benefit Entities. Its purpose, its licence or its name is not enough. Check the list before you pay.

Is there a maximum amount a company can deduct for donations?

We found no percentage cap in the Decree-Law, the FTA General Corporate Tax Guide or the FTA Exempt Persons guide. The general Article 28 test still applies. Check for new decisions before filing.

What happens to a donation to a non-listed charity at tax time?

It is added back to your accounting profit under Article 33(1). Your Taxable Income goes up, and the 9% rate applies to the higher figure above the AED 375,000 threshold.

Are donations to foreign charities deductible?

Not unless the foreign organisation is itself listed as a QPBE. An overseas charity that is not on the Cabinet list is not a QPBE, so Article 33(1) denies the deduction.

Is a donation to an individual or a family in need deductible?

No. An individual is not a Qualifying Public Benefit Entity, so Article 33(1) applies.

Is a sponsorship deductible?

It can be, if it is wholly and exclusively for the business and you receive real marketing value. A payment that gives you nothing in return looks like a donation and follows Article 33(1). Hospitality inside a sponsorship may be limited to 50% under Article 32.

Do I need a receipt from the charity?

The law does not name a specific document, but Article 56 requires records that support your return for seven years. A receipt, the transfer proof and evidence of the recipient’s listed status together make a strong file.

Do gifts to customers count as donations?

No. They are business gifts. Entertainment-type gifts are deductible at 50% under Article 32. Promotional items may be marketing costs. Each case depends on its facts.

Can a company donate and then claim the deduction if the owner chose the charity?

The owner’s choice does not change the test. The recipient must be a listed QPBE. If the charity is controlled by the owner or a related party, Article 36 on Connected Persons may also apply, and you should take advice.

Is the charity that receives my donation taxed on it?

A listed QPBE is exempt from Corporate Tax under Article 9 and has its own registration and declaration duties. Our QPBE exemption guide covers the recipient side.

How long should I keep donation records?

Seven years after the end of the Tax Period to which they relate, under Article 56 of the Decree-Law.

Need Help Reviewing Your Donations Before You File?

If you want a second pair of eyes on how your donations, sponsorships and gifts are booked before your Corporate Tax return, message Qaspro Global on WhatsApp: https://wa.me/971551539679.

Sources: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Articles 9, 20, 28, 32, 33, 36 and 56), Ministry of Finance; Federal Tax Authority General Corporate Tax Guide (CTGGCT1), section 6.5.5; Federal Tax Authority Corporate Tax Guide on Exempt Persons: Public Benefit Entities, Pension Funds and Social Security Funds (CTGEPF1), section 4.2; Cabinet Decision No. 37 of 2023 on Qualifying Public Benefit Entities. This article is general information, not tax advice for your specific facts.

Written by Muhammad Qasim FCCA
Founder & CEO, Qaspro Global — UAE tax expert with 16+ years of experience in VAT, corporate tax and FTA audit support.

UAE Corporate Tax on Donations and Charitable Contributions 2026: What a Company Can Deduct and Which Recipients Qualify