Office pods and UAE corporate tax
A pod bought for your business is a capital asset, and its cost is deductible against taxable income through depreciation over the asset's useful life. This page sets out how that works in practice, with a worked example. It is general information rather than tax advice, so confirm your own position with your tax adviser.
Equipment rather than a fit-out
The distinction worth understanding is between money spent on the premises and money spent on equipment the business owns. A fit-out becomes part of the leasehold improvement, is tied to the building, and is written off over the term of the lease or the life of the improvement, whichever your accounting policy sets. It also stays behind when you move.
A FocusPod is furniture. It sits on the floor, it is not attached to the structure, it needs no fit-out approval, and it moves with you. It is carried as a fixed asset of the business and depreciated over its useful life, and that depreciation is the deductible expense.
The practical consequence is not only tax. A pod is an asset you still own if you change buildings, where a fit-out is spend you cannot take with you.
How the deduction works
UAE corporate tax applies at 9% on taxable income above AED 375,000, with a 0% band below that. Depreciation on a pod used for the business reduces taxable income in the periods over which it is charged, in line with your accounting treatment of the asset.
Two things to check with your adviser. If your business has elected small business relief, it is treated as having no taxable income for that period, so a deduction has no immediate effect. And if you are in a free zone with qualifying income, the analysis is different again. Neither changes what the pod is; they change what the deduction is worth to you.
A worked example
Take a FocusPod Meet, the four-person meeting pod, with installation. The pod is AED 36,900 and installation is AED 4,000, so the capitalised cost is AED 40,900.
| Line | Amount |
|---|---|
| Capitalised cost, deducted through depreciation | AED 40,900 |
| Corporate tax relief across the asset's life | about AED 3,681 |
| Effective cost of the pod | about AED 37,219 |
The relief is spread across the periods in which depreciation is charged rather than taken in one year, so the timing depends on the useful life your accounting policy applies. VAT is dealt with separately and is normally recoverable by a registered business on a purchase for business use.
Price the pod you actually want
Every FocusPod has a glass front and rear, built-in wheels and adjustable levelling feet.
Two things to get right
Keep the pod off the fit-out invoice. If a pod is bought inside a wider fit-out contract, have it itemised separately so it is clearly a moveable asset rather than a leasehold improvement. Our quotations list the pod, freight and installation as separate lines for exactly this reason.
Keep the records together. Hold the approved specification, the invoice and the delivery record with your fixed asset register. If the pod later moves to another building, that paperwork is what shows it is the same asset.
Common questions
Is an office pod a capital asset or an expense?
A pod is a capital asset carried on the balance sheet, and the deduction comes through depreciation rather than as an immediate expense. Your adviser confirms the useful life applied under your accounting policy.
Is a pod treated differently from a fit-out?
Yes, in substance. A fit-out is tied to the premises and usually written off over the lease. A freestanding pod is a moveable asset that remains yours when you change buildings, which is also why it does not need fit-out approval.
Can we recover the VAT?
A VAT-registered business buying a pod for business use would normally recover the input tax in the usual way. Your quotation sets out the VAT separately so the treatment is clear.
Does small business relief change anything?
If you have elected small business relief for the period you are treated as having no taxable income, so a deduction has no immediate value. It does not change what the pod is, only what the relief is worth in that period. Your adviser will confirm.
What about several pods across offices?
Each pod is itemised on the quotation, which keeps the fixed asset register and the depreciation straightforward even where pods sit in different buildings or emirates.
Ask for it itemised
Build the configuration you want, then ask for the quotation itemised the way your finance team prefers: pod, freight and installation as separate lines, with VAT and any duties shown separately.
This page is general information for UAE businesses and is not tax, accounting or financial advice. Rates, thresholds and reliefs change, and free zone and small business positions differ. Confirm the current position with your tax adviser before relying on any figure here.