This Public Clarification clarifies the UAE VAT treatment for recovering expenses, distinguishing between 'disbursements' and 'reimbursements'. Referencing the definition of consideration in Article 1 of the VAT Law, it establishes that reimbursements, where a person acts as a principal, are subject to VAT as they form part of the consideration for a supply. In contrast, disbursements, where payments are made on behalf of another party as an agent, are considered outside the scope of VAT. The document provides key principles and examples to help taxpayers correctly classify such transactions and ensure proper VAT compliance.