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July 2, 2026

This basic tax information bulletin outlines the regulations governing Corporate Tax Losses in the United Arab Emirates. It defines a Tax Loss as negative taxable income arising when deductible expenses exceed taxable income within a given period, excluding losses incurred prior to the June 1, 2023 effective date. The guide explains that tax losses can be carried forward indefinitely to offset up to 75% of future taxable income, subject to ownership change restrictions (the 50% rule) unless listed on a recognized stock exchange. It also details the seven mandatory legal criteria required to transfer tax losses between resident corporate entities, and highlights the impact of electing for Small Business Relief (SBR).

Basic Tax Information Bulletin

Corporate Tax Losses

1. Who should read this information bulletin?

2. What is a Tax Loss?

3. What is not a Tax Loss?

4. What relief is available for Tax Losses?

5. How does relief for carried forward Tax Losses work?

6. What are the limitations on the carry forward of Tax Losses?

7. Under what circumstances are Tax Losses forfeited?

8. What are the conditions for the transfer of Tax Losses and what is available for transfer?

9. What is the impact of electing for SBR?

10. Further information

Who should read this information bulletin?

Anyone who is responsible for the tax affairs of a Taxable Person who wants to understand:

What is a Tax Loss?
What is not a Tax Loss?
What relief is available for Tax Losses?
How does relief for carried forward Tax Losses work?
What are the limitations on the carry forward of Tax Losses?
Under what circumstances are Tax Losses forfeited?
What are the conditions for the transfer of Tax Losses and what is available for transfer?
What is the impact of electing for Small Business Relief (SBR)?

What is a Tax Loss?

For Corporate Tax purposes, a Tax Loss arises when deductible expenses exceed income that is subject to Corporate Tax in a given Tax Period. In other words, a Tax Loss is negative Taxable Income computed by adjusting Accounting Income as per the Corporate Tax Law for a given Tax Period.

What is not a Tax Loss?

Losses incurred before Corporate Tax came into effect on 1 June 2023, losses incurred before a person became a Taxable Person under the Corporate Tax Law, and losses from activities that do not result in Taxable Income (for instance, related to Exempt Income) are not Tax Losses. Losses incurred before Corporate Tax was introduced in the UAE cannot be carried forward and offset against the Taxable Income of any Tax Period.

What relief is available for Tax Losses?

A Taxable Person can carry forward Tax Losses and offset them against its own Taxable Income in future Tax Periods (see Q5). Further, it is also possible to transfer Tax Losses to another Taxable Person and offset them against its Taxable Income (see Q8).

Contents

Who should read this information bulletin?

What is a Tax Loss?

What is not a Tax Loss?

What relief is available for Tax Losses?

How does relief for carried forward Tax Losses work?