UAE Corporate Tax Loss Carryforward Reference 2026
UAE Corporate Tax allows companies to carry forward tax losses to offset future profits. Here is the complete 2026 reference guide on UAE CT loss carryforward rules.
In this guide:
What Is Loss Carryforward?
- Tax losses: If your UAE company makes a loss in a CT year, it creates a “tax loss”
- Carryforward: UAE CT allows this loss to be carried forward to offset taxable income in future years
- No carryback: UAE CT does NOT allow losses to be carried back to prior years
UAE CT Loss Carryforward Rules
- Unlimited carry: There is no time limit on how long losses can be carried forward (unlike some countries that limit to 5 or 10 years)
- Annual cap: In any single tax year, tax losses used to offset profits are capped at 75% of taxable income in that year
- Example: If your company has AED 1 million taxable income and AED 2 million carried forward losses, you can use AED 750,000 of losses this year; remaining AED 1.25 million carries forward
Loss Transfer Within Tax Group
- Group transfer: Tax Groups can transfer losses between members to offset another member’s profits
- Condition: Transfer does not exceed the 75% cap
Pre-CT Losses
- Pre-June 2023 losses: Losses incurred before UAE CT start date generally cannot be carried forward into CT regime (no pre-CT losses as tax losses)
- Starting fresh: UAE CT starts clean; carry forward only applies to losses in CT years (financial years starting on or after June 1, 2023)