UAE New Tax Regime Allows Corporate Losses To Be Carried Forward Against Future Profits


The UAE’s Ministry of Finance has given approval for businesses to use losses (from the date of the introduction of corporate tax) incurred to reduce their taxable income in subsequent financial periods. The MoF has stated that excess tax losses can be carried forward and applied against future taxable income – as long as certain conditions are met.

According to the clarification related to the new corporate tax law – set to take effect from the first fiscal year starting on or after June 1, 2023 – tax losses from one company within a group can be used to offset taxable income from another company within the same group, subject to meeting specific requirements. Losses for corporate tax purposes – known as tax losses – will occur when the total deductions that a business is eligible to claim exceed the gross income for the relevant financial period.

The Ministry has also highlighted that a group of companies in the UAE can apply to form a tax group and be regarded as a single taxable entity, provided that specific conditions are met. By doing so, the tax group in the country will only be required to file a single tax return on behalf of the entire group.

Foreign companies in Dubai and the UAE must come into compliance with the new tax regulations, to be enforced from June 1st 2023. For tax planning assistance, please contact Dezan Shira & Associates at

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