A tax loss in one year can reduce taxable income in later years, within limits and conditions set by the law.
Key facts from the law
Tax Losses carried forward may reduce Taxable Income by up to 75% of the Taxable Income of the period, before Tax Loss reliefCorporate Tax Law, Art. 37
Carried-forward losses need continuity of ownership (or the same or similar business)Corporate Tax Law, Art. 39
Each point is checked against the text of the law or FTA guide held by TI.
Yes. If your business makes a tax loss, you can carry it forward and use it to reduce taxable profit in future years, up to 75% of that year's profit, as long as you keep proper records.
A Tax Loss may be offset against Taxable Income of future Tax Periods, limited to 75% of that period's Taxable Income before loss relief (Article 37(1)-(2), Corporate Tax Law).
Any unused Tax Loss must be carried forward and set off before a later loss can be carried forward further or transferred (Article 37(4), Corporate Tax Law).
Where Small Business Relief is elected for a Tax Period, losses incurred in that period cannot be carried forward (Article 4, Ministerial Decision No. 73 of 2023).
75% of your taxable income for that year can be offset by carried forward losses — and you must use that full 75%; you cannot choose to use less to save losses for later. Oldest losses are used first.
Tax Losses are offset against Taxable Income of subsequent Tax Periods, capped at 75% of that Taxable Income before any loss relief (Article 37(2)).
A carried forward Tax Loss must be set off against Taxable Income before any remainder can be carried forward further (Article 37(4)).
Carry forward and use is allowed only if the same persons continuously held at least a 50% ownership interest through the loss and offset periods, and the Taxable Person continued the same or similar Business after a more-than-50% ownership change (Article 39(1)).
No. UAE corporate tax losses can only be carried forward to reduce future taxable income, not back to earlier years.
A Tax Loss can be offset against the Taxable Income of subsequent Tax Periods, up to 75% of that period's pre-relief Taxable Income.
Carried-forward losses can only be used where continuity of at least 50% ownership and continuation of the same or similar business are maintained, unless the Taxable Person is listed on a Recognised Stock Exchange.
Losses incurred before Corporate Tax commencement, before becoming a Taxable Person, or from exempt income/activities cannot be relieved at all.
Not automatically. You only lose the right to carry forward tax losses if ownership changes by more than 50% AND the business itself changes significantly - if you keep running the same or a similar business, the losses survive.
Tax Losses may only be carried forward where the same person(s) continuously held at least 50% ownership from the start of the loss period to the end of the period of utilisation, and the business or activity continued to be the same or similar following any change of more than 50% ownership.
Factors relevant to whether the business remains the same or similar include continued use of the same assets, no significant change to the core identity or operations, and any changes arising only from development of pre-existing assets, services or methods.
This ownership-continuity limitation does not apply to a Taxable Person whose shares are listed on a Recognised Stock Exchange.
Yes. One group company's tax loss can be used to reduce another group company's taxable profit, but only if they meet conditions like 75% common ownership - you'll need to check your group structure and file an election.
Article 38 allows a Tax Loss to be offset against another Taxable Person's Taxable Income if the listed ownership, residency, exemption-status, financial-year and accounting-standard conditions are all met.
Within a Tax Group, pre-Grouping losses of a joining subsidiary can only offset Taxable Income attributable to that subsidiary, and are used before other carried-forward Tax Group losses.
A Tax Group is treated as a single Taxable Person, so it can itself transfer or receive losses under Article 38 as if it were one company, per FTA guidance. Based on FTA guidance
Guidance only, not tax advice. Answers were drafted by TI from the FTA’s published law and last updated on 15 September 2026; rely on the official text and a registered tax agent before you file.