Can tax losses be carried forward under UAE corporate tax?
Yes. Article 37 of Federal Decree-Law No. 47 of 2022 lets a tax loss be offset against taxable income of later tax periods, but the offset in any one period cannot exceed 75% of that period's taxable income before loss relief. Losses from before corporate tax started, or from exempt activities, cannot be used.
On this page
Order of use
A loss carried forward must be used against the next period's taxable income before any remainder moves on. Losses transferred from a group company under Article 38 come after the company's own losses.
Small business relief years
Losses incurred in a period where small business relief is elected cannot be carried forward at all, under Ministerial Decision No. 73 of 2023.
How SupaJack Construct helps
The tax module calculates corporate tax on taxable income with the AED 375,000 zero band and 9% above it, and treats client entertainment as 50% non-deductible. Taxable income starts from the ledger the projects post to, so job costs, certificates and payroll already sit in the accounts.
Related tools and guides
See the answers on the corporate tax rate, small business relief, the corporate tax return deadline, carrying tax losses forward and whether fines are deductible, plus finance and VAT in SupaJack Construct, the VAT guide for contractors and the construction accounting software page.
Worked example
A contractor loses AED 1,000,000 in 2026 and earns taxable income of AED 800,000 in 2027. It can offset 75% of 2027's income, AED 600,000. It pays tax on AED 200,000, which is within the zero band, so no tax. AED 400,000 of loss carries to 2028.
Questions people ask
Is there a time limit?
Article 37 sets no expiry, only the 75% cap.
Can pre-2023 losses be used?
No. Losses before corporate tax started cannot be relieved.
Can a relief-year loss be carried?
No, if small business relief was elected that year.