Definition

Operating Expenses are recurring business costs required to run daily operations, such as salaries, rent, utilities, and software subscriptions.

Key Points

• Fully deductible for UAE Corporate Tax unless disallowed
• Recorded in the profit and loss statement
• Different from capital expenditure, which is depreciated
• Directly reduces accounting profit

Example

A company pays AED 10,000 monthly for office rent. This is classified as an Operating Expense.