Definition

Tax Depreciation is the deduction allowed under UAE Corporate Tax for the wear and tear of business assets over time. It may differ from IFRS depreciation.

Key Points

• Reduces taxable income
• Applied to qualifying assets used in the business
• Calculated based on tax rules, not just accounting policy
• Must be documented and supported in tax filings

Example

A machine costing AED 300,000 is depreciated for tax at 20% per year, resulting in AED 60,000 deductible expense annually.