Definition

Tax Loss Transfer allows UAE companies within the same group to transfer tax losses between entities, provided ownership and control conditions are met.

Key points

• Maximum offset: 75% of taxable income of the recipient company.
• Both companies must be UAE resident entities.
• Losses from exempt income cannot be transferred.

Practical example

Subsidiary A has a loss of AED 200,000, Subsidiary B has taxable income of AED 500,000. B can use A’s loss to reduce taxable income to AED 300,000.

Why it matters

Encourages group efficiency and supports loss-making entities in the UAE.