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HomeBlogUAE Corporate Tax Computation: Four Worked Scenarios
Corporate Tax · UAE · 2026 Guide

UAE Corporate Tax: Interest Limitation, Extraction Exemption, Article 33 and the Realisation Basis Election

Four mechanics that decide whether a UAE corporate tax computation is right or expensively wrong — each worked end to end with the correct legal authority. Includes the 5% ancillary revenue de minimis, the two limbs of the realisation basis election, and why the Article 30 cap is a “higher of” test rather than a threshold.

📅 Updated July 2026 ⏱ 16 min read 👤 Fastlane Tax Team 🏷️ Corporate Tax
Quick Answer

The UAE corporate tax interest limitation allows a deduction of the higher of 30% of adjusted EBITDA or AED 12,000,000 of net interest expenditure, with the excess carried forward up to ten tax periods. Extraction income is exempt under Article 7, including ancillary revenue up to 5% of total revenue. Fines are added back under Article 33.

Key Takeaways

4 insights · 16 min read
01

The Article 30 cap is the higher of 30% of adjusted EBITDA or AED 12,000,000 — a safe-harbour floor, not just a threshold. Disallowed interest carries forward up to 10 tax periods.

02

The extraction exemption sits in Article 4(1)(c) and Article 7, not Article 22. Ancillary income stays exempt only while it does not exceed 5% of total revenue.

03

Article 33 makes recoverable input VAT non-deductible. Irrecoverable VAT is deductible — but only to the extent the underlying expense is itself deductible.

04

Article 20(3) has two limbs. The same facts give taxable income of AED 1,900,000 or AED 1,800,000 depending on which one was elected.

In this guide The four mechanics Scenario 1: extraction exemption Extractive vs non-extractive Scenario 2: fines vs irrecoverable VAT The full Article 33 list Scenario 3: realisation basis Which limb to elect Scenario 4: interest limitation Disallowed interest and exclusions The Article 31 specific rule Deadlines, VAT and penalties Key terms explained

Four provisions account for most of the material errors we find when reviewing a UAE corporate tax computation prepared without specialist input: the extraction exemption, Article 33 non-deductible expenditure, the Article 20 realisation basis election, and the Article 30 interest limitation. Each is worked below with the numbers, the correct legal authority and the specific misreading that produces the wrong answer. Two of them turn on a detail that most summaries omit entirely. If you want the computation checked rather than explained, our corporate tax consultants in Dubai work through returns line by line before submission.

Which four corporate tax mechanics are most often miscalculated?

Extraction exemption boundaries, the fines-versus-irrecoverable-VAT distinction, the realisation basis election, and the interest limitation cap. They share a common failure mode: each has a threshold or a starting position that is easy to read past, and each error is systematic rather than one-off — whatever methodology produced it was applied across the whole computation.

The table below is the short version. Each scenario is then worked in full, including the wrong answers and why they are wrong, because in practice the wrong answer is usually the more intuitive one.

MechanicAuthorityThe detail most often missed
Extraction exemptionArticle 4(1)(c) and Article 7Ancillary income is exempt only while it stays within 5% of total revenue
Non-deductible expenditureArticle 33It is recoverable input VAT that is disallowed; irrecoverable VAT follows the underlying expense
Realisation basis electionArticle 20(3)Two separate limbs — all fair-valued items, or capital account items only
Interest limitationArticle 30The deduction is the higher of 30% of adjusted EBITDA or AED 12,000,000

Scenario 1: is ancillary income covered by the extraction exemption?

Yes — but only within a 5% limit. Take Algrax LLC: mining natural resources in Fujairah under a licence issued by the Local Government, effectively subject to Emirate-level tax, notifications made to the Ministry of Finance, revenue of AED 100,000,000 for the year to 31 December 20X8, split 98% mining and 2% ancillary activity in the same emirate. Taxable income is AED 0. The entire AED 100,000,000 is outside corporate tax.

The reason is not that ancillary income is inherently exempt. It is that Article 7 permits a Person engaged in an Extractive Business to retain the exemption on other business income where that other business is ancillary or incidental to the Extractive Business and its revenue does not exceed 5% of total revenue in the same tax period. Algrax’s ancillary revenue is AED 2,000,000 against total revenue of AED 100,000,000 — 2%, comfortably inside the limit.

This matters because the intuitive answer, AED 2,000,000 of taxable income, is wrong for the right reason and the right answer is often given for the wrong reason. Being “in the same emirate” and “connected to the mining” is not the statutory test on its own. The test is ancillary-or-incidental plus the 5% revenue cap. Push the ancillary revenue to 6% and the whole of that other business income becomes taxable — not just the excess above 5%.

ConditionAuthorityAlgrax position
Holds a right, concession or licence from a Local Government for the Extractive BusinessArticle 7(1)(a)Met — Fujairah Government licence
Effectively subject to tax under Emirate-level legislationArticle 7(1)(b)Met
Notification made to the Ministry in the agreed form and mannerArticle 7(1)(c)Met
Other business income is ancillary or incidental to the Extractive BusinessArticle 7(2)Met
Ancillary revenue does not exceed 5% of total revenueArticle 7(2)Met — 2% of AED 100,000,000
Taxable incomeAED 0

⚠️ The 5% cliff edge, and the contractor carve-out

The 5% limit is a cliff, not a taper: exceed it and the entire other-business income becomes taxable, not merely the excess. Separately, the exemption does not extend to contractors, subcontractors or suppliers engaged to perform part of the Extractive Business who do not meet the Article 7 conditions in their own right — a point that catches service companies operating inside resource projects. Have the boundary tested before you file →

What is the difference between an Extractive and a Non-Extractive Natural Resource Business?

Extraction itself sits in Article 7; everything downstream of extraction — separating, treating, refining, processing, storing, transporting, marketing or distributing natural resources — sits in Article 8, and Article 8 carries one extra condition that Article 7 does not. The Non-Extractive business must derive its income solely from Persons that undertake a Business or Business Activity.

That business-to-business restriction is the practical dividing line. A company refining or distributing natural resources that sells any material volume to end consumers falls outside the Article 8 exemption entirely, regardless of its licence or its Emirate-level tax position. Extraction companies face no equivalent customer test.

Both articles carry the same 5% ancillary revenue de minimis and both require a licence or concession from a Local Government, Emirate-level taxation and notification to the Ministry. Where a group runs both extraction and downstream activity through separate entities, each entity is tested on its own facts — and intra-group pricing between them needs to stand up, which is where a transfer pricing review belongs in the same exercise.

FeatureExtractive Business (Article 7)Non-Extractive Natural Resource Business (Article 8)
Activity coveredExtraction of natural resourcesSeparating, treating, refining, processing, storing, transporting, marketing, distributing
Local Government right, concession or licenceRequiredRequired
Effectively subject to Emirate-level taxRequiredRequired
Notification to the MinistryRequiredRequired
Income solely from businesses (B2B only)Not requiredRequired
Ancillary revenue de minimis5% of total revenue5% of total revenue

Scenario 2: are government fines and irrecoverable VAT deductible?

Fines are added back; irrecoverable VAT stays deducted. Take a company with accounting profit of AED 1,000,000 which already includes deductions for AED 200,000 of government fines and AED 500,000 of irrecoverable VAT. Taxable income is AED 1,200,000 — the fines are added back under Article 33, and the irrecoverable VAT requires no adjustment.

Article 33 lists fines and penalties as non-deductible, with one carve-out that is worth knowing: amounts awarded as compensation for damages or for breach of contract are outside the prohibition and remain deductible. A regulatory fine from a government authority is disallowed; a contractual damages settlement to a customer is not. The distinction turns on whether the payment is punitive or compensatory, not on who receives it.

The VAT position is more precisely stated than most summaries manage. Article 33 disallows recoverable input VAT — logically enough, since you get that money back from the FTA and deducting it too would be a double benefit. Input VAT you cannot recover is not addressed by that prohibition; it forms part of the cost of the underlying goods or services and follows their treatment.

LineTreatmentAmount (AED)
Accounting profit as reportedStarting point1,000,000
Add back: government finesNon-deductible — Article 33+ 200,000
Irrecoverable VATDeductible — already inside accounting profit, no adjustment0
Taxable income1,200,000
CT at 9% above AED 375,000(1,200,000 − 375,000) × 9%74,250

⚠️ “Irrecoverable VAT is fully deductible” is too strong

Irrecoverable VAT is deductible to the extent the underlying expenditure is itself deductible. Irrecoverable VAT sitting on entertainment costs follows entertainment expenditure, which Article 32 restricts to a 50% deduction — so half of that VAT is disallowed too. Irrecoverable VAT attaching to any non-deductible item is likewise non-deductible. Getting the VAT position right first is what makes the CT figure right: see VAT filing in the UAE from AED 149. Have the add-back schedule reviewed →

Which expenses are non-deductible under Article 33?

Nine categories, and most computations only ever apply two or three of them. The full list is short enough to check against every year, and doing so is faster than defending an omission later.

Note that Article 33 sits on top of the general rule in Article 28: expenditure is deductible only if incurred wholly and exclusively for the purposes of the Business and not capital in nature. An item can pass Article 33 and still fail Article 28. The add-back schedule needs to test both.

Non-deductible itemNote
Donations, grants or gifts to a non-qualifying entityDeductible only where the recipient is a Qualifying Public Benefit Entity
Fines and penaltiesExcept amounts awarded as compensation for damages or breach of contract
Bribes and other illicit paymentsNo exceptions
Dividends and profit distributions to an ownerA distribution of profit, not an expense
Amounts withdrawn from the business by a natural person taxable person or partnerDrawings, not remuneration
Corporate tax itselfUAE CT imposed under the Decree-Law
Recoverable input VATRecoverable, not irrecoverable — the distinction that trips computations
Foreign income taxRelief comes through the foreign tax credit instead
Entertainment expenditure (partial)Article 32 restricts the deduction to 50% of qualifying entertainment costs

Not sure your add-back schedule catches everything?

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Scenario 3: how does the realisation basis election change taxable income?

It depends which limb of the election was made — and on these facts the two limbs give different answers. Take ABC, a UAE regulated financial institution with profit before tax of AED 2,000,000 for the period to 31 December 20X8, including an unrealised loss of AED 100,000 on current assets and an unrealised gain of AED 200,000 on non-current assets, with no investment property election. Taxable income is AED 1,900,000 under the wide election and AED 1,800,000 under the narrow one.

Article 20(3) offers two alternatives. Under limb (a), the election covers all assets and liabilities subject to fair value or impairment accounting. Both unrealised items come out: add back the AED 100,000 loss, deduct the AED 200,000 gain, and taxable income is AED 1,900,000.

Under limb (b), the election covers only assets and liabilities held on capital account, while unrealised gains and losses on revenue account items remain in taxable income. The non-current asset gain of AED 200,000 is a capital account item and comes out; the current asset loss of AED 100,000 is a revenue account item and stays. Taxable income is AED 1,800,000.

The current-versus-non-current framing in the fact pattern is not decoration — it is the signal telling you which items sit on capital account and which on revenue account. Treating it as irrelevant is how a computation lands AED 100,000 out.

LineLimb (a) — all fair-valued itemsLimb (b) — capital account only
Profit before tax per accounts2,000,0002,000,000
Unrealised loss on current assets (revenue account)Add back + 100,000No adjustment — stays deducted
Unrealised gain on non-current assets (capital account)Deduct − 200,000Deduct − 200,000
Taxable income1,900,0001,800,000
CT at 9% above AED 375,000137,250128,250

The common wrong answer, AED 2,100,000, comes from adding back the unrealised loss without also removing the unrealised gain. Under either limb that is inconsistent: the election is symmetrical within its scope, so you cannot exclude losses while taxing gains. Cherry-picking is not available.

Which limb of the realisation basis election should you make?

Limb (a) if valuation volatility is the problem you are solving; limb (b) if you want unrealised movements on trading positions to stay inside taxable income while insulating the balance sheet. For a regulated financial institution carrying expected credit loss provisions and fair-valued instruments under IFRS 9, the difference is rarely trivial in either direction.

Two features make the choice consequential. The election is made when submitting the first tax period return, and it is irrevocable except in exceptional circumstances with the FTA’s approval. And it interacts with other first-period choices — notably the investment property depreciation adjustment, which is only available where the realisation basis has been elected.

Model both limbs against two or three years of forecast results before committing, and document the reasoning. The general rules for determining taxable income, including the realisation basis mechanics, sit in a Ministerial Decision issued under the Corporate Tax Law [VERIFY current decision reference]. For how this election feeds into fixed assets, see our guide to UAE corporate tax depreciation and the 4% rule.

Limb (a) — all fair-valued and impaired items

  • Widest scope: everything subject to fair value or impairment accounting
  • Removes valuation volatility from taxable income entirely
  • Suits investment holding and property structures
  • On the ABC facts: taxable income AED 1,900,000
  • Unrealised trading losses cannot be used until realised
  • Irrevocable from the first tax period

Limb (b) — capital account items only

  • Narrower: capital account assets and liabilities only
  • Revenue account unrealised movements stay in taxable income
  • Suits trading businesses that want symmetry on working positions
  • On the ABC facts: taxable income AED 1,800,000
  • Requires a defensible capital versus revenue classification
  • Equally irrevocable from the first tax period

Scenario 4: how is the Article 30 interest limitation calculated?

Start from taxable income before net interest, apply the cap, deduct only the allowable amount. Take Loop LLC: a new company in its first year of trading to 31 December 20X6, with EBITDA of AED 85,000,000, interest paid on business loans of AED 45,000,000, no depreciation or amortisation, and interest deductions not yet reflected in the taxable income figure. Taxable income is AED 59,500,000.

The mechanics run as follows. Adjusted EBITDA is AED 85,000,000. The cap is the higher of 30% of that figure and AED 12,000,000: 30% × 85,000,000 = AED 25,500,000, which exceeds the AED 12,000,000 safe harbour, so AED 25,500,000 is the deductible amount. The remaining AED 19,500,000 is disallowed in the current period and carried forward. Taxable income is AED 85,000,000 − AED 25,500,000 = AED 59,500,000.

The phrase “interest deductions have not yet been accounted for” is doing all the work. It tells you the AED 85,000,000 is a pre-interest figure, so you deduct the allowable interest from it. The common wrong answer of AED 104,500,000 treats AED 85,000,000 as post-interest and adds back the disallowed AED 19,500,000 — deducting nothing and adding back something, which double-counts in the wrong direction.

StepWorkingAmount (AED)
Adjusted EBITDA (pre-interest taxable income)No depreciation or amortisation in the year85,000,000
Total net interest expenditureBusiness-related loans45,000,000
30% of adjusted EBITDA30% × 85,000,00025,500,000
Safe harbour alternativeFixed de minimis amount12,000,000
Deductible interest — the higher of the two25,500,000 > 12,000,00025,500,000
Disallowed interest, carried forward45,000,000 − 25,500,00019,500,000
Taxable income85,000,000 − 25,500,00059,500,000
CT at 9% above AED 375,000(59,500,000 − 375,000) × 9%5,321,250

The cost of the misread is easy to quantify. Taxable income of AED 104,500,000 would produce corporate tax of AED 9,371,250 against the correct AED 5,321,250 — a difference of AED 4,050,000, which is simply 9% of the full AED 45,000,000 interest figure. Run your own numbers against the UAE corporate tax calculator before you accept a computation.

Run the sequence in this order every time. It is the same five-step method set out in the schema for this guide, and step one is the one most often skipped.

  1. Apply Article 31 first — strip out any related-party interest denied by the specific rule before you compute net interest expenditure for Article 30. Running the caps in the wrong order gives an answer that looks reasonable and is wrong.
  2. Identify the starting position — establish whether the taxable income figure in front of you is before or after interest. Adjusted EBITDA is taxable income before net interest, depreciation and amortisation, excluding exempt income and its related expenditure.
  3. Compute both limbs of the cap — calculate 30% of adjusted EBITDA and compare it against the AED 12,000,000 safe harbour. The deductible amount is the higher of the two, not simply the percentage.
  4. Deduct the allowable interest — take the allowable amount off the pre-interest figure. Do not add back the disallowed portion to a figure that already excludes all interest.
  5. Carry forward the disallowed amount — record it as a carried-forward attribute deductible in the following ten tax periods, subject to the cap in each of them, and track it on the return every year.

Common corporate tax computation errors

Treating the AED 12,000,000 as a threshold — it is a safe-harbour floor, so low-EBITDA businesses can still deduct up to AED 12,000,000.

Adding back disallowed interest to a pre-interest figure — the single most expensive misread in the four scenarios.

Citing Article 22 for the extraction exemption — it lives in Article 4(1)(c) and Article 7; Article 22 deals with exempt income such as dividends.

Treating the 5% ancillary limit as a taper — exceed it and the whole other-business income becomes taxable, not just the excess.

Adding back irrecoverable VAT — Article 33 disallows recoverable input VAT; irrecoverable VAT follows the underlying expense.

Not identifying which limb of Article 20(3) was elected — the same facts give different taxable income under each.

Cherry-picking unrealised items — the realisation basis is symmetrical within its scope; you cannot exclude losses and tax gains.

What happens to disallowed interest, and who sits outside Article 30?

Disallowed net interest expenditure is carried forward and can be deducted in the following ten tax periods, subject to the same cap in each of those periods. It is not lost, and it is not added to current-period taxable income — it becomes a deferred deduction that has to be tracked on the tax return year after year.

Loop LLC’s AED 19,500,000 therefore sits as a carried-forward attribute. If next year’s adjusted EBITDA supports headroom above the year’s own interest charge, part of the brought-forward amount is absorbed. Companies with sustained high leverage relative to earnings frequently never absorb it, which is a reason to model the cap before structuring the debt rather than after.

Several categories sit outside the general rule altogether: banks, insurance providers and natural persons undertaking a business, together with other persons determined by the Minister. There is also grandfathering for interest on debt instruments concluded before 9 December 2022, and specific treatment for qualifying infrastructure projects, set out in the relevant Cabinet Decision [VERIFY current decision reference]. Loop LLC, as a new trading company, benefits from none of these — and as a first-year filer it should confirm its corporate tax registration and tax period are correctly recorded before any of this is computed.

FeaturePosition under Article 30
Deduction limitThe higher of 30% of adjusted EBITDA or AED 12,000,000
Adjusted EBITDATaxable income before net interest, depreciation and amortisation, excluding exempt income and its related expenditure
Disallowed amountCarried forward up to 10 subsequent tax periods
Excluded personsBanks, insurance providers, natural persons carrying on a business, and others determined by the Minister
GrandfatheringDebt instruments concluded before 9 December 2022
Related-party debtTested separately under the Article 31 specific rule

What is the Article 31 specific interest deduction limitation rule?

It is a purpose-based rule that can deny an interest deduction outright, before the Article 30 cap is even reached. Where a loan is obtained directly or indirectly from a Related Party and the funds are used for a dividend or profit distribution, a redemption or reduction of share capital, a capital contribution, or the acquisition of an ownership interest in a person who is or becomes a Related Party, the interest is non-deductible unless the taxable person can demonstrate that the main purpose, or one of the main purposes, was not to obtain a corporate tax advantage.

The order of operations matters. Article 31 is applied first to strip out interest that fails the purpose test; whatever survives then enters the Article 30 computation as net interest expenditure. Running the calculations the other way round produces an answer that looks reasonable and is wrong.

The safe harbour is that no corporate tax advantage is deemed to arise where the Related Party lender is subject to corporate tax, or to a tax of a similar character at a rate of at least 9%, on the corresponding interest income. In practice this puts the emphasis on documentation: intra-group loan agreements, board approvals evidencing commercial purpose, and evidence of the lender’s tax position. That documentation overlaps heavily with what a transfer pricing file already needs to contain.

How do these four mechanics fit your filing deadlines and VAT position?

All four are declared in the same annual corporate tax return, due within nine months of the end of the tax period. Three of the four also depend on elections or notifications made earlier, which is why a computation review shortly before the deadline is often too late to change the answer.

The VAT link runs through Article 33. Irrecoverable input VAT only enters the corporate tax computation correctly if the VAT position was assessed correctly in the first place — an over-claimed input tax recovery understates irrecoverable VAT and therefore understates the CT deduction, while an under-claimed recovery does the reverse. Registration thresholds are unchanged for 2026: mandatory above AED 375,000 of taxable supplies, voluntary from AED 187,500, with returns due within 28 days of the end of the tax period. See VAT registration in the UAE from AED 199. Smaller companies should also check whether Small Business Relief is the better answer: it is available for tax periods ending on or before 31 December 2026 where revenue does not exceed AED 3,000,000, and is not available to Qualifying Free Zone Persons or members of multinational enterprise groups.

Groups with substantial interest charges should also check whether the top-up tax rules bite: consolidated group revenue thresholds bring large multinational groups into a separate regime alongside the 9% rate. Our guide to the UAE DMTT and Pillar Two scope covers which groups are affected.

ObligationDeadline / thresholdPenalty position
Corporate tax returnWithin 9 months of the end of the tax periodPenalties under Cabinet Decision 75/2023, as amended by 10/2024
First-period elections (Article 20)With the first tax period returnIrrevocable except in exceptional circumstances
Extraction exemption notificationTo the Ministry, in the agreed form and mannerExemption unavailable without it
CT deregistrationWithin the prescribed period from cessationAED 1,000 per month, capped at AED 10,000
VAT return (VAT 201)Within 28 days of the end of the tax periodAED 1,000 first offence; AED 2,000 repeat within 24 months
VAT paymentSame 28-day deadline14% per annum, charged monthly (Cabinet Decision 129/2025)

Corporate tax computation terms explained

Five of these terms are defined in the Corporate Tax Law itself, and using them loosely is how a computation drifts. These are the ones that carry weight across all four scenarios.

TermWhat it means
Extractive BusinessExploring, extracting, removing or otherwise producing and exploiting natural resources in the UAE
Non-Extractive Natural Resource BusinessDownstream activity — separating, treating, refining, processing, storing, transporting, marketing or distributing
Adjusted EBITDATaxable income before net interest, depreciation and amortisation, excluding exempt income and related expenditure
Net Interest ExpenditureInterest expenditure for the period, less interest income, before the Article 30 cap is applied
Capital accountAssets and liabilities not held for sale, trade or exchange in the ordinary course of business
Revenue accountAssets and liabilities that are not held on capital account — broadly, trading positions
Realisation basisAn Article 20(3) election to recognise gains and losses only when realised
Recoverable input VATInput tax reclaimable from the FTA — non-deductible for corporate tax under Article 33
Irrecoverable input VATInput tax that cannot be reclaimed; deductible to the extent the underlying expense is deductible
Related PartyPersons connected by ownership, control or kinship as defined in the Corporate Tax Law

Have the whole computation checked — every add-back, election and cap

Article 28, 32 and 33 add-backs, Article 20 elections, Article 30 and 31 interest limitation, exemption boundaries, then filed.

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FAQ

Frequently Asked Questions About UAE Corporate Tax Computations

No. Article 33 of Federal Decree-Law No. 47 of 2022 lists fines and penalties as non-deductible expenditure, so they must be added back to accounting profit. There is one carve-out: amounts awarded as compensation for damages or for breach of contract fall outside the prohibition and remain deductible. The test is whether the payment is punitive or compensatory, not who receives it.
Yes, but not without limit. Article 33 disallows recoverable input VAT, on the logic that it is reclaimed from the FTA. Input VAT that cannot be recovered forms part of the cost of the underlying goods or services and is deductible to the extent that the underlying expenditure is itself deductible. Irrecoverable VAT attaching to entertainment costs, for example, follows the 50% restriction in Article 32.
Net interest expenditure is deductible up to the higher of 30% of adjusted EBITDA or AED 12,000,000 in a tax period. Adjusted EBITDA is taxable income before net interest, depreciation and amortisation, excluding exempt income and its related expenditure. The AED 12,000,000 figure is a safe-harbour floor rather than merely a threshold, so a business with low EBITDA can still deduct up to AED 12,000,000.
It is carried forward and can be deducted in the following ten tax periods, subject to the same cap in each of those periods. It is not lost and it is not added to current-period taxable income. On the Loop LLC facts, AED 19,500,000 of disallowed interest becomes a carried-forward attribute that has to be tracked on the return each year until it is absorbed or expires.
Yes, within a limit. Article 7 allows a Person engaged in an Extractive Business to keep the exemption on other business income where that business is ancillary or incidental to the extraction and its revenue does not exceed 5% of total revenue in the same tax period. The 5% limit is a cliff rather than a taper: exceed it and the entire other-business income becomes taxable, not just the excess.
Article 4(1)(c) treats a Person engaged in an Extractive Business meeting the Article 7 conditions as an Exempt Person, and Article 7 sets out those conditions. Article 8 covers Non-Extractive Natural Resource Businesses and adds a further requirement that income must be derived solely from persons undertaking a business. Article 22 is a different provision entirely, dealing with exempt income such as dividends.
It removes them from taxable income until realised, symmetrically. Article 20(3) offers two limbs: limb (a) covers all assets and liabilities subject to fair value or impairment accounting, and limb (b) covers only assets and liabilities held on capital account, leaving revenue account movements inside taxable income. On identical facts the two limbs can produce different taxable income, so the limb elected must be identified before computing.
Not automatically. Article 31 denies the deduction where a related-party loan funds a dividend or profit distribution, a redemption or reduction of share capital, a capital contribution, or the acquisition of an ownership interest in a related party, unless the main purpose was not to obtain a corporate tax advantage. No advantage is deemed to arise where the lender is subject to tax at 9% or more on the corresponding interest income. Article 31 is applied before the Article 30 cap.
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These four mechanics account for most of the material errors we see in corporate tax computations prepared without specialist review. The interest limitation misread alone — treating a pre-interest EBITDA figure as though it were post-interest — moves taxable income by the full interest charge, which on a leveraged balance sheet runs into millions of dirhams. If your return was prepared in-house without a tax agent review, have the computation verified before the assessment window closes.

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