FAQ – Article 20 General Rules for Determining Taxable Income

Source: https://mof.gov.ae/corporate-tax-faq/

  1. How do you determine taxable income for UAE CT?

The taxable income for a Tax Period will be the accounting net profit (or loss) of the business, after making adjustments for certain items specified in the Corporate Tax Law.

The accounting net profit (or loss) of a business is the amount reported in its financial statements prepared in accordance with internationally acceptable accounting standards.

Adjustments to the accounting net profit (or loss) will need to be made for the following items:

  1. Unrealized gains and losses (subject to the election made regarding the application of the realisation principle);
  2. Exempt income such as qualifying dividends and capital gains;
  3. Income arising on intra-group transfers;
  4. Deductions which are not allowable for tax purposes;
  5. Transactions with Related Parties and Connected Persons;
  6. Transfers of tax losses within the group where relevant;
  7. Incentives or tax reliefs; and
  8. Any other adjustments as specified by the Minister.

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