Net interest is deductible only up to the higher of 30% of adjusted EBITDA or the AED 12,000,000 safe harbour. See how much you can deduct now and how much carries forward (up to 10 years).
Adjusted EBITDA = taxable income before net interest, depreciation and amortisation, with the relevant tax adjustments.
Net interest deductible this period
AEDÂ 6,000,000 is disallowed and carried forward (up to 10 years).
Need the tax itself? Open the Corporate Tax Calculator to apply the 0% / 9% rates to your final taxable income.
The General Interest Deduction Limitation Rule (GIDLR) caps how much net interest a business can deduct in a tax period. The calculation runs in three steps:
The AED 12M safe harbour means most small and mid-sized companies are never restricted. The 30% EBITDA cap bites mainly on highly leveraged businesses. Once you have your final taxable income, apply the 0% / 9% rates with the Corporate Tax Calculator.
Under Article 30 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 126 of 2023, a taxable person can deduct net interest expenditure only up to the higher of 30% of adjusted EBITDA or the AED 12,000,000 safe-harbour amount. Net interest is interest expense less taxable interest income.
Net interest of AED 12,000,000 or less is always fully deductible, regardless of EBITDA. The 30% EBITDA cap only becomes relevant once net interest exceeds AED 12M — and even then, you use whichever limit is higher.
Net interest that exceeds the allowable limit is disallowed in the current period but can be carried forward and deducted in the subsequent 10 tax periods, subject to the same limitation each year.
The General Interest Deduction Limitation Rule does not apply to banks, insurance providers, or natural persons carrying on a business. Specific anti-abuse rules may still apply to related-party interest.
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Disclaimer: This is a general planning estimate for the UAE General Interest Deduction Limitation Rule, not tax advice. Adjusted EBITDA, related-party interest, and group rules can change the outcome. Confirm your position with the Federal Tax Authority or a qualified UAE tax adviser. See our full disclaimer.