UAE foreign tax credit calculator
UAE resident companies taxed on foreign income can deduct the foreign tax paid on it from their UAE corporate tax, but only up to the UAE tax due on that same income. Any excess foreign tax is lost: it cannot be refunded or carried forward.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- UAE tax on the foreign income
- AED 45,000.00
- Foreign tax credit
- AED 45,000.00
- Foreign tax not creditable
- AED 15,000.00
- UAE corporate tax payable
- AED 38,250.00
Unused foreign tax credit cannot be carried forward or refunded. Keep the foreign tax certificates.
Results are estimates for general information, not tailored advice.
Credit on AED 500,000 of foreign income
UAE-source income of AED 800,000.
| Foreign tax paid | Foreign tax credit | Foreign tax not creditable | UAE corporate tax payable |
|---|---|---|---|
| AED 20,000 | AED 20,000.00 | AED 0.00 | AED 63,250.00 |
| AED 45,000 | AED 45,000.00 | AED 0.00 | AED 38,250.00 |
| AED 100,000 | AED 45,000.00 | AED 55,000.00 | AED 38,250.00 |
The credit can never exceed the UAE tax on the same income (9% here).
How the credit is limited
The credit for each item of foreign income is the lower of the foreign tax actually paid and the UAE corporate tax attributable to that income. With profits above AED 375,000, the UAE tax on extra foreign income is 9%, so foreign tax above 9% goes unrelieved.
Evidence and treaties
Keep tax certificates or assessment notices from the foreign authority. Where a double tax treaty reduces withholding tax abroad, claim the treaty rate first; the UAE only credits tax that was properly payable. A UAE tax residency certificate is usually needed to claim treaty rates.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
Frequently asked questions
Can unused foreign tax credit be carried forward in the UAE?
No. Any foreign tax above the UAE tax on the same income is lost.
Does the UAE have double tax treaties?
Yes, over 140, including with the UK, India and most of Europe.
Corporate tax registration and returns
We register you, prepare the tax computation and file your corporate tax return, with Small Business Relief, QFZP and loss elections handled correctly.