UAE interest limitation calculator
Net interest expenditure is deductible up to the higher of AED 12 million or 30% of adjusted taxable EBITDA. Anything above that is disallowed for the year and can be carried forward for up to 10 years. Most SMEs are covered by the AED 12 million de minimis and unaffected.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
Interest expense minus interest income.
- Deductible limit
- AED 15,000,000.00
- Interest deductible this year
- AED 15,000,000.00
- Disallowed, carried forward (up to 10 years)
- AED 5,000,000.00
Results are estimates for general information, not tailored advice.
Deductible interest with EBITDA of AED 50 million
Limit: the higher of AED 12m and 30% of EBITDA (AED 15m).
| Net interest | Interest deductible this year | Disallowed, carried forward (up to 10 years) |
|---|---|---|
| AED 8,000,000 | AED 8,000,000.00 | AED 0.00 |
| AED 14,000,000 | AED 14,000,000.00 | AED 0.00 |
| AED 20,000,000 | AED 15,000,000.00 | AED 5,000,000.00 |
Banks, insurers and individuals are outside these rules.
How the rule works
Net interest expenditure is interest expense (including amounts economically equivalent to interest) minus interest income. Adjusted taxable EBITDA is taxable income with net interest, depreciation and amortisation added back. Banks, insurance providers and natural persons are outside the rule.
- Deductible = min(net interest, max(AED 12m, 30% × EBITDA))
- Excess: carried forward up to 10 years
- Related party interest has its own restriction first
Before the general rule
Interest on related party loans used for certain transactions (dividends, capital contributions, share buy-backs) is disallowed under a specific rule before the general limit applies. Transfer pricing also applies to related party interest rates; see the transfer pricing checker.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
Frequently asked questions
Does the interest limitation rule affect small businesses?
Rarely. Net interest of AED 12 million or less is always deductible.
How long can disallowed interest be carried forward?
Up to 10 tax periods, used first-in, first-out.
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.