UAE – Interest Deduction Limitation Rules
The FTA on 07 April 2025 issued a guide detailing on limitation of interest deduction in the Taxable income in the Corporate Tax return. The Guide covers various aspects on limitation of interest deductions including:
- Definition of interest, including payments economically equivalent to Interest
- Rules on general deductibility of interest
- Specific Interest Deduction Limitation Rule
- General Interest Deduction Limitation Rule including interaction of the General Interest Deduction Limitation Rule with certain special cases
- Exceptions to General Interest Deduction Limitation Rule.
This alert summarises each of the above areas and captures key aspects that the businesses will have to bear in mind while considering interest deduction.