Non-Deductible Expenses UAE Corporate Tax 2026 Guide

Non-deductible expenditure examples:

• Government fines, late filing and compliance penalties
• Personal expenses paid by the company
• Dividends and profit distributions
• Inflated management fees or above market salaries (i.e. result of excessive or not following the arm’s length principles)
• Charitable donations or sponsorships framed as donations

In contrast, the businesses can generally deduct expenses incurred wholly and exclusively for business purposes when calculating UAE Corporate Tax.

Common deductible costs include employee salaries and benefits, office rent and utilities, software and IT services, marketing, professional fees, business travel, insurance, and depreciation or amortization of business assets.

Understanding which expenses qualify—and how they affect taxable income—can help businesses calculate their Corporate Tax liability accurately and avoid overlooking legitimate deductions.