Tax losses can, subject to certain conditions, be offset against the taxable income of future periods, up to a maximum of 75% of the taxable income in each of those future periods. Any excess (unused) tax losses can be carried forward and used against taxable income of future Tax Periods indefinitely.  

Example

A taxpayer has taxable income of AED 100,000 and carried forward losses of AED 125,000. It can offset (75% x AED 100,000) = AED 75,000 of its losses carried forward in the relevant Tax Period, reducing its taxable income to AED 25,000.   

The amount of tax losses available for carry forward to subsequent Tax periods would reduce to AED 50,000 (AED 125,000 - AED 75,000).