Can Tax Losses from previous years reduce future taxes?
Yes, but there are rules. A business can use some of its past Tax Losses to lower its taxes in future years, but only up to 75% of its income in those future years. Any leftover losses can be used in the years after that.
For example, if a business made AED 100,000 but had AED 125,000 in past losses, it could use AED 75,000 of those losses to lower its income to AED 25,000. The remaining losses would be AED 50,000.
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