UAE Corporate Tax on Goodwill and Intangible Assets 2026: Amortisation, Impairment and Acquisition Accounting Rules

You bought a business and paid more than its assets are worth on paper. Or you built software, registered a trademark, or paid for a licence that lasts five years. In each case your accounts now show an asset you cannot touch, and the Corporate Tax question follows straight away: can you deduct it, when, and how much?

This guide is written for UAE business owners, buyers of businesses and finance teams. It follows Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and the Federal Tax Authority (FTA) Accounting Standards and Interaction with Corporate Tax guide. Every article number below was checked against the published law text and the FTA guide. Where the law is silent and the answer depends on the accounting standard you use, we say so.

Published: 23 October 2026

Quick Answer

UAE Corporate Tax does not publish a separate table of amortisation rates for goodwill or intangible assets. Taxable Income starts from your accounting income under Article 20 of Federal Decree-Law No. 47 of 2022, so the amortisation and impairment charges in your financial statements generally flow into the tax calculation. The purchase price of an intangible asset is capital in nature and is not deducted at once under Article 28(1), but the related amortisation is deductible. Under full IFRS, goodwill is not amortised, so there is usually no yearly deduction, only an impairment charge when the accounts recognise one. Related-party deals are capped at market value, and transfers under Article 26 or Article 27 relief move assets at net book value.

How Tax Follows the Accounts (Article 20)

Article 20(1) requires Taxable Income to be worked out for each Taxable Person separately, from adequate standalone financial statements prepared under accounting standards accepted in the UAE. Article 20(2) says Taxable Income is the Accounting Income for the period, adjusted for items such as unrealised gains and losses, exempt income, reliefs, deductions, related-party transactions and tax losses.

Two consequences matter for intangible assets:

1. There is no separate tax amortisation schedule. The charge in your accounts is the starting point. If your accounting policy is to amortise a software licence over five years, that is the pattern the tax return starts from.
2. Standalone means standalone. Tax is calculated on each company’s own statements, not on the consolidated group accounts. This is the key to understanding goodwill, as the section below explains.

For the wider picture of how accounting standards feed the return, see our guide to UAE Corporate Tax and accounting standards.

What Counts as an Intangible Asset

The FTA guide does not create its own definition. It defines an Intangible Asset as an intangible asset as defined in the accounting standards the Taxable Person applies. In practice that includes:

• Software, whether bought or developed internally and capitalised
• Licences and permits with a finite life
• Trademarks, patents and brand names
• Customer lists and contractual customer relationships acquired in a purchase
• Franchise rights and distribution rights
• Goodwill

Whether a particular cost is capitalised as an intangible asset or expensed is an accounting decision made under the standard you apply. The tax result follows that decision, subject to the limits explained below.

Tax Treatment at a Glance

Item	Accounting treatment (typical)	Corporate Tax result
Purchased software or licence with a finite life	Capitalised, amortised over useful life	Purchase cost is capital in nature (Article 28(1)); the amortisation charge is deductible
Trademark or patent bought from a third party	Capitalised, amortised over useful life	Same: capital cost not deducted at once, amortisation deductible
Internally generated intangible, development stage	Capitalised only if the standard’s criteria are met	Follows the accounts: amortisation deductible once capitalised
Research and similar costs	Expensed when incurred under IFRS	Deductible as expenditure if it meets Article 28
Goodwill (full IFRS)	Not amortised, tested for impairment	No yearly deduction; impairment follows the accounts and the realisation election
Goodwill (IFRS for SMEs)	Amortised over its useful life	Amortisation charge follows the accounts
Intangible acquired from a related party above market value	Recorded at price paid	No deduction for the excess over market value

Purchased Intangible Assets: Capital Cost, Deductible Amortisation

Article 28(1) allows a deduction for expenditure incurred wholly and exclusively for the purposes of the Taxable Person’s Business that is not capital in nature. The FTA guide explains that, for Corporate Tax, expenditure that is capital in nature is the expenditure treated as capital under the accounting standards the person applies.

So when you pay for a licence or a trademark and your accounts capitalise it, the price is not deducted in the year of payment. The guide then makes the second half of the rule clear: although a deduction is not available for the capital expenditure itself, the associated depreciation, amortisation or similar changes are deductible. Anything capitalised and never deducted is also taken into account when the asset is sold or otherwise realised, so the cost is not lost.

There is one anti-abuse limit in the guide. If a capitalised cost would not have been deductible had it been an ordinary expense, writing it off through amortisation does not make it deductible. The guide gives the example of non-deductible related-party interest that is capitalised to gain a tax advantage. The same logic applies to any capitalised cost: amortisation cannot do what the original expense could not.

For tangible assets and the position on investment property, see our guide to UAE Corporate Tax depreciation rules. For what counts as a deductible expense in the first place, read UAE Corporate Tax deductible expenses.

Internally Generated Intangibles

Most UAE businesses do not buy their intangibles; they build them. A company develops its own booking platform, a clinic builds a patient app, a trading firm creates a brand. The tax treatment depends on the accounting treatment.

Under IFRS (IAS 38), research costs are expensed as incurred, and development costs are capitalised only when strict criteria are met, such as technical feasibility, intention and ability to complete the asset, and reliable measurement of the cost. Internally generated brands, customer lists and goodwill are not recognised as assets at all.

The Corporate Tax effect follows:

• Costs expensed in the accounts are treated as ordinary expenditure and must still pass Article 28 and not fall within Article 33 (non-deductible expenditure).
• Costs capitalised as development assets are amortised in the accounts, and that amortisation is the deduction.
• Internally generated goodwill is never on the balance sheet, so it never produces an amortisation or impairment charge.

Keep the development file: the feasibility assessment, project cost records, time sheets and the date the capitalisation criteria were met. If the FTA asks why a cost was capitalised rather than expensed, that file is your answer. If you also claim research relief, see our guide to the UAE Corporate Tax R&D incentive.

Goodwill: Why the Answer Is Usually “Impairment Only”

Goodwill arises when a buyer pays more for a business than the fair value of the identifiable net assets acquired. The accounting standard you apply decides what happens next:

• Full IFRS: goodwill is not amortised. It is tested for impairment at least once a year (IAS 36). If the carrying amount exceeds the recoverable amount, an impairment loss is recorded.
• IFRS for SMEs: goodwill is amortised over its useful life, with a fallback period where the life cannot be reliably estimated. Check the current text of the standard for the exact period.

Because Corporate Tax follows the accounts, the same split carries into the tax return. A company under full IFRS has no yearly goodwill deduction. A company under IFRS for SMEs has an amortisation charge in its accounts that starts the tax calculation.

Impairment and the realisation election

The FTA guide describes impairment as a reduction of an asset’s carrying amount to its recoverable amount when the carrying amount is higher. In the normal case, that charge is part of Accounting Income and flows into Taxable Income.

Article 20(3) offers an alternative. A Taxable Person that prepares accrual-basis financial statements may elect to take gains and losses into account on a realisation basis, either for all assets and liabilities subject to fair value or impairment accounting, or for all assets and liabilities held on capital account. Article 20(4) confirms that assets held on capital account include intangible assets. With the election, a paper loss from impairment is not brought into tax until the asset is realised, for example by sale. The election has consequences for gains as well as losses, so model both directions before you make it, and read the chapter on the realisation basis in the FTA guide.

Where goodwill appears and where it does not

Goodwill appears in the standalone accounts of the company that buys a business or an operating part of a business, in other words an asset deal. In a share deal, the buying company records an investment in shares at cost in its own standalone statements. The goodwill sits only in the consolidated accounts of the group. Because Article 20(1) works from standalone statements, a share purchase does not create a goodwill balance in the buyer’s tax calculation.

Participation income and gains are covered by the exempt income rules in Articles 22 and 23. Expenditure incurred in deriving exempt income is not deductible under Article 28(2)(b), which is another reason a share deal and an asset deal produce different tax results.

Acquisition Accounting: Asset Deal or Share Deal

When you buy a business, three questions decide the Corporate Tax outcome.

1. Are you buying assets or shares? An asset deal puts the acquired intangible assets and any goodwill into the buyer’s standalone accounts. A share deal does not. Compare the two before signing, because the amortisation profile, the exit gain and the relief position all differ.

2. How is the price allocated? In an asset deal, the purchase price is split between identifiable assets, such as customer contracts, a brand and software, and goodwill. Assets with finite lives are amortised, so more allocation to them usually brings earlier deductions than allocation to goodwill. The allocation must be supported by a valuation, not chosen for the tax result.

3. Are the parties related? If the buyer and seller are Related Parties, the transfer must meet the arm’s length principle (Article 34). The FTA guide explains that where the buyer pays more than Market Value, the seller does not recognise the excess as a taxable gain, and the buyer cannot claim depreciation, amortisation or other changes in value that relate to the untaxed excess. The deduction stops at Market Value. If the buyer pays less than Market Value, the guide requires the difference to be brought into the seller’s income.

For related-party rules in detail, see our guide to connected persons under UAE Corporate Tax. If the business you buy comes with staff, Yalah Dubai explains how to check a UAE job offer and contract with MOHRE.

Group and Restructuring Relief

Two reliefs change how intangibles and goodwill move inside a group.

Qualifying Group relief (Article 26)

Article 26 allows assets to move between members of a Qualifying Group at net book value, so that neither a gain nor a loss arises. Both companies must be resident juridical persons (or non-residents with a Permanent Establishment), linked by at least 75% direct or indirect ownership, with the same financial year end and the same accounting standards, and neither may be an Exempt Person or a Qualifying Free Zone Person. The relief is lost if, within two years of the transfer, the asset is moved outside the group or the companies stop being members of the same group, and the transfer is then treated as having taken place at Market Value. Read our full guide to qualifying group relief under Article 26.

Business Restructuring Relief (Article 27)

Article 27 applies when a Taxable Person transfers its entire Business, or an independent part of it, to another Taxable Person in exchange for shares or ownership interests. Assets and liabilities, including intangibles, move at net book value. The transfer must have valid commercial or other non-fiscal reasons that reflect economic reality, and the same two-year rule applies: if shares are sold outside the group or the business is transferred again within two years, the transfer is treated as made at Market Value. See UAE Corporate Tax business restructuring relief for the full conditions.

What this means for intangibles

• The intangible asset keeps its net book value on transfer, so no gain is taxed at the time of the move.
• The FTA guide notes that amounts which arose before the most recent acquisition, where one of these reliefs did not apply, are not brought into Taxable Income on later realisation. The relief position of the previous transfer therefore matters when you later sell.
• Intragroup transfers of brands and software are a common step in group reorganisations. Document the commercial reason and diarise the two-year date.

If a transaction is arranged mainly to obtain a tax advantage, the general anti-abuse rule can apply. See our guide to the general anti-abuse rule under Article 50.

Selling Goodwill or Intangibles: The Transitional Election

A gain on selling an intangible asset is part of Taxable Income. For assets you already owned before the business’s first Tax Period, the FTA guide describes a transitional election under Ministerial Decision No. 120 of 2023. A Taxable Person may elect to exclude part of the gain on disposal of Qualifying Intangible Assets, and the guide gives goodwill, trademarks and patents as examples.

Key points from the guide:

• An asset is a Qualifying Intangible Asset only if it was owned before the first Tax Period, is measured in the financial statements on a historical cost basis, and is disposed of for a value exceeding its net book value.
• The election applies to all Qualifying Intangible Assets. It is not an asset-by-asset choice, and it is deemed irrevocable except in exceptional circumstances with FTA approval.
• The excluded gain is calculated by the time apportionment method only, based on the days the asset was owned before the first Tax Period. The guide caps the period at ten years except in exceptional circumstances with FTA approval.

If you own older trademarks, licences or goodwill and might sell them, review this election before you file your first return after the sale. Our guide to UAE Corporate Tax transitional rules sets out the wider transitional picture.

Records the FTA Expects

Article 56 of the Decree-Law requires a Taxable Person to keep records and documents for seven years following the end of the Tax Period to which they relate, enough to support the return and let the FTA ascertain Taxable Income. For goodwill and intangibles, keep:

1. The purchase agreement and the purchase price allocation, with the valuation report behind it
2. The accounting policy note stating the standard applied, useful lives and amortisation method
3. Impairment test workings: assumptions, discount rates and cash flow forecasts for each year goodwill is tested
4. Development files showing why a cost was capitalised
5. Evidence of market value for any related-party transfer
6. Group relief papers: ownership proof, board resolutions, the commercial rationale and the two-year diary date
7. The amortisation schedule that ties to the financial statements and the tax return

Our guide to UAE Corporate Tax record-keeping requirements explains the seven-year rule and what happens if records are missing. If your accounts are audited, see also audited financial statements for Corporate Tax.

Common Mistakes

1. Deducting the full price of a licence or trademark in the year of purchase. The price is capital in nature. The deduction is the amortisation.
2. Looking for a goodwill deduction under full IFRS. There is none each year; the accounting charge is impairment only.
3. Claiming amortisation on the excess paid to a related party. The deduction stops at Market Value.
4. Ignoring the share deal versus asset deal difference. Goodwill sits in the buyer’s standalone accounts only in an asset deal.
5. Capitalising costs that would not be deductible as expenses. Amortisation does not cure the original disallowance.
6. Moving a brand into a new group company, then selling shares within two years. That can reverse the relief and bring in the Market Value gain.
7. Making the realisation election without modelling the gains. It affects gains as well as losses and covers a whole class of assets.
8. No impairment file. Without the workings, neither the auditor nor the FTA can follow the charge.
9. Mismatch between the amortisation schedule and the return. Reconcile them every year.

Frequently Asked Questions

Is goodwill amortisation tax deductible in the UAE?

Corporate Tax follows your accounts. Under full IFRS, goodwill is not amortised, so there is no yearly amortisation deduction. If you apply IFRS for SMEs, which requires goodwill to be amortised, the amortisation charge in the accounts starts the tax calculation.

Is an impairment loss on goodwill deductible?

In the normal case, an impairment loss recorded in the accounts is part of Accounting Income and flows into Taxable Income. If you have made the realisation election under Article 20(3), the loss is brought into tax when the asset is realised. Check the conditions in the FTA guide before relying on either result.

Can I deduct the cost of buying software or a licence?

The purchase price is capital in nature under Article 28(1) if your accounts capitalise it, so it is not deducted at once. The amortisation charged over its useful life is deductible.

Does Corporate Tax set fixed amortisation rates for intangibles?

No. There is no separate statutory schedule of intangible amortisation rates. The pattern in your financial statements is the starting point. The only fixed percentage mentioned in our depreciation guide relates to investment property held at fair value.

What happens to goodwill when I buy shares in a company?

In your standalone accounts you record an investment in shares at cost. The goodwill appears only in the consolidated accounts of the group, and Corporate Tax is worked out on standalone statements under Article 20(1).

Are internally generated brands or goodwill deductible?

They are not recognised as assets under IFRS, so there is no amortisation. Costs spent building them are treated as ordinary expenditure and must meet the Article 28 test.

What if I buy an intangible asset from a related party at a high price?

The transaction must meet the arm’s length principle. According to the FTA guide, the buyer cannot claim amortisation or other changes in value on the part of the price that exceeds Market Value.

Does business restructuring relief change how goodwill is taxed?

Relief under Article 27 moves assets and liabilities at net book value, so no gain or loss arises on the transfer. It does not create a goodwill deduction. The relief is withdrawn if the shares or the business are transferred outside the Qualifying Group within two years.

Can I exclude part of the gain on selling old goodwill or a trademark?

If you owned the asset before your first Tax Period and meet the conditions of Ministerial Decision No. 120 of 2023, you may elect to exclude part of the gain, calculated by time apportionment. The election covers all Qualifying Intangible Assets and is deemed irrevocable except in exceptional circumstances.

How long must I keep records on goodwill and intangibles?

Seven years following the end of the Tax Period to which the records relate, under Article 56 of the Decree-Law.

Related Reading

• UAE Job Offer Verification 2026 (Yalah Dubai)
• UAE Corporate Tax depreciation rules 2026
• UAE Corporate Tax deductible expenses 2026
• Business restructuring relief
• Qualifying group relief, Article 26
• Corporate Tax and accounting standards
• Connected persons and related parties
• Record-keeping requirements
• Trademark registration in the UAE and Corporate Tax

Need Help With Goodwill or Intangibles in Your Tax Return?

If you are buying a business, moving brands inside a group, or reviewing how amortisation and impairment feed your Corporate Tax return, message Qaspro Global on WhatsApp: https://wa.me/971551539679.

Sources: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Articles 20, 22, 23, 26, 27, 28, 33, 34 and 56), Ministry of Finance; Federal Tax Authority Corporate Tax Guide on Accounting Standards and Interaction with Corporate Tax (CTGACS1), including its references to Ministerial Decision No. 134 of 2023 and Ministerial Decision No. 120 of 2023, at tax.gov.ae. Accounting-standard points (IAS 36, IAS 38, IFRS for SMEs) describe the standards generally and should be checked against the current text. This article is general information, not tax advice for your specific facts.