Unlike operating expenses (OpEx) which are deducted in full in the year they occur, CapEx is capitalised on the balance sheet and depreciated over the asset's useful life. For UAE corporate tax purposes, depreciation of CapEx is a deductible expense — but only if the business applies a consistent, approved depreciation method. A common example: a DMCC company buys AED 300,000 of IT equipment. That cannot be expensed in year one; it must be spread over the asset's useful life, typically three to five years.
See also: Depreciation, Balance Sheet, Corporate Tax (CT)
