OPEX vs CAPEX: Spend Smart, Borrow Smarter

techadmin

Jul 16, 2025 — 1 min read

Cloud software, store fit-outs, new laptops—what counts as operating expense (OPEX) and what is capital expenditure (CAPEX)? Classifying spend correctly affects taxes, depreciation, and financing choices.

Simple UAE Tests

Time Test
Benefit lasts > 12 months? → likely CAPEX.
Tax Test
Depreciable asset under UAE corporate tax? → CAPEX.
Cash-Flow Test
Funding tenor should match asset life: short line for OPEX, long term loan or lease for CAPEX.

Typical Misclassifications

Item	Common Mistake	Correct Class
Annual SaaS licence paid up-front	Treated as CAPEX	OPEX (benefit < 1 yr)
Store refurbishment	Split into rent	CAPEX (depreciable fit-out)

Financing Tip

Bundle multiple small CAPEX items into a single term loan to avoid juggling ten tiny instalments.

Keywords: OPEX vs CAPEX UAE, expense classification, term loan, working-capital line, depreciation rules
Hashtags: #KlubAI #OpexVsCapex #FinanceTips #SMEAccounting #UAEBusiness

Disclaimer: For tax treatment, consult your accountant; blog figures are illustrative.

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Build a 90-Day Emergency Liquidity Kit—Before You Actually Need It

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Repayment Shapes 101—Choose a Curve Your Cash Can Afford

Exit-Ready Hygiene: Clean Up Debt Before Investors Start Digging