UAE Government Issues Federal Decree-Law Amending Corporate Taxation Regulations

The UAE government has revised the Federal Decree-Law No. 47 of 2022 concerning Corporate Tax Law. These changes aim to clarify how corporate tax is calculated and settled, especially when tax credits or incentives are involved. The updated law allows businesses to claim payments for unused tax credits, following specific conditions and procedures.

The amendments specify a sequence for settling tax liabilities. Initially, the withholding tax credit balance is used, as outlined in Article (46). If any corporate tax remains, the foreign tax credit under Article (47) is applied next. Should there still be a liability, other incentives or reliefs approved by the Cabinet will be utilised.

A new article in the decree permits businesses to claim payments for unutilised tax credits from applicable incentives or reliefs. This is subject to conditions and procedures set by a Cabinet decision on the Minister's recommendation. This ensures businesses can benefit from available credits efficiently.

The decree empowers the Federal Tax Authority to withhold amounts from corporate tax revenues, including any top-up taxes. This is done to settle approved claims based on decisions made by the Authority’s Board of Directors. Such measures ensure that claims are processed smoothly and fairly.

The revised law provides a structured approach to managing corporate tax liabilities using available credits and incentives. By detailing these processes, it aims to streamline how businesses handle their tax obligations while maximising benefits from existing incentives.

These changes reflect a commitment to enhancing clarity in corporate taxation processes. Businesses can now better navigate their tax responsibilities with clear guidelines on utilising credits and claiming payments for unused ones.

With inputs from WAM