The UAE amends corporate tax law provisions

Taxpayers granted the right to claim unused tax balances

The UAE amends corporate tax law provisions

The UAE government issued a Federal Decree-Law amending Federal Decree-Law No. (47) of 2022 concerning corporate and business tax. The amendment aims to clarify the mechanism for calculating and paying corporate tax due when there are outstanding balances, incentives, or related tax facilities. 

It also grants taxpayers the right to claim unused tax balances in accordance with the issued regulations and procedures.

The new decree includes an amendment outlining the mechanism for calculating and paying corporate tax due when there are related tax incentives. It clarifies that the tax must be paid in the order of priority, i.e., using the tax withholding balance due to the taxpayer as specified in Article (46) of the law.

If any outstanding corporate tax remains, the taxpayer's available foreign tax credit, as defined in Article (47) of the Law, shall be used. If any remaining corporate tax remains, any other credits, incentives, or facilities determined by a Cabinet decision based on a proposal from the Minister shall be used. If any outstanding corporate tax remains after the use of applicable credits and incentives, it shall be paid in accordance with Article (48) of the Law.

The Decree introduced a new article allowing taxpayers to claim payment of any unused tax credits resulting from related incentives or facilities. This shall be done in accordance with the regulations and procedures issued by a Cabinet decision based on a proposal from the Minister.

The new article also allows the Federal Tax Authority to withhold amounts from corporate tax and supplementary tax revenues, as appropriate, to settle the claimed amounts. This shall be done based on a decision by the Authority's Board of Directors.