The UAE has amended its Corporate Tax Law to provide clearer rules on calculating and settling corporate tax when tax incentives and credits are applied. The move aims to streamline compliance and give businesses more certainty in managing their tax obligations.
The Federal Decree-Law modifies provisions of Federal Decree-Law No. 47 of 2022, introducing a structured mechanism for settling corporate tax liabilities. Taxable persons will now settle dues sequentially, starting with withholding tax credits, followed by foreign tax credits, and then other incentives or reliefs as determined by the Cabinet. Any remaining corporate tax must be paid in line with existing provisions.
The amendment also allows businesses to claim payments for unutilised tax credits, subject to conditions, timeframes, and procedures set by the Cabinet. The Federal Tax Authority is authorised to withhold amounts from corporate tax or top-up tax revenues to settle approved claims.
Officials said the changes enhance transparency and ensure companies can fully benefit from applicable tax reliefs while maintaining compliance with UAE tax regulations. The decree reinforces the government’s commitment to providing a clear and predictable tax framework that supports economic growth and investment.
The updated provisions are expected to take effect immediately, giving businesses and tax authorities a defined process for managing corporate tax liabilities where incentives apply.
News Source: Emirates News Agency
