The UAE government has issued a new Federal Decree-Law amending key provisions of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, providing clearer mechanisms for calculating and settling corporate tax obligations.
Under the amendment, corporate tax liabilities will be settled in a defined sequence: first using withholding tax credits (Article 46), followed by foreign tax credits (Article 47), and then other approved incentives or reliefs, before any remaining tax is paid under Article 48.
A notable feature of the changes is the introduction of a provision allowing businesses to claim refunds for unutilised tax credits arising from approved incentives or reliefs. The process will be governed by specific conditions, timeframes, and administrative procedures outlined in a forthcoming Cabinet decision.
The reform aims to give companies greater flexibility in managing their tax positions and enables them to monetise unused portions of tax benefits, enhancing overall tax efficiency for businesses operating in the UAE.