The UAE government announces amendments to some provisions of the tax law

In an official statement, the UAE government announced amendments to certain provisions of Federal Decree-Law No. (47) of 2022, which pertains to corporate and business taxes.

The new decree includes comprehensive amendments to the mechanism for calculating and paying corporate tax due in cases of related tax incentives. The decree clarifies that the tax must be paid in the order specified; that is, using the withholding tax credit due to the taxpayer, as defined in Article (46) of the law.

The decree also introduces a new article stipulating that a taxpayer may claim payment of any unused tax credits arising from the incentives or related facilities stipulated in the aforementioned decree-law, in accordance with the regulations, timeframes, and procedures issued by a Cabinet decision based on a proposal from the Minister.

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

That is, using the withholding tax credit due to the taxpayer, as specified in Article (46) of the Law. If there is any remaining balance of corporate tax due after this, the available foreign tax credit for the taxpayer, as specified in Article (47) of the Law, is used.

If there is any remaining balance of corporate tax due after this, any other credits or forms of incentives or facilities, as determined by a decision issued by the Council of Ministers upon the Minister's proposal, are used.

If there is any remaining balance of corporate tax due after using the applicable credits and incentives, it is paid in accordance with Article (48) of the Law.

The Decree clarifies the mechanism for calculating and paying the corporate tax due when using the relevant incentive and facility credits. It also grants the taxpayer the right to claim payment of any unused tax credit from the incentives or facilities, subject to specific regulations, timeframes, and procedures.