The UAE Government Issues a Federal Law Decree Amending Certain Provisions of the Corporate Tax Law
The Government of the United Arab Emirates has issued a Federal Law Decree that includes new amendments to certain provisions of the Corporate Tax Law, aimed at clarifying how to calculate and pay the due tax. This decree highlights the options available to taxpayers, including tax incentives and facilities, which contribute to enhancing transparency and facilitating tax operations.
Details of the New Amendments
The Federal Law Decree No. (47) of 2022 includes amendments that clarify the mechanism for calculating and paying the due corporate tax, particularly in cases where tax incentives are available. The decree specifies the order of tax payment, stating that the process should begin using the withheld tax credit, in accordance with Article (46) of the law.
If there is an additional amount of tax remaining after this step, the available foreign tax credit will be utilized, as outlined in Article (47). Should there still be an outstanding amount, any other credits from incentives or facilities specified by a decision from the Cabinet based on the minister’s proposal will be used.
Right to Claim Refunds
The decree also adds a new article granting the taxpayer the right to request the withdrawal of unused amounts from tax credits resulting from incentives and facilities. This is done according to the standards and procedures approved by the Cabinet based on the minister’s proposal, providing companies with flexibility in managing their tax obligations.
Seizure Procedures
The amendments also allow the Federal Tax Authority to seize certain amounts from corporate tax revenues and supplementary revenues as needed, which contributes to securing the collection of the required amounts more efficiently. This step is part of the government’s efforts to enhance compliance with tax laws and simplify procedures.
The issuance of this decree reflects the UAE Government’s commitment to enhancing the tax environment and supporting businesses by providing clear mechanisms to help them understand and comply with existing tax obligations. These amendments are an important step toward achieving a balance between revenue collection and supporting the private sector.