The UAE government issues a federal decree law amending some provisions of the Corporate and Business Tax Law

The UAE government issued a federal decree law amending some provisions of Federal Decree Law No. (47) of 2022 regarding corporate and business tax (Corporate and Business Tax Law), with the aim of clarifying the mechanism for calculating and paying corporate tax due when there are balances or other forms of relevant tax incentives and facilities, in addition to giving the taxable person the right to demand payment of the unused tax balance in accordance with the controls, periods and procedures issued in this regard.

The new decree included an amendment that included a statement of the mechanism for calculating and paying the corporate tax due in the event of relevant tax incentives, as the new decree clarifies that the tax must be paid according to the order; That is, by using the balance of the tax deducted at the source of the taxable person and determined in accordance with Article (46) of the law. In the event that there is a remaining amount of corporate tax due after that, the foreign tax balance available to the taxable person and determined in accordance with Article (47) of the law is used. In the event that there is a remaining amount of corporate tax due after that, any balances or other forms of incentives or facilities are used that are determined by a decision issued by the Council of Ministers based on the proposal of the Minister. In the event that there is a remaining amount of corporate tax payable after using Applicable balances and incentives shall be paid in accordance with Article (48) of the law.

The decree also introduced a new article that included a provision that allows the taxable person to demand payment of the unused amount of tax balances that may arise from the relevant incentives or facilities stipulated in the aforementioned decree-law, in accordance with the controls, periods and procedures issued by a decision of the Council of Ministers based on the Minister’s proposal.

The new article also allows the Federal Tax Authority to withhold amounts from corporate tax revenues and supplementary tax revenues, as necessary, for the purposes of paying the claimed amounts, based on a decision from the Authority’s Board of Directors.